Ready for a rather more serious topic in normative economics? How about the difference between rejecting a full ethical theory and rejecting a particular application of an ethical half-theory? I've seen lots of rhetorical nonsense in that area over the years. Let’s discuss.
Ever hear an argument of the following form? “Economic theory says do X in particular realistic context Y, but of course one needn’t agree the normative argument in economic theory. If one rejects it, one may ignore that advice.” The argument is misleading rhetoric; bait and switch.
When one is dealing with a full ethical theory meant to apply to the real world, and one rejects the conclusions when the theory is applied in realistic contexts, then one may suppose one must disagree with some element of that full ethical theory. One may disagree a normative proposition or suppose one missing, or one may disagree a factual premise, that is, a positive proposition used in that theory; or indeed one may disagree some point of logic. But one clearly can’t agree the entirety of a full ethical theory yet reject the conclusions.
However, the normative argument in economics, at least in standard neoclassical welfare economics, is not a full ethical theory. It’s a very self-consciously defined ethical half-theory that excludes important and relevant interpersonal ethics, so-called equity issues. These ethical issues include the factors governing the resolution of interpersonal conflicts of preferences, so the definition of economic power (as property rights), the distribution of economic power (as markets, unions, inheritance, taxes), and even the use of economic power in markets. Those types of issues are not taken up in neoclassical welfare economics, as seen in the restriction of “utility” and “welfare” to questions about the preference ranks of individuals, which cannot support resolving interpersonal conflicts of preferences as needs, wants, desires, etc. There’s nothing clever or special about this observation and any competent economist will gladly tell you equity issues are a perfectly acceptable reason within economic theory to ignore any conclusions of that theory in any realistic context involving laws relating to those equity issues. In addition, the normative argument in neoclassical welfare economics contains false factual premises, the awkward shadow of false but simplifying assumptions in positive economics, that make the normative argument not directly applicable in realistic contexts. Corrections must be made. These issues, exogenous ethical issues relating to the resolution of interpersonal conflicts of preferences (equity issues) and the presence of false factual premises, means rejecting the conclusions of economic theory in realistic context Y does not imply rejecting that theory. That is to say, there is no contradiction in agreeing the normative propositions in neoclassical welfare economics in the unreal context specified, but disagreeing the conclusions of simplistically applying that theory under real conditions while ignoring the presence of exogenous ethical issues. No? One more time and we’ll move on. One may understand and agree everything in neoclassical welfare economics but oppose in realistic contexts the policy prescriptions of those operating under bad economics in the conservatives style, such as market utopianism. There is no contradiction.
Now let’s discuss why I propose this false argument may be viewed as a very typical conservative rhetorical move designed to mislead or manipulate people into taking a certain position on false pretenses, that is to say, explain how it functions as a very typical conservative grift. The normative content of neoclassical welfare economics considered in the abstract theoretical context in which it is meant to be considered, one that sets aside important issues of interpersonal ethics, and uses false factual premises to simplify complex cases, is not particularly controversial. Thus, if that content is presented as the only thing required to agree the application of normative neoclassical welfare economics in realistic contexts, then it may appear one is rejecting some pretty uncontroversial normative propositions if one rejects it. But that’s a bait and switch. In realistic contexts, one is taking up the limited content of arbitrarily restricted and factually false neoclassical welfare economics, correcting for the false factual premises, plus acknowledging a role for the missing interpersonal ethics, surely the lion’s share of ethical thinking. If one confines oneself to only the normative content in that ethical half-theory, then one can say nothing about reality, or if only that after correcting for false factual premises, then one must be indifferent to any policy changing the resolution of interpersonal conflicts of preferences.
When it comes to anti-democracy bad economics in the conservative style and its academic enthusiasts, keep in mind always they’re playing a rhetorical game with many elements designed to defend conservative, right wing values in clever ways. It’s not real neoclassical welfare economics. Neoclassical welfare economics, and those who came up with it, are not blameless, of course. Full of clever word play and philosophical maneuvering, it seems rather obvious the intent was never an academic parlor game but an intellectual framework to support bad economics in the conservative style. But intent is one thing, literal content another. Neoclassical welfare economics says what it says. It checks. But it might not say what one supposes it says, particularly if one sees it through the lens of its monstrous twin: anti-democracy bad economics in the conservative style.
