Question

Is a value-free economic system possible? Can economic analysis be a-political?

Answer 1

Implementing a sharp difference between facts on the one side and values on the other was a main element of this growth within economics. If you want to be scientific and achieve objective truth, the tale continues, you only have to cope with facts that are empirically tested.

Values are the things that matter to us, on the other hand: freedom, equality, justice, fairness, loyalty. These are a matter of view at first glance and can be discussed ad infinitum depending on one's cultural background or ideological preferences. There is no clear measure of who is correct or wrong with values.

Positive economics is the formal and empirically testable elements of economics that deal with the reality of things in the globe. Normative economics addresses how things in an ideal world should be. Thus, young economists are taught very soon that if they want to be as objective and precise as possible–as most do–then they should concentrate on positive economics and leave out subjective values.

Therefore, we have a scenario in which economists play the societal function of pragmatic information analysts: researchers conducting thorough technical analyzes on certain problems and leaving the values to leaders and policymakers.

The very choice to examine what part of the globe is an expression of what matters to us, that is, an expression of our values. We could spend billions of euros on studies into guns, or we could spend it on studying farming techniques to relieve hunger. Both are science projects, but the decision of spending time and money on one or the other depends on what we care about.

Economists may also choose to concentrate their study on personal financial markets and the banking system, or they may concentrate on government problems such as welfare economics, or how to make healthcare affordable. Each assessment may show incredible mathematical and intellectual sophistication, but the decision is normative. It implies that you think that some specific problem is worth your time and effort more than the myriad other problems that you might explore.

By operating under the assumption that economics is value-free, we lose the opportunity to consciously create the kind of world in which we wish to live. We are removed from the discussion

The word ' political economy' at the World Bank and other development agencies has become an increasingly common component of the vernacular. At the same time, interest in development elements of political economy has also seen a revival in academia, both within departments of economics and political science, and even in major company programs. There is still a lot of skepticism about the value that such a view can contribute to the efficiency of growth.

The increasing interest in political economy assessment is driven by a chain of ideas: First, there is the fact that reforms often fail even when alternatives are accessible to enhance public welfare. It is difficult to abolish fuel subsidies in Nigeria, despite the fact that the subsidy system is both inefficient and unfair to the vast majority of poorer people.

Second, better governance is required to enhance the probability of good policies–whether reforming subsidy systems, enhancing highway maintenance and school management, or better regulation of the economic sectors. This needs politicians to become less self-serving and more concentrated on public goods provision.