Sunday, August 29, 2010

A mainstream economist admits the obvious [told you!]

It is rare to hear a prominent mainstream economist discuss so frankly (in public) the ways in which non trivial value judgments enter into welfare economics and public pronouncements of economists:
http://economix.blogs.nytimes.com/2010/08/27/when-value-judgments-masquerade-as-science/

I probably shouldn't say, "I told you so," but...I told you so:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1142741
[The published version will be available soon: http://www.amazon.com/Elgar-Companion-Chicago-School-Economics/dp/1840648740]

Moreover, elsewhere I tell the story how even at Chicago-Economics (where they were early and rather trenchant critics of the claims of value-neutrality of welfare economics), the new welfare economics was adopted: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1628102
For philosophers this paper may be entertaining (or a cautionary note) because I show how Kuhn's ideas were both anticipated and then aggressively promoted to create a mythic history (and, thus stiffle dissent) at 'Chicago'.

4 comments:

  1. What? Value judgements are involved in economics? I'm shocked. Shocked to hear this. Why, it's almost as though one of the major things underlying economics were theories of value . . .

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  2. While Reinhardt is mainstream indeed, he's pretty far toward the left of that mainstream; it doesn't surprise me to hear of him writing something like this. When I was at P-ton, he used to devote at least one lecture per year in his undergraduate intro courses to a long argument to the effect that any possible morally upright stance on foreign war ought to commit one to the draft. That lecture was pretty well-renowned around campus.

    To the above commenter: Bit of an equivocation on the term "value" there.

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  3. Well, acknowledging value-ladenness is certainly progress! Now when will they recognize that these are controversial values too?

    Thanks for this post, Eric!

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  4. As an instance of judgements value-laden in more than one way, here is Keynes' appraisal of why classical economics had done so well in times past: "The completeness of the Ricardian victory is something of a curiosity and a mystery. It must have been due to a complex of suitabilities in the doctrine to the environment into which it was projected. That it reached conclusions quite different from what the ordinary uninstructed person would expect, added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue. That it was adapted to carry a vast and consistent logical superstructure, gave it beauty. That it could explain much social injustice and apparent cruelty as an inevitable incident in the scheme of progress, and the attempt to change such things as likely on the whole to do more harm than good, commanded it to authority. That it afforded a measure of justification to the free activities of the individual capitalist, attracted to it the support of the dominant social force behind authority." (The General Theory of Employment, Interest and Money, chapter 3)

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