I had a fun conversation the other day with another economist interested in addressing the normative content of neoclassical welfare economics, and we had a little disagreement relating to ideology and ethics. It occurred to me this is probably yet another source of confusion that complicates addressing bad economics, so maybe I can discuss that today.
Ideology is typically raised in the context of the philosophy of science to explain how normative values can affect positive theories evaluated on empirical, objective criteria. The basic idea is that one’s ideology can encourage one to generate new theories consistent with it and spur one to neglect theories inconsistent with it, affect one’s choice of what issues to study, recommend attractive and ostensibly promising theoretical approaches, etc. There is little question value judgments and normative or ethical propositions operating through ideology can affect the development of any sort of positive science, including positive economics. However, there is a natural limit to the role of ideology in positive science in the sense that scientific theories are meant, eventually, to be objectively evaluated by their ability to predict observable phenomena. It’s not just about what feels good or right to the scientist. If a scientist, perhaps operating with a different ideology, generates a theory that is more successful at predicting or explaining empirical phenomena, then that theory will eventually be accepted as the stronger theory. Well, that’s what one expects will happen in any healthy field of science anyway. In that sense, scientific theories are positive theories, not normative theories, despite the motivating influence of normative ideology. Scientific theories are ultimately about fact, reality, observable phenomenon. On their own, positive scientific theories can never tell anyone what he or she ought to do. One has to add normative or ethical content to do that. When it comes to intellectual artifacts like theories and propositions, the positive versus normative split is about whether the theory or proposition is question proposes to talk about what is or what ought to be, about empirical fact or about what people ought to do. It’s not really about the presence or absence of normative factors that may or may not impinge on the development or rate of acceptance of that theory or proposition.
When it comes to normative neoclassical welfare economics, a theory that purports to tell people what economic systems and arrangements and outcomes are socially optimal, which people should prefer, the role of normative value is more direct and obvious than the operation of normative values via ideology in positive economics. Normative neoclassical welfare economics is basically a form of ethical or moral philosophy. It takes normative or ethical inputs, including famously the ethical proposition we should try to maximize total social “utility” as defined in neoclassical economics, combines them with factual premises about the world (often misidentified in the context of normative neoclassical welfare economics as simplifying assumptions, which is a concept appropriate to positive economics but not normative economics), to arrive at obviously normative conclusions. Talking about the role of values and normative or ethical propositions in neoclassical welfare economics does not require the concept of ideology and, indeed, bringing up ideology tends to confuse the issue. If a philosopher presents a rights based ethical theory it seems a little nonsensical to talk about the potential role of “rights based ideology” on the person creating the theory or on the development of the theory. I mean, he or she is saying that value is involved. That’s what the theory is about. One can just discuss it directly at that point.
Confusingly discussing ideology when one has in mind the ethical or normative content of normative neoclassical welfare economics is a reflection of the confused mix of science and ethics, fact and value, positive and normative, one finds in neoclassical economics in general. It causes one to pause and ask whether one is talking about normative or positive economics. It confuses the issue, even more so when one jumps back and forth between discussing the role of ideology in positive economics and the value or normative or ethical inputs of normative economics. We should really simplify the situation. We should fix bad economics by taking out the normative content and making it a true science, with ideology the only route by which values would then affect the theory. Explicit normative or ethical judgments relating to evaluating market systems and outcomes belong with the people and should be expressed through democratic government.
