| | Excellent article!
This normative/positive, opinion/fact dichotomy is an embarrassment to economics. As a student of the subject, I argued with my professors about it -- even the free-market ones like Professor Williams -- but to no avail. This spurious distinction, now virtually unanimous within the economics profession, derives from David Hume's view that one cannot derive an "ought" from an "is." But, as you correctly point, the view is self-refuting. Is it not a fact that one ought to accept the normative-positive, opinion/fact distinction? Yes, echo a chorus of economists, blithely unaware of the self-contradiction they are committing! Normative statements are a species of factual statements, not an alternative to them. Normative statements are factual statements.
It has been said that philosophers could use a good dose of economics to bring them back to the real world. Well, economists could use a good dose of philosophy for that very same reason.
In disputing the normative/positive dogma, the reply I got is that normative statements cannot be labeled “true” or “false”, because people disagree about them – they disagree about what is good and bad, right and wrong. But people often disagree about positive statements too. Disagreements about what is "factually" correct are rife within the economics profession. Does that mean that positive statements, which purport to describe facts, cannot be labeled “true” or “false”? Of course not. Just as disagreements cannot disqualify positive statements from being factually correct, so they cannot disqualify normative statements from being factually correct. If they could, then the plainest truths could be called into question, simply because some fool disagreed with them.
I put the following question to an economics professor at my university: Suppose, I said, that an ignorant, first-year economics student were to disagree with you about the first law of demand. Would the student’s disagreement, by itself, invalidate the truth of that law? Would it invalidate the proposition that the law ought to be accepted as factually correct? He was unmoved. He had accepted the view that truth is determined by consensus -- that it is a product of collective subjectivism -- instead of being determined by objective reality.
How does one determine whether or not a proposition corresponds to reality? By consulting reality, not by consulting other people's judgments about reality. To take the latter approach implies an infinite regress. One is seeking to answer the question, "What is true?" by reference to "What others think is true." But what is their basis for thinking that something is true? What still others think is true, etc., ad infinitum. In order to determine whether an idea is true, someone must first look at reality instead of simply at other people's judgments about reality. If collective subjectivism were the standard of truth, then no new or unconventional idea could ever be accepted as true, because it isn't already accepted as true.
In short, there is no basis for the normative/factual distinction so commonly upheld in economic theory. And, in fact, that distinction, while endorsed as a theoretical dogma, is commonly disregarded in practice by the recommendations of economists on how businesses and government "ought” to conduct their affairs.
- Bill
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