Jung Park

Political insider trading has brought substantial attention to ethical considerations in the academic literature. While the Stop Trading on Congressional Knowledge (STOCK) Act prohibits members of Congress and their staff from leveraging non-public information to make investment decisions, political insider trading still prevails. We discuss political ethics and social contract theory to re-engage the debate on whether political insider trading is _unethical_ and raises the issues of conflict of interest and social distrust. Empirically, using a novel measure of information risk, we find that senator trades are associated with substantially high levels of information asymmetry. Moreover, based on inside political information, senators earn significant market-adjusted returns (4.9% over 3 months). Thus, our results do not support the prediction made by social contract theory and thereby provide a potential resolution to the ongoing debate on banning stock trading for members of Congress.

One of the most conspicuous recent phenomena in the domain of moral and political philosophy has been the revival of social contract theory. From John Rawls to David Gauthier, contractarians have attempted to construct their methodological foundations on the theory of rational choice. The inspiration for the theory of rational choice has been the neo-classical conception of rational economic man. This theory seems to provide contractarian ethics with a concrete model for reducing the principles of social choice for justice to the principles of rational individual choice. ;This study identifies the four methodological foundations of contractarian ethics . These foundations are the justification for contractarian consensus, non-altruistic clear choice motivation, the possibility of contractarian consensus in the circumstances of pluralism or relativism of individual autonomous values, and a neutral Archimedean criterion for assessing the justness of a society. ;However, this study shows that the theory is no guarantee of the validity of these four foundations in view of four corresponding predicaments. The predicaments are the dilemma of moral irrelevancy or circularity held between rationality and morality, indeterminacy between various rational choice models, incompetent assessment of the contents of individual values as well as insufficient political sensibility of prevalent conflicts of individual values, and non-neutrality resulting from the futility or the flight from liberal historical cultures. ;In effect, contractarian ethics is exactly contractarian liberal ethics. Overall the present impasse of contractarian liberal ethics is derived from the methodological aspect of rational foundationalism and from the substantial aspect of individual liberalism. This study also reveals that the four predicaments have a deeper root in Western modernity itself. However, various historical and contemporary alternatives to contractarian liberal ethics appear to have no capacity to overcome the deeply rooted predicaments. If this is the case, as an important agenda for the future of the moral and political philosophy, the question "After Contractarian Liberal Ethics: End or Transformation?" must be taken seriously.

Over twenty years after the publication of A Theory of Justice (1971), Rawls avowed that it was an error in Theory to describe a theory of justice as part of the theory of rational choice. This paper elucidates the reasons why Rawls had to make such an avowal of the error in connection with his contractarian rational deduction project of morality, i.e., rational contractarianism. Two major issues are involved here. They are about the construction of the original position and the maximin derivation of the two principles of justice. Because of the moral irrelevancy of rationality in Hobbes’ model, Rawls tries to construct a fair original position. Hence Rawls’ rational contractarianism turns out rationality cum fairness model. However, this model of Rawls’ commits the circularity of moral assumptionsprior to rationality, which might be rationally arbitrary. Furthermore, because of its highly conservative psychological attitude of risk-aversion, Rawls cannot show the superior rationality in the maximin strategic derivation of the two principles of justice over the other strategies. These are the reasons why Rawls had to admit the error. After the avowal of the error, Rawls shifted to Kantian conception of free and equal moral persons for the justificatory device of his theory of justice. Several polemical issues around the Kantian conception are discussed and adjudicated.