I’m all about addressing bad economics but sometimes when addressing bad economics I can’t help but notice certain connections to bad philosophy. Maybe I can say a few words about that this week in relation to two ideas from bad philosophy: the idea that normative or ethical propositions are nonsense from logical positivism, and the idea there is no useful distinction between positive and normative propositions from bad philosophy of science.
I’ve mentioned before one very typical expression of bad economics is to propose neoclassical welfare economics contains or expresses the absurdly controversial ethical or normative proposition distributional ethics don’t matter for the evaluation of economic systems and outcomes rather than the uncontroversial ethical or normative proposition they do matter, but will not be taken up in neoclassical welfare economics because they are controversial. It’s a way to misuse neoclassical welfare economics to defend certain real world instances of economic systems or outcomes without trotting out the fake distributional indifference I’ve discussed in many previous posts. I’m just throwing out ideas here, but I suspect one thing some purveyors of bad economics may have in the back of their minds or may at least rely upon for rhetorical effect when they take this approach is the old idea from the now defunct philosophical theory of logical positivism that normative or ethical propositions of the sort associated with distributional ethics are grammatical “nonsense” because they aren’t science, aren’t falsifiable. My impression is that many economists in particular may be attracted to this sort of thing because of their often desperate desire to establish the supposed scientific credentials of economics. And has anyone in the world of philosophy ever been more myopically preoccupied with empirical science than the old logical positivists?
Of course, it’s bad philosophy. People have known that for many decades now. People sensibly discuss normative or ethical propositions all the time, even though it is not science. The whole logical positivist idea that value, normative, ethical propositions are grammatical “nonsense” is really simply a failure to understand what ethics is all about. Coming from that perspective, one would never be able to recognize or understand bad economics, which is bad above all else because of the sloppy, unrigorous, misleading, confusing normative or ethical theorizing involved.
The old logical positivist perspective is also inconsistent with what I call the ethical half-theory structure of neoclassical welfare economics in which some ethical issues relevant to evaluating economic systems and outcomes are in and some are out. Normative neoclassical welfare economics is an ethical half-theory, not a purely positive, scientific, ethical non-theory. It purports to evaluate economic system and outcomes, albeit only partially, explain which systems and outcomes are socially optimal, provide policy advice, recommend what people ought to do. It includes explicit normative propositions relating to “utility” (individual preference rankings) when there is no interpersonal conflict, and may imply others, and generates (partial) normative conclusions. More to the point, the unique ethical-half theory structure of neoclassical welfare economics is not based on the idea the normative or value inputs that are in are scientific, positive, verifiable, falsifiable, or different in any fundamental way from those that are out, only that they less controversial. (Of course, as I’ve suggested in previous posts, much of the apparent uncontroversial quality of the endogenous normative inputs is derived from that the fact they are not presented clearly and are evaluated in conjunction with false factual premises, but we can go over that again some other day.) The 1950s have left the building, but if one really wants to be the last logical positivist, one should at least be consistent about it and treat any discussions of “optimal” economic systems or outcomes, any normative or evaluative discussion of economic issues, any policy advice, as grammatical “nonsense.”
A completely different connection between bad economics and bad philosophy draws on the notion from themes in the philosophy of science from the 1970s and 1980s that because normative concerns, biases, ideology can affect positive theory, and positive factual premises can show up in normative or ethical arguments, there is no useful distinction between fact and value, normative and positive, is and ought, science and ethical philosophy. Again, just throwing out ideas here, but my impression is many economists may be drawn to this sort of thing because of the complications associated with the peculiar mix of positive and normative one finds in neoclassical welfare economics, and the pervasive conflation of the methods appropriate to each. If there’s no real difference anyway, well then, problem solved. Easy peasy.
Again, we’re talking about bad philosophy. The argument takes a useful and valuable point about the interaction of positive and normative statements and arguments and misstates and exaggerates its significance and relevance. Positive and normative statements remain fundamentally different from one another. Surely it would be quite difficult to understand why neoclassical welfare economics exhibits distributional indifference if one doesn’t understand the distinction between positive and normative propositions. Why not just solve the controversial normative issues? Do a bit of math or run an experiment? Or maybe one supposes that’s what neoclassical welfare economics already has done? That it has demonstrated using math, logic, and science alone that we should adopt some economic system or prefer some economic outcome regardless of the distributional issues involved? One hears that sort of thing all the time; it’s called bad economics. Or taking a step back, one imagines one who cannot appreciate the difference between positive and normative propositions and thus cannot see the point of distributional indifference in neoclassical welfare economics may be quite amenable to what I’ve been calling fake distributional indifference. Just informally fix up the funny, inexplicable bits of neoclassical welfare economics in practice. Improve it. Make it a bit more sensible. The 1970s have left the building, but if one wants to join American conservatives in the fantasy Land of Alternative Facts, in which the only criterion for what is true is what one wants to be true, where there is no distinction between value and fact, positive and normative, science and ethics, is and ought, then go for it. You don’t need neoclassical welfare economics to do that, just make something up.
Addressing the dodgy normative content of bad economics becomes that much more difficult when combined with bad philosophy. Ethics, values, normative ideas, beliefs, propositions are important. They are fundamentally different from positive, empirical, factual, scientific propositions on the one hand and from positive, logical propositions on the other hand, yet one can think and talk about them sensibly nonetheless, and one should if one wants to avoid the confusion and conflict of bad economics.
