Week III: Can Economics Be Objective?

Distinction between positive and normative statements

Positive and normative statements

• Positive statements are about how things are

• Normative are about how things ought to be

  • That is, value judgements about what is good or bad

  • Derive from philosophical, cultural, and social views

  • However, there is a difference between logical ought and ethical ought

    • Logical ought refers to the consequences of certain actions: “you ought to work hard if you want to pass the exam“

    • Ethical ought refers to the desirability of certain actions: “you ought to work hard, because that is the morally right thing to do"

Normative and positive can sometimes be distinguished within the definition of word it the statement. Words such as “health“ can have various and circumstantial definition.

Economics and Ethical Judgements

• Economics became an autonomous discipline when it started to make itself autonomous from ethics

  • Describe economic action as it is, rather than as it should be

    • More like what a natural scientist would do, rather than what a jurist or moral philosopher would prescribe

  • Not unlike what Machiavelli had done with politics

Economics and Ethical Judgements

• Emergence of nation stated: need to advice the prince

  • recognise that what the prince ought to do is not just in moral terms (or not even that, for Machiavelli), but that it needs to take into account natural laws governing the material function of the polity

Positive statements are usually synthetic a posteriori

Normative statements are usually synthetic a prior

• They are only a matter of internal consistency

Usual Problems with testing

• what we use to test a theory is not always independent of the theory, and can itself be a product of the theory

• when applying deductive thinking, if something is not confirmed is it the law that is wrong, or are the initial conditions not met

Positve v Normative statements

• positive statements can be rooted in normative ideas

Positive vs Normative

• Notice also that positive statements often constitute the basis for making a normative claim

  • e.g. “international trade should always be free“

  • this presupposes “international trade promotes productive specialization, which increases production, which in turn increases economic well-being“

  • each of these statements is a positive one

Point 3

Can economics always keep positive and normative statements distinct

Research involves choices, which are (often unknowingly) influenced by value judgements

e.g. towards which problems should we allocate our time; how to interpret conclusions: what aspects are emphasized when communicating resources