The central conceit of bad economics in the conservative style is to ignore the role of economic power and thus also the ethics of economic power, exogenous to neoclassical welfare economics, to conclude market results ethically optimal. Let’s discuss.
In markets, interpersonal conflicts of preferences as over the use of scarce resources are resolved using economic power, plus some desire, of course. Desire with no economic power does not call forth resources, and economic power will call forth resources with only a modicum of desire. That’s why theoretical results from real neoclassical welfare economics are predicated on excluding “equity” concerns, that is, concerns about the fairness, justice, ethical quality of the distribution of economic power or more generally the resolving of interpersonal conflicts of preferences. As indeed there are always disagreements relating to interpersonal ethics, the resolving of interpersonal conflicts of preferences, the distribution of economic power, the use of markets, evaluation of market results will always devolve upon the controversial interpersonal ethical involved.
Bad economics in the conservative style uses various rhetorical stratagems to suppress or ignore the role of economic power and the ethics involved to underhandedly support exogenous normative propositions relating to use of markets, distributions of economic power, allocation of resources. I often discuss the more arch and thus interesting to me rhetorical maneuvers one finds in high level bad economics in the conservative style, as fake indifference, roadblocks, positive analysis of normative theory, “methodological individualism,” actors and roles, etc. However, one needn’t do all that to see the phenomenon in question. Sometimes I hear remarkable quick takes from bad economists.
One conservative economist told me economic power and thus budget constraints are irrelevant to consumption decisions, which is why poor people can buy good coffee. Yes, according to that fellow, where resources ended up going in markets was purely a matter of where people wanted them to go, as their consumptions decisions were not contained in any way by their economic power or budget constraints. Poor people simply didn’t want anything. Another conservative economist told me economic power is theoretically relevant but as a near enough approximation we can assume everyone has the same economic power, so it drops out of the equation, illustrating a very typical yet unfortunate mixing of positive and normative methods in economics. As a matter of fact, we do not all have the same economic power. Indeed, the US is famous for its unusually unequal distribution of economic power with many poor people and a small tail of vastly rich people. And course, it’s economic power, not bodies, that matters to markets. Of course, hypothetically, if everyone did have equal economic power, I suppose consumption decisions would more directly relate to differences in desire, but if one wants to understand the role of interpersonal ethics in real economics, try suggesting to someone we just equalize economic power. That’s because strength of desire as illustrated for example in preference ranks looms large in neoclassical welfare economics as it’s the only ethical issue allowed, but in reality, its significance pales in relation to interpersonal ethics concerns like equity, fairness, justice, welfare, etc.
My point here is just to clue people in to the overall objective addressed by the large body of dodgy rhetoric in bad economics in the conservative style: resolving interpersonal conflicts of preferences one way, not another; allocating scarce resources to one objective, not another. Of course, given everyone has views on interpersonal ethics, it’s perfectly fine for one to propose ethics supporting one’s preferred resolution of interpersonal conflicts of preferences, distribution of economic power, use of markets, allocation of scarce resources, economic objectives, equity. That’s not what I mean by “bad economics,” although if one heard the explicit ethical arguments one might well disagree with them and consider them bad leading to “bad economics” of another sort. I suppose that’s one of those level issue that lurk behind so much confusion and conflict. (I call as a “level issue” any situation in which the same concept or term is applied at different points in an argument, as the “bad” in “bad economics” may refer to either inept philosophy with missing elements or proper philosophy with implausible ethical inputs or false factual premises.) No, I call it “bad economics in the conservative style” because it does what is known as a bait and switch, with the less controversial ethical half-theory of neoclassical welfare economics serving as bait, which is then switched out for a much more controversial ethical full-theory on the sly.
