Economics and the Common Good

Jean Tirole teaches at the University of Toulouse, and was the winner of the 2014 Nobel Prize in Economics. In this wide-ranging and accessible book, he reaffirms the centrality of the common good as the basis for economics, which in Cambridge 100 years ago was studied as one of the moral sciences; by contrast, in the Scottish universities the subject was called political economy. The idea of the common good provides a check on the supremacy of the market economy according to neoliberal ideology. It also defines the role of the state in relation to the market, suggesting that the role of economics is to make the world better place. The author begins with an interesting thought experiment about the kind of social system one might like to live in if one did not know one's prospective social condition - from behind a veil of ignorance. The book is in five parts with 17 chapters, beginning with economics and society, which includes moral limits of the market. Then a discussion of the economist's profession in terms of the relationship to civil society, theoretical approaches - especially information theory - and analysis of motivation with respect to rationality.

The third part considers institutional frameworks for the economy, the role of the state, governance and social responsibility. The author then moves on to consider major macro economic challenges such as climate, the labour market (with a special emphasis on French issues, currently the focus of strike action), Europe and finance, especially since 2008. Then there is the industrial challenge, and in particular the implications of digitisation. In each case the analysis is hugely well-informed, with constructive policy proposals for moving forward. Significantly, he also addresses issues of trust, which are looming large in the Facebook debacle. Given human nature, new technology offers both opportunities and threats, which necessarily brings one back to the moral qualities embodied in individuals and institutions and their dedication or otherwise to the common good.