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Why shouldn’t economics get so much stick?

Words by Daniel Lapedus

In response to Simon Wren Lewis on ‘Why does economics get so much stick?’


Economics affects people’s everyday lives. Like doctors, macroeconomists prescribe remedies for the unwell economy, like policy-makers and politicians, their decisions have an effect on the population. Macroeconomists therefore, while possibly small in their actual numbers, have a huge influence on the economy, and wider society.

 

Economics, the subject, is political and ethical. It does not exist in the vacuum in which it is theorised. Value judgments on economic arguments are made in the political sphere. This was symbolised in the recent UK general election, where a Post-Keynesian policy was labelled derogatively as “The Magic Money Tree”. This is an explicit value-judgement.

 

We must recognise that even if an economist argues (as Wren-Lewis does) that “the best way of trying to persuade a policymaker not to impose austerity is to say that most models…will reduce output”, they are themselves basing their analysis on assumptions that reflect their own values, for example, that the level of output is the most worthwhile thing to be discussed. This is a hidden-value judgement, as the valuing of output above other factors has been hidden from the argument.

 

To limit the scope of one’s argument to purely the ‘value-free’ effects of output obfuscates non-quantifiable values, such as fairness, from the debate, despite these being important values to society. To limit the scope shoots oneself in the foot. For economics is not a technical exercise divorced from ethical concerns, and an economic theory with hidden values is not value-free.

 

Yes, as Wren-Lewis mentions, Kenneth Arrow created fine arguments within the realms of ‘positive economics’, however we should not disregard the fine normative arguments made by the likes of Richard Titmuss and Peter Singer. To recognise the moral and political foundations of the subject may reduce the amount of stick the subject gets.

 

Wren-Lewis argues that “The danger in encouraging plurality is that you make it much easier for politicians to select the advice they like, because there is almost certain to be a school of thought that gives the ‘right’ answers from the politicians point of view.” The irony is that if one believes that economics is positive, and not normative, and therefore removes certain social, ethical and political values from analysis, far from being left with a value-free science, they are left solely with the values of ‘positive economics’; that output gains are particularly important, for example. This is not to say that output gains are not important, but merely to point out that a value judgement has been placed, in this example, that output gains are more worthy of consideration than fairness. This is why we must recognise the values of the ‘value-free science, so to speak, and recognise that economics is not positive, but normative.

 

To use Wren-Lewis’s example discrediting pluralist economics debate through the comparison of economics to medicine, where he says “Don’t like the idea of vaccination? Pick an expert from the anti-vaccination medical school.” This misses the point, the choice is not limited to that of vaccine and no vaccine, but between different types of vaccination. It is the job of doctors to know what type of remedy is appropriate to the problem at hand, as it should be the job of economists to know what policies are appropriate for the problem at hand. By reducing economics down to ‘positive economics’, the judgement has already been made as to what vaccine is necessary. Pluralist economics merely wants there to be more than one option on the table. For why would one use the same vaccination for all ailments?

 

 

 

 

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