Should Economists Deceive? Prosocial Lying, Paternalism, and the ‘Ben Bernanke Problem’

Abstract

A widely held principle in professional ethics, across the professions, is the duty to speak truthfully when engaging in professional activity. Expert truth-telling has come to be recognized as vital to the Kantian respect that is due to clients and others who must act based on professional advice; and to the imperative to sustain trust. It is therefore notable that economics does not generally require truth telling among its members. Against truth telling, in cases where what an economist says can impact social welfare, the profession tends toward “prosocial lying”—lying that is thought to be in society’s best interests. The case of central banker statements is paradigmatic. Would economists have preferred that Ben Bernanke tell the truth about the threats to the US and world economy in the early days of the crisis of 2008, when doing so might have destabilized financial markets further? But prosocial lying comes at a cost to the profession, and to society. Not least, prosocial lying reflects a paternalistic ethos that has by now been challenged in other professions; and the prevalence of prosocial lying may undermine trust—both among economists, and between economists and those economists purport to serve.