Karl Homann’s Contractarian Approach to Ethics

Abstract

This paper gives an account of Homann’s moral legacy from an economic point of view, both positive and normative. While the economic approach to ethics makes broad use of new institutional economics, it failed in formulating a closed and self-contained moral theory. Moreover, Economic Ethics disregards important strands of the economic literature, such as the theory of market failure and the insights of mechanism design theory. Besides the neglect of a substantiated normative approach to ethics, the use of an oversimplified model of economic interactions leaves this approach theoretically underdeveloped and unsuitable for the assessment of real-world phenomena.