I was part of a fun little exchange the other day about whether “economics” is a “neutral” discipline, as opposed to “political economy,” which was presented as not. Maybe I'll take a look at that this week.
Defining “economics” is famously tricky because the discipline involves disparate components. Some components, such as mathematical or engineering optimization techniques, may fairly be considered neutral tools applicable to a variety of different problems. Other components, such as the scientific or empirically predictive component, are often meant to be neutral, cast as neutral, but there is quite often some question about the role of neutral scientific evaluation based on empirical success versus other potential criteria. These other criteria, theoretical tractability, “understanding,” etc., can introduce non-neutral, normative evaluative elements to even ostensibly positive economics. For example, “understanding” often seems to equate roughly to intuitively appealing storytelling.
When one considers explicitly normative economics, such as neoclassical welfare economics, a traditional component of “economics,” the idea of “neutrality” becomes even more confusing and questionable. As with any ethical theory, the logic of the argument presented may be considered “neutral,” but the theory itself would not normally be considered “neutral.” It’s of interest to those who accept certain normative propositions and reject others; it expresses an ethical viewpoint. This is what I often refer to as “positive normative” economics, the conceit that economists aren’t presenting neoclassical welfare economics as a normative theory anyone should care about, they’re just analyzing the logic of the argument, in case anyone is interested. They then turn out around and give their policy evaluations, recommendations, based on that normative theory, but still, ostensibly just in case anyone is interested, which they’re not claiming anyone should be. Why do they talk in that funny, insincere way? Because while they appear to like and agree with the resulting policy recommendations, they don’t want to or can’t do proper ethical philosophy, evaluate their normative theory, or even analyze it or describe it well enough for others to do so. In their view, it’s not their job.
Neoclassical welfare economics is not “neutral” as far as normative content, it expresses a certain normative viewpoint and is of interest to those who agree that viewpoint. So is neoclassical welfare economics not really “economics” but “political economy?” Ironically, the ethical issues associated with political decisions about the definition, distribution, use of economic power are purposefully, explicitly excluded from neoclassical welfare economics, which is what makes it an ethical half-theory in relation to reality. Indeed, that’s typically the context for people who advocate the study of “political economy,” a desire to include those otherwise excluded issues, albeit usually introduced in the context of improving positive rather than normative economics. Of course, those are the issues lurking in the background of anti-democracy bad economics in the conservative style, where people try to apply neoclassical welfare economics in realistic setting without taking proper note of the exogenous positive and normative issues. Thus, anti-democracy bad economics in the conservative style may well be considered a sort of political economy, if an opaque, misleading sort, which some propose may be countered by a more real, conscientious, explicit sort of political economy. But as I often point out, anti-democracy bad economics in the conservative style, although perhaps a sort of opaque, bad “political economy,” is not really part of “economics” as much as a clumsy misinterpretation of one part of it, used for purposes of political rhetoric.
So, is “economics,” as distinct from “political economy,” a “neutral” discipline? Seems rather misleading to say so, in part because neoclassical welfare economics is conventionally part of “economics,” while anti-democracy bad economics in the conservative style isn’t really.
