I was just thinking to myself how anti-democracy bad economics in the conservative style looks at real neoclassical welfare economics and manages to get the conclusions not just wrong but completely backwards. It’s a rather remarkable rhetorical accomplishment. Let’s discuss.
Neoclassical welfare economics demonstrates one cannot identify optimal economic arrangement or outcomes, nor discuss the efficiency of means to attain optimal outcomes, without taking up normative issues including importantly interpersonal ethics. One can say under false factual premises like perfect information and perfect rationality some near-enough approximation to a theoretical “perfectly competitive” market has some desirable features, but one cannot compare it to any other arrangement giving different distributional results. Nor is that only true of other “perfectly competitive” market outcomes; it’s also true of non-“perfectly competitive” market outcomes. Any change in distributional effects, who gets what, renders it impossible to compare to other results in neoclassical welfare economics. Similarly, one can’t discuss “efficiency” without specifying an objective, which requires exogenous normative inputs, as so-called “economic” or “Pareto” efficiency, which addresses doing the best one can under certain false factual premises without taking up interpersonal ethics. (The technical definition involves getting people as far up their preference rankings as possible without others moving down their preference rankings, so a status-quo preserving assessment based only on individuals’ own preference ranks and not interpersonal ethics, but it’s not important here.)
Bad economics in the conservative style takes that result and flips it on its head, arguing to achieve optimal economic results, one must eschew the interpersonal ethics that complicate the assessment of (ostensibly near-enough approximations to theoretical) perfectly competitive markets. One rhetorical approach in bad economics is to play games with normative and positive and cite theoretical ciphers in economic models having no preferences across interpersonal ethics to say no one, in fact, has interpersonal ethics. (See the so-called “methodological individualism” critique.) Another rhetorical technique used in bad economics is fake indifference, which surreptitiously introduces the exogenous normative input maintaining status quo arrangements is desirable or preferable, whatever they are, to argue neutrality is maintained by supporting status quo market outcomes. This then leads to the argument that because interpersonal ethics are exogenous to neoclassical welfare economics, economists qua economists should be neutral and advocate for any market deemed close enough approximations to the perfectly competitive model, always in reality a particular instance. The argument is false. Economists qua economists should transmit the results of neoclassical welfare economics and be indifferent to maintaining any given instance of a near-enough approximation of a perfectly competitive market or moving to any other outcome with different distributional results. Real neoclassical welfare economics does not say one should strive toward, maintain, not interfere with, not distort, any given instance of a market result, nor does it say anything about the extent of the market. All that sort of talk in indicative of bad economics in the conservative style. Real neoclassical welfare economics does not say greed is good, egoism leads to optimal results, no one should have interpersonal ethics, no one does have interpersonal ethics, interpersonal ethics are empty virtue signaling, etc. All that sort of talk is bad economics in the conservative style.
Bad economics in the conservative style supports anti-democracy fascism because rather then seeing voters providing normative inputs via democratic government as a necessary input to achieving optimal economic arrangements, it sees preventing voter input, blocking democracy, as essential. When you think about the normative theory or ethical argument of neoclassical welfare economics, think about the real theory, not the false backward one from anti-democracy bad economics in the conservative style. Think about the one that pairs with democracy, not the one that pairs with fascism.
