Monday, April 9, 2018

Can economics be non-ideological (objective)? Yes and no.

Any economic investigation proceeds on the foundation of certain basic, often unstated, presumptions. And these presumptions are value-judgements; they could, with justification, be described as ideological. A couple of examples should make this clear.
Consider the question of whether the imposition of an enforced minimum wage above the free-market wage reduces employment or not (and the related policy prescription).
Should the proponent of the minimum wage be required to show that its imposition does not reduce employment in order to successfully defend its imposition, or should the antagonist of the imposition be required to show that it does in order to successfully oppose the policy. Two important things need to be noted about this question. 
  1. In order to proceed with the study of the effect of minimum wages it has to be answered. In order to complete the sentence "the study shows ...." one has to answer this question. One has to decide where to put the burden of proof. And 
  2. Answering it requires a value commitment, not a scientific one. Where to put the burden of proof requires a value-judgement, an 'ideological' commitment. Arguing for or against the placement of the burden of proof requires more than the 'scientific facts'. For example, in this case, I would argue that the burden of proof should be on the min-wage proponent to show, as a necessary condition (not automatically sufficient) that it does not reduce employment, and I would defend this claim by saying the the policy interferes in private transactions that *ought* to be given moral priority. Free to trade ought to be the default - ought to prevail in the absence of compelling evidence of an overriding good to be gained by interfering with it. Needless to say, those who see government as a superior judge of what is good than private individuals would argue differently. And, though evidence may influence these instrumental values, they are values nevertheless, prior to any investigation.

Once the values are agreed upon, the investigation should be as neutral and objective as possible. It should not be easy to refute the claim that min-wages reduce employment, ceteris paribus, but the evidence should be examined honestly and transparently. In that sense, yes, it can be neutral.
Another important example (there are a multitude), Consider the policy prescriptions of the climate activists. They proceed as though to oppose them effectively requires you to show that they are wrong in their climate predictions and cost estimates - hence the attempt to deligitamize opponents with the phrase 'climate deniers". I have argued that this is totally upside down. What they are proposing, even in the minimal versions, is interference in the private production decisions of millions of individuals across the planet - interference in the actions that affect the livelihood, sometimes survival, of millions. Surely, on moral grounds, they should have a high burden of proof to show that such interference is warranted by the dangers they posit. This relates not so much to their predictions as it does to the costs of what they predict and, even more, of the remedies they propose. Absent their meeting this burden they should not be taken seriously - or rather they should be taken to be as dangerous as the central planners of the 1930's - the market socialists. Again, this is not a completely scientific judgement, but, rather is based on a firm conviction in the value of and the robustness of the free market economy.
In dealing with economic discourse, especially disagreements, it may be necessary to deal first with the conflicting presumptions of the protagonists.