Studies at the Intersection of Philosophy and Economics

 

Rationality, Markets, and Morals: RMM Band 0 (2009)

The assignment of rights to as low political levels as possible recommends itself because preferences of citizens are better known at the communal, provincial or state level, because their influence is greater, political powers are more distributed and since decentralization furthers efficiency and innovation in a system. Thus subsidiarity requires that only the necessary framework and those decisions related to cases with strong externalities or to public goods covering the whole society are taken at the highest level. Looking from this perspective at the Lisbon Treaty proposed for the European Community several important shortcomings are found which are mainly related to the fields of overlapping competencies of the Union and the member states. It is shown that the principle of subsidiarity, which has to be safeguarded by introducing adequate institutions, would be much better served by the proposals of the European Constitutional Group.
The paper consists of two parts. The first part deals with the normative legitimacy of political communities, such as states and confederations, in general, i.e. their acceptability in light of reasonable standards of efficiency, common good, and justice from the viewpoints of their members on the one hand (internal legitimacy) and their social surroundings on the other (external legitimacy). The requirements of both aspects of legitimacy are specified in a twofold way: as normative ideals and as minimum standards. As to the latter, a political community’s legitimacy minimally requires that it effectively guarantees the fundamental human rights of its members and complies with certain basic precepts of a peaceful and generally beneficial international order. On this basis, the second part scrutinizes the legitimacy of the European Union with regard to its internal and external aspects. This attempt leads to a mixed result. Even though the EU can certainly be regarded, by and large, as a desirable project, it also suffers from a number of considerable defects that weaken its legitimacy.
The paper addresses the issue of how the notion of common or public weal can be specified for a democratic polity as a ,,cooperative venture for mutual advantage“ (Rawls). It is argued that common weal in democratic politics is to be understood as its capacity to produce mutual advantages for the citizenry and that the measuring rod for this capacity is citizen sovereignty, i.e. the responsiveness of democratic politics to citizens‘ common interests. Subsidiarity is analyzed as an organizational principle in politics that can serve as an instrument for advancing citizen sovereignty.
In the course of the history of democratic voting rights a remarkable development has taken place: collective privileges to vote were completely replaced by a personalisation of voting rights. Today, it is perceived as self-evident that every adult citizen has the right to vote. But neither the classical forms of democracy acknowledged such a right nor is it promoted by the conditions of modern mass society. Therefore, its emergence and dissemination is a historic ,miracle‘ and an achievement that is based on the fundamental political concept of a ,person‘. This concept has to be protected at all tim – and today afresh – against the ever-present dangers of erosion and neglect.
Criticism of contract theory has always played an important role in Hartmut Kliemt’s writings on political philosophy. Notwithstanding his objections to a consent-based justification of the state he has never subscribed to an anarchist position. In Hartmut Kliemt’s view, a minimal state which protects the basic liberties of its citizens has to be considered legitimate. The article begins with a brief restatement of the most influential objections that have been raised against the various forms of contract theory. Thereafter interestbased accounts of political legitimacy are critically examined; it is argued that individual interests fail to provide a justification for any kind of political authority. Finally, philosophical anarchism is suggested as a possible alternative to contract theory and interest theory. Although philosophical anarchism holds that no state has a moral right to rule, it can be reconciled with the view that it is in the individual’s interest to create and maintain a minimal state.
Justice is intrinsically distributive; it distributes by its rules. Distributive‘ or social‘ justice redistributes by overruling them. It has theories that do not start from here‘. It has no rules; it makes claims instead. Both its names are fraudulent aliases, social‘ perhaps less blatantly so. Satisfaction of a claim in `social‘ justice depends on politics and tends to favour the poorer half of society. This commands general sympathy, but sympathy does not make it any less unjust.
In order to analyze what can plausibly be said about the relationship between dignity, human rights, and democracy, I will propose a basic assumption about human dignity (I) and then formulate five theses concerning the justification of democracy (II) which will allow me to conclude (III) that only when human rights are constitutionally established and effectively implemented democracy can be theoretically and practically justified as a political means to guarantee human dignity.
Human decision making is a process guided by different and partly competing motivations that can each dominate behavior and lead to different effects depending on strength and circumstances. `Over-stylizing‘ neglects such competing concerns and context-dependence, although it facilitates the emergence of elaborate general theories. We illustrate by examples from social dilemma experiments and inequality aversion theories that sweeping empirical claims should be avoided.
We consider a theoretical model of co-evolution of networks and strategies whose components are exclusively supported by experimental observations. We can show that a particular kind of sophisticated behavior (anticipatory better reply) will result in stable population states which are most frequently visited in co-evolution experiments.
We survey research on incurring commitments by voluntary hostage posting as a mechanism of cooperation. The Trust Game is employed as a paradigmatic example of cooperation problems. We sketch a very simple game-theoretic model that shows how voluntary hostage posting can bind the trustee and thus induce trustfulness of the trustor as well as trustworthiness of the trustee. We then indicate how the model can be improved by including uncertainty and incomplete information, transaction costs of hostage posting and compensating effects as well as signaling effects of hostages. Further extensions of the theoretical analysis are outlined as well as testable hypotheses and references to empirical research. Problems for future research are suggested.

Journal Information

RMM is an interdisciplinary open access journal focusing on issues of rationality, market mechanisms, and the experimental method of reasoning into moral subjects. It provides a forum for dialogue between philosophy, economics, and related disciplines, encouraging critical reflection on the foundations and implications of economic processes.

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