Ingrid Robeyns — Economics as a moral science

For a while I have been working on a paper on democracy, expert knowledge, and economics as a moral science. [The financial crisis plays a role in the motivation of the paper, but the arguments I’m advancing turn out to be only contingently related to the crisis]. One thing I argue is that, given its direct and indirect influence on policy making and for reasons of democratic accountability, economics should become much more aware of the values it (implicitly or explicitly) endorses. Those values are embedded in some of the basis concepts used but also in some of the assumptions in the theory-building.

Crooked Timber
Economics as a moral science

Ingrid Robeyns

All this talk about whether economics is a science is a waste of time. There is no general criterion for deciding what counts as "a science." If natural science is taken as the model, then other so-called "sciences" don't measure up. If science is defined as application of the scientific method, then the category gets very broad, including items that many would reject as not constituting "a science." There are many disciplines that conduct scientific inquiry and attempt to handle data scientifically, but also include other factors.

So we have to ask what the hidden agenda is in arguing that economics is "a science." Pretty obviously, it is rhetoric to bolster the claims of those making the argument that their economic output is "scientific" in the sense of true, and so true as to be universally accepted. This is also at the foundation of the claim of conventional economics that economic methodology is a decided question and heterodox approaches are outside the normal paradigm, hence, "unscientific" and not to be bothered with.

Robeyns  observes Keynes claimed that economics is a "moral science." As a trained philosopher, my view is that "moral science" is an oxymoron. Science treats values like any type of observable. However, many would strenuously denied that virtue is merely behavior, an artifact of culture and institutions, or an "epiphenomenon" of neurological activity.

What we see is that there are many things happening in the world at once, and also in the minds of "scientists," just like others. As cognitive science is showing there is no definitive boundary between feeling and reason, value and fact, as has been presumed. Anthropologists and sociologists have also shown how humans structure what they take to be "reality" in terms of norms and priorities, that is, they structure data into information selective to amplify the signal and reduce the noise. 

Moreover, different peoples do this differently, even within single cultures. Cultures are comprised of subcultures, and this is evinced at the intellectual level as the clash of ideas various approaches to cultural institutions like religion. There are often, in fact usually, many sects within a single religion.

Some aspects of economic behavior lend themselves to scientific inquiry more readily than others, but generally speaking the law-like behavior that can be identified is small relative to the issues involved. There are no laws in economics similar to physics for the simple reason that humans are not atoms and human societies are complex adaptive systems rather than being ergodic. While patterns can often be identified, they are not universal and they are changeable through learning, for example.

I believe that Robeyns could improve her argument by distinguishing between efficiency and effectiveness. Summing up Peter F. Drucker in The Effective Executive, efficiency is doing things right and effectiveness is doing the right things. Notice that Drucker is saying through the title that management is chiefly about effectiveness and efficiency has to do with the means for achieving optimally with respect to the use of resources. Efficiency does not dictate to effectiveness. The relationship is reverse.

Managers set goals in accordance with institutional policy. Strategy and tactics follow from policy. The purpose of strategy and tactics is to achieve goals set by policy. Policy is a set of norms which is itself derived from value judgments.

It is customary to distinguish microeconomics from macroeconomics. Many economists hold that macro is scaled up micro since macro must be founded in micro. Others hold that this is to miss a fundamental difference when government is added and that difference is society. A firm sets its policy based on the interests of the owners of the firm. A government sets its policy based on public purpose, which includes a variety of factors that must be prioritized based on context, as shown, for instance, in the preamble to the US Constitution.

Therefore macroeconomics is a policy science to the degree it is a science, and to the degree it is not a science it is informed by the values of the society. The idea that the supposed economic efficiency of the "free market," as if there were such a thing in the first place, should set policy rather than public purpose as defined by the society is absurd. It's tantamount to saying that the goal is efficiency, which is a nonsense, efficiency being about means.

No for-profit firm sets its goal as efficiency. The purpose of a firm is to make a decent return for the owners by competing with other firms for customers' business. No not-for-profit institution sets its goal as efficiency either. They have a mission, which is their reason for being. They don't just leave things to the market to sort out either. They are pro-active. Similarly, governments serve public purpose pro-actively.

Since effectiveness in governing is more important than efficiency, and since effectiveness requires selection of goals, governing begins with values, upon which policy is then formulated with respect to opportunities and challenges and in terms of the resources available.

Policymakers ask macroeconomists first and foremost to inform them about what is possible to achieve and what is not possible, and then how to go about choosing and implementing the most suitable policies given the value structure and the goals it determines, and the resource likely to be available. Economists respond from their different perspectives and their estimation of the data. What emerges from good analysis is a set of tradeoffs. In a democracy, choosing among those tradeoffs is accomplished through the political process.

So there is an intertwining of both theoretical and empirical analysis and also values. Disagreement over values is expected in a pluralistic society, but one would expect that if economics is a science, economics would agree over theory and fact. But they do not. To claim that one brand of economics is "scientific" and others not is simply rhetoric.