How about a bit more economics this week? I thought I might discuss two subtly different normative or ethical propositions I believe are often conflated in the context of applied economics to comical and unfortunate effect. Sound a plan? One proposition leads to viewing neoclassical welfare economics as an ethical half-theory, basing normative evaluation of policy partially on normative inputs from outside. The other leads to viewing that theory as a full ethical theory, evaluating policy on that basis alone.
The first proposition is from real neoclassical welfare economics and says economists speaking as economists using that theory should not take up the ethics of resolving interpersonal conflicts of preferences, should restrict their discussion to “utility.” Let’s discuss briefly. The factors that play into resolving interpersonal conflicts of preferences in economics involve the ethics of the definition, distribution, use of economic power in markets to address particular conflicts, or not. Those ethics are external to neoclassical welfare economics. The “utility” I just mentioned is not just any old definition of utility one likes, and the term has a long history in philosophy and many potential definitions. It’s the particular “utility” that meets the definition and requirements of neoclassical welfare economics. The only empirical indication associated with the relevant sort of “utility” in neoclassical welfare economics is individual preference rankings, and most economists now define it simply to be that with no further content, just the ranking itself. One may also define it as an internal subjective feeling of satisfaction from individual preference fulfillment, but only if one specifies the only empirical indication of that feeling is individual preference rank. That works, but leads to some rather dodgy ethics. I discuss the dodgy ethics that follow from that older and now uncommon take on “utility” in neoclassical welfare economics in my blog and book. The point here is simply one cannot make “interpersonal utility comparisons” in modern neoclassical welfare economics. There are other sorts of economic theory that get around that restriction, confusingly often by introducing factors relevant to other sorts of utility, then “weighting” individual preference rankings, pretending to add them together, compare them, and so on. Those other sorts of economic theory fall under the rubric of “general welfare analysis,” basically rather dodgy, awkward, confused ethical philosophy that doesn’t really express the same normative inputs or generate the same conclusions as real neoclassical welfare economics. Anti-democracy bad economics in the conservative style is a misinterpretation specifically of the normative argument in real neoclassical welfare economics, not the wide ranging, anything goes discussions of “general welfare analysis.” Those operating under the influence of this first proposition understand they cannot evaluate economic policy in realistic contexts purely from within neoclassical welfare economics. It requires ethical inputs relating to the ethics of economic power external to that theory.
Returning to the main point, the second proposition is from bad economics in the conservative style and says economists speaking as economists should tell others as well to not take up the ethics of resolving interpersonal conflicts of preferences, go beyond “utility.” In direct contrast to the first proposition from real neoclassical welfare economics, which is ostensibly intended to eschew ethical controversy by limiting the scope of economic theory, rendering it an ethical half-theory, this second proposition is very ethically controversial. It’s controversial because resolving interpersonal conflicts of preferences make up the lion’s share of ethics, so it’s basically a proposition people should be amoral in the sense of being indifferent to others and to considerations of fairness, justness, equity, and so on. Indeed, one supposes the only reason that proposition from the ostensibly full ethical theory of bad economics in the conservative style is taken seriously at all involves some sort of selective perceptive involving acceptance of status quo ethics on the relevant issues. A common rhetorical conceit from bad economics in the conservative style is to cast as indifference to the ethics of resolving interpersonal conflicts of preferences indifference to the ethical basis of the status quo resolution, not indifference to that resolution. That’s not true indifference in the sense relevant to neoclassical welfare economics because it introduces an additional normative or ethical principle, that one should support the status quo regardless of its ethical basis, which cannot be justified on the basis of “utility.” Under the influence of that rhetoric from bad economics in the conservative style, the second proposition transforms into something like, no one should question the ethical basis according to which interpersonal conflicts of preferences are resolved under the status quo. This then informs the common conservative view democracy is ethically bad because it allows voters to express unjustified, false ethics relating to resolving interpersonal conflicts of preferences, allocation of scarce resources, engage in empty and unethical “virtue signaling.” Those operating under the influence of this second proposition propose they can evaluate economic policy in realistic contexts purely from within neoclassical welfare economics and they oppose ethical inputs relating to the ethics of economic power external to that theory.
The two propositions are often conflated using the idea of economists just talking as economists, but that’s ambiguous between economists as such giving an ethical half-theory, correctly expressing indifference, and economists as such giving their own full ethical theory. Any full ethical theory may always be said to be just from the point of view of adherents. Duty based theories just the views of those who support those theories, religious theories just the views of who support those theories, and so on. It’s not the point.
Real neoclassical welfare economics has certain normative inputs, applied under certain factual premises, and generates certain conclusions. Bad economics in the conservative style has different normative inputs, applied under different conditions, gives different conclusions. Conservatives have had great fun playing bait and switch between the two intellectual artifacts, misleadingly taking up criticisms of bad economics in the conservative style by referring to real neoclassical welfare economics. Know enough economics to not fall for such nonsense.
