Thursday, May 19, 2011

Positive versus normative

The Economix blog at the NY Times carried a post on May 10 by Edward Glaeser, an economics professor at Harvard. Glaeser discusses the positive/normative distinction in economics, which he views as valuable. He never comes out and says that positive economics is value-free, which is a thoroughly discredited position, after all. But he does say that positive economics "attempts to understand the world as it is; normative economics describes how the world should be."

But then he gives away the game by pointing to the normative assumptions at the basis of his so-called positive analysis: a high value placed on individual freedom as opposed to human community, a dim view of the democratic political process, a bias in favor of formal mathematical models, and heavy reliance on statistical evidence. Change these assumptions and you get an alternative approach to positive economic analysis that often produces much more interesting insights, and very different policy conclusions.

Glaeser seems to think his assumptions are obviously true, and should be accepted by everyone. In fact, they are the product of a particular worldview that is not universally accepted, nor should it be. I for one believe in the importance of community, democracy, informal or heuristic reasoning, and the validity of all kinds of evidence in social science, including both statistics and historical narrative. And yes, I therefore hold different normative positions from Prof. Glaeser on a lot of issues.

1 comment:

Steven McMullen said...

While you are right that the idea that "positive economics is value free" has been "thoroughly discredited," it is one of those world-view things that still defines the way the discipline views itself.

Glaeser, however, recognizes the degree to which standard theory embeds ethical claims. See his post on "the moral heart of economics"

For Glaeser though, the disciplinary emphasis on individual freedom is a perk, which he lauds in this earlier post. This is one place where Christians can very easily improve on standard economics: we have a vision of what humanity is (and should be) that is richer than a simple utilitarian emphasis on liberty.