Economics and Value Freedom

3824791020_dc042b8cf6_bMises and Rothbard taught that economics is a value-free science. Propositions of economics, such as the law of diminishing marginal utility, neither state nor imply any judgments about what is good or bad, right or wrong. Robert Grant, an Irish philosopher who teaches at Trinity College, Dublin, disagrees. In an article that appeared January 23 on the Irish news website thejournal.ie ,  Grant claimed that “the view of economics as value-free is, at best, illusory and, at worst, dangerous.” Economics is not value-free, according to him; and the myth that it is helps nefarious supporters of the free market occlude the truth that the free market helps the rich, not the poor.

Grant’s argument against value-freedom in economics is not very good. He points out that economists choose to investigate certain topics rather than others, Their choices reflect the values they hold. “The very decision about what aspect of the world to examine is an expression of what is important to us, ie, an expression of our values. . ., economists can choose to aim their analysis at the private financial markets and the banking system, or they could focus on public issues such as welfare economics, or how to make healthcare affordable. Each analysis may display incredible intellectual and mathematical sophistication, yet the choice is a normative one. It means that you deem some particular issue to be more worth your time and effort than the myriad of other issues you could investigate. Values are inescapable.”

Grant has fallen into an elementary confusion. Of course he is right that your choice to study something expresses your values. It hardly follows from this, though, the results of your investigation are, in whole or in part, value judgments. When it is claimed that economics is value-free, the claim is about the propositions of economics, not the reasons economists have for studying these propositions.

According to Grant, the false doctrine of value-freedom in economics has horrendous results: “We are told the ‘free’ market is an efficient processer of information, and that if left to its own devices, it will naturally produce efficient results that are better for everyone. But this is simply not the case. The market expresses the values of those who control it. It is no coincidence that our current market structure works better for some rather than others.”

Grant is again confused. Grant disagrees with those who contend the free market is better for everyone. But surely someone who says the free market is better for everyone would realize that he is expressing a value judgment. What then is the relevance of Grant’s claims about value-freedom to this disagreement? Grant has lost control of his own argument. Maybe he means that the free market economists use a notion of “efficient” which they wrongly take to be value-free. If this is what he means, Grant has failed to make his case. He doesn’t show that judging whether an economy is efficient involves value judgments.

In any event, Grant’s counter to the free market supporters misses the point. He wishes to argue against the assertion that the free market works better for everyone. To point out that the market works better for some than others is not a counterexample to the thesis he wishes to refute.

Photo Credit: Wandering Magpie

Comments

  1. Notice too Grant’s employment of equivocation (very par for the course):

    “We are told the ‘free’ market is an efficient processer of information, and that if left to its own devices, it will naturally produce efficient results that are better for everyone. But this is simply not the case. The market expresses the values of those who control it. It is no coincidence that our current market structure works better for some rather than others.”

    So first he’s analyzing a free market. But then “The market expresses the values of those who control it.” so it’s not a free market, it’s a controlled market. And then “…our current market structure…”, which is not a free market by anyone’s definition.

    I don’t think I’ve ever encountered an opponent of liberty who was even CAPABLE of arguing without equivocation (since it forms the foundation for virtually 99% of their arguments). One gets the idea that if you were somehow able to pin them down to define their terms up front, and then stick with those definitions, their very heads would explode or something.

  2. You are right that it is often difficult to separate means and ends. But propositions in economics about the value judgments of others are not themselves value judgments. For example, “people have ultimate ends” is a not a normative claim, even though it is about values.

  3. The concept of ‘value free’ or wertfrei has proven to be useful in economics just as the concept of ceteris paribus has proven useful but that does not mean that it is representative of the real world. Imagine (and in this sense it is easy to see the innumerable errors that empirical economists then espouse) if the concept of equilibrium was all there was for economic analysis. It would be a tragedy if the real world alternative of disequilibrium was not pursued by economic thinkers.

    So are we bound and constrained by the concept of ‘value-free’ in such a manner that we cannot accept the possibility that in the real world economics and ethics are inseparable? Is it not possible to refine the distinction between ethics and economics so that they can be studied in a way that is more closely representative of reality?

    The fact of the matter is that means and ends are not wholly independent of each other. Consider the example of a constitutive means which is an integral part of the ends. In the real world no one is going around trying to surgically separate constitutive means from ends! Therefore, logically and conceptually, means and ends overlap which causes the value of the means to be ascribed upon the ends and the value of the ends to be ascribed upon the means.

    This is one of the frontiers in economics science. If done properly using deductive logic this kind of exploration advances economics.

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