I thought this week I might re-introduce my primary topic: differentiating the restricted, abstract, normative or ethical theory of neoclassical welfare economics and the expansive but false, misleading misinterpretation I call “bad economics in the conservative style.” If one is aware at all of the changes in normative economics going from classical economics to neoclassical economics, one might readily understand the discussion as addressing an attempt to artfully conflate the two in the right wing rhetorical artifact bad economics in the conservative style. “Neoclassical” welfare economics was an attempt to defend the basic normative ideas and values of the embattled and increasingly discredited classical economics by playing terminological, rhetorical games apparently to facilitate misunderstandings, create confusion. As a theory, it says what it says. It’s not false or wrong, per se, although of little relevance to real world ethical issues. However, the larger issue is it appears to have been purpose built to support common misinterpretations of what it says and may be criticized on that account.
One significant element was re-defining “utility” to mean preference ranks of given individuals, thus rendering it nonsensical in interpersonal contexts and irrelevant to discussions of the ethics of resolving interpersonal conflicts of preferences, allocating resources. This deft maneuver set aside the lion’s share of ethics, involving resolving interpersonal conflicts of preferences, needs, desires, and so on, to transform neoclassical welfare economics into an ethical half-theory rather than a full ethical theory as was classical economics. This change in the proposed normative or ethical significance of the theory, as well as confusion associated with the notion of economists as a point of professional conduct representing only that ethical half-theory but proposing to give policy advice on that basis, creates much confusion. This led to a similarly idiosyncratic, restricted, potentially misleading definition of “welfare,” which no longer referenced many of the issues one might normally associate with the term, and in which a “welfare maximizing” outcome might leave many quite miserable indeed. Another notable element was defining “efficiency” to mean (usually) so-called “economic efficiency,” restricted to what one can say on the basis of the preference ranks of individuals, on “utility” defined in that way, using concepts derived from Italian fascist Mr. Pareto.
The end result is very typical types of misinterpretations relating to the assumed existence of ethical propositions relating to the definition, distributional, and use of economic power to resolve interpersonal conflicts of preferences, allocate resources, that are not in fact present. This leads to a sort of bait and switch in which the conclusions of old classical economics in terms of free market utopianism are expressed via a theory that does not actually support them, leading to confusion and conflict until one distinguishes the real theory from the misinterpretation of it. The two intellectual artifacts involved, real neoclassical welfare economics on one hand, and anti-democracy bad economics in the conservative style on the other, are distinct, but they’re most easily understood together in relation to one another, lest one cycle confusingly between them.
It’s important to address because anti-democracy bad economics in the conservative stye is a primary basis for anti-democracy sentiment in the USA, suppressing the role of democratic government in market systems, suggesting it can only do harm by “interfering with” or “distorting” market outcomes. Those operating under the influence of anti-democracy bad economics in the conservative style are prone to not understand the normative or ethical issues involved in economic systems, the role of voters, and to suppose democratic government must be weak, small, inactive, or eliminated.
The actual rhetoric of anti-democracy bad economics in the conservative style is not simple. It’s clever, subtle, arcane, difficult to work through. It involves a great deal of purposeful rhetorical trickery as terminological equivocation, conflation of issues. Simply ignoring it is ineffective. The people one might normally rely upon to address such intellectual errors, in this case academic economics and philosophers, are either not up to the task or choose instead to actively promote those errors for gold or possibly to promote outcomes they prefer using underhanded means. Everyday people, people involved in other intellectual disciplines, must endeavor to get involved, learn the bits of normative economics that are relevant and significant (and it’s a smaller universe than one might expect), even as economists and philosophers do what they can to stop one. Insincere academic economists will do whatever they can to prevent one learning real economics. They will use endless complications, obscure references, math, arcane terminology, scorn and derision, to defend the walls of their discipline from a great height. But it’s all there in black and white.
I’ll be reviewing various aspects of these issues in the future. I feel they’re important. Want to get involved? You may want to take a look at my book of short essays on elements of anti-democracy bad economics in the conservative style I wrote on a different site from 2020 to 2024.
