This post is the second in a series about ethics, theology, and critiques of economic methodology. Each post is a portion of an early draft of a paper that is forthcoming in the Journal of Interdisciplinary Studies. Here is a table of contents for the full series:

A PDF of an early draft of the full essay is available here.

Economists have often been criticized for a broad embrace of a positive-normative distinction. In economics texts, this is often presented as a dichotomy between the work of economists and the work of policy-makers. In this view, economists are concerned with economic “facts,” which can include empirical observations, the implications of economic theory, or predicted results of a proposed change. Policy-makers, on the other hand, must take into account “values,” when making decisions, which encompass any preferences one might have about the policies, religious commitments, political ideologies, and ethical norms. Economists imagine ourselves as neutral technicians, explaining the world as it is to policy-makers, who must prioritize costs & benefits and pursue some conception of justice.

This distinction has long been criticized by scholars, arguing that economic “facts” or, alternatively “positive descriptions” are never truly neutral (Husbands, 2012). Economic data, such as gross domestic product, are the result of hundreds of human judgments about what counts as economic value and what kinds of activities should be valued. Some of the cornerstones of economic theory, such as conceptions of efficiency and welfare, moreover, operate explicitly as normative criteria for evaluation of different states of the world, based on a quasi-utilitarian logic.

Economists rightly respond that the way we actually make use of the positive-normative distinction is less problematic than often assumed. It is widely acknowledged that the measurement of GDP, welfare economics, and decisions based on efficiency have a normative component. Part of being a good economist, however, is to approach economic problems in such a way that all of the relevant data are collected, predictions made, and modeling finished are finished before evaluating outcomes or making decisions (Menzies, 2010). Even if a strict separation of facts and values is impossible, economists still strive to keep the “evidence-gathering” part of their work conceptually separate from any advocacy of particular policies. This is analogous to similar methodological practices in other fields. For example, many theologians will approach a text with some hermeneutical rules or some background historical research,  which are themselves the subject of professional standards which procedurally come prior to the work of doing theological ethics (Brennan & Waterman, 2010).

Partly because of fierce political debates about economic and political questions, social scientists have worked to establish methodological standards that can be accepted across the political and theological landscape. This is an attempt to carve out a neutral sphere of methodological consensus. At stake in this project is the ability of economics to take advantage of the credibility that comes with having an “objective” or “scientific” approach to answering questions. Even if two economists ultimately disagree about the minimum wage they might still agree that the policy could have a particular kind of positive and negative effects (i.e. higher wages, higher unemployment). The economists may then dispute the magnitude of those effects based on empirical research, but even this debate can be separated from arguments about ethical priorities and conceptions of justice. Isolating these different areas of disagreement is clearly a useful exercise.

The success of economics as a discipline is, in fact, closely tied to our success in building consensus on empirical research methods and the modeling of markets. Ours is an age of radical disagreement about ethical norms and conceptions of justice. This state of affairs, sometimes called substantive pluralism (Mouw & Griffioen, 1993), makes the process of building political consensus difficult. To manage this pluralism, we often resort to a “thin” liberalism as advocated by theorists like John Rawls, which attempts to build a political, or procedural, consensus that is neutral with respect to different conceptions of the good (Johnson, 2010). Even if we disagree about the justice of a minimum wage, we might be able to agree, at least, about how to make policy decisions. Economists have embraced this vision of public engagement, and have become our chief technocrats. While many other fields offer unique insights into the same social phenomena, economists have excelled at working within a minimalist conception of progress that appeals to all but the most radical of critics.

The positive-normative distinction is embraced by economists as a central part of our status as a professional guild. We imagine that we are doing scientific work in which the cause-and-effect relationships can be established by economic experts in a manner that is separate from any broader narrative about human purpose or morality. Even ideologically fraught data, like measures of GDP growth, can be accepted as imperfect but still useful information that can contribute to economic analyses. The careful economist will use GDP as a good measure of the volume of commerce while keeping in mind the concerns about environmental valuation or home production that plague the data.

References

Brennan, G., & Waterman, A. (2010). Christian theology and economics: convergence and clashes. In S. Gregg & I. Harper (Eds.), Christian Theology and Market Economics (pp. 77–93). Cheltenham: Edward Elgar Publishing.

Husbands, M. (2012). A Reconsideration of “Fact” and “Value” and the Moral Space within which Theologians and Economists may share Common Objects of Love. Faith & Economics, 60, 24–31.

Johnson, K. D. (2010). Theology, Political Theory, and Pluralism: Beyond Tolerance and Difference. Cambridge: Cambridge University Press.

Menzies, G. (2010). Economics as identity. In S. Gregg & I. Harper (Eds.), Christian Theology and Market Economics (pp. 94–109). Cheltenham: Edward Elgar Publishing.

Mouw, R. J., & Griffioen, S. (1993). Pluralisms and Horizons: An Essay in Christian Public Philosophy. Grand Rapids, Mich: Eerdmans Pub Co.

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