The Science of Economics and the Art of Political Economy

by Peter Boettke

The various discussions about the moral responsibility of those who not only provide social criticism of public policy, but also advise and in many instances design public policy, has led to an interesting discussion on the HES discussion list on the history of economic thought on these matters. Of course, there and elsewhere there is also the question of the unwarranted intrusion of ideology into scientific matters.

This is a topic that I think is valuable to explore. I have in several essays carved out my position on this over the years. I had to, because my chosen field of interest was comparative political economy and thus I was dealing with the battle line between socialism and capitalism, etc. Those essays are available herehere and here. There are other efforts, but that is more than enough to glean my basic position — which is that political economy is a value-relevant discipline only to the extent that economic science is an approximately value-neutral discipline. It is because economics is capable of “objective knowledge”, the conversation in the ideologically charged field of comparative political economy can be a progressive one. If economics was incapable of being “scientific” in this sense, then political economy would devolve into a battle of mere politicized opinion. But if economics is capable of providing “objective knowledge”, then it can serve as a tool for social critique and put parameters on people’s utopias.

In this approach to the issues, economics per se is limited to means-ends analysis; treating ends as given. Economics is a tool for social criticism, not a tool for policy advocacy. To shift from social critic to policy designer, value judgements must come into play, and responsible policy dialogue should demand that those value judgements are introduced and openly debated. The problem with so much of 20th century public policy is that the dominant approach to economic policies treated policy design as if it was an objective technical discipline (a form of social engineering) and that the value judgements embedded in the advocacy efforts were taken for granted rather than stated explicitly and defended. See this important paper by Murray Rothbard on Value Judgements and Economic Analysis.

Here is a discussion by Robert Heilbroner on Schumpeter. Schumpeter distinguished between vision and analysis; where vision provides the pre-analytic raw material for the objective analysis that economic science provides. In short, even in the science of economics there is a positive role to be played by ideology and moral philosophic propositions. Without this pre-analytic cognitive act, the science of economics doesn’t have the raw material to work with in order to derive propositions about economy and society.

David Colander discusses the science and art of economics and political economy. And hereis the link to the first of a three part series by Israel Kirzner discussing the anatomy of economic advice.

When I think about the issues recently being discussed on the moral responsibility of economists in their capacity as policy advisors, these are the issues that think about and want to revisit. Ultimately, it turns on the very nature of economics as discipline to operate as a “scientific” enterprise and what role that discipline serves when economics is thought of as a public science.

Source:  Coordination Problem

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