Economics is not consequentialist
A lot of people won’t care about this post – and the ones that do will care a bit too much. So I will keep this relatively short. But just believe me that this post is the first in a series of three that will eventually get to the point 😉
Economics is not consequentialist. The framework allows for the natural imposition of a broad range of consequentialist ethical judgements yes, but by design economics itself is not consequentialist – in fact it is pretty easy to observe an economic argument and just make a deontological statement that gives you some conclusion (see John Rawls and how his discussions fit neatly in contemporary normative economics literature). Just because economists use the term “utility” when talking about people making a choice does not mean we have a utilitarian ethical framework in mind for justifying choices – we are trying to describe what happens, not prescribe what should happen. Even normative economics, with its reliance on ill defined social welfare functions, is simply trying to describe types of ethical consequences from policy – the process of deciding what “should” be done is the responsibility of policy analysts and politicians given the description that is provided.
Mankiw’s separation between economist as scientist and economist as engineer is apt in this regard. In both ways the economist is not imposing values – they are either trying to describe trade-offs, or to describe a policy they are commissioned to. The value judgement comes when stating what should be done.
I say this because people constantly confuse the policy prescriptions that are made using economics language with economics itself. I have discussed this in more detail here.
Confusion between economists discussing policy and many non-economists (but technical experts) discussing policy is this distinction – economists have a preference for discussing trade-offs and stating that the choice between them needs to be dealt with by further analysis. Many non-economist experts start with a normative position (we SHOULD lower obesity, or the Gini coefficient, for example) and then work to try to “solve” from there. This “normative economic” position is a lot more fraught, but we can’t pick an option without confronting it – in truth it requires a lot of analysis and understanding from a variety of disciplines.
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In fact, to reach a “conclusion” by definition requires assumptions that have some value content.
Take the example of physicist and engineer and the building of a bridge. Yes there are sub-branches of economics that are similar to these – in terms of either describing theoretical relationships or trying to discuss the implementation and trade-offs of a policy. But neither makes the choice to build the bridge, they simply fill a roll in its construction – either by describing the theoretical framework of a bridge or practically designing the bridge to meet the given specifications. If the bridge was the “wrong choice” we wouldn’t blame the physicist or engineer, so if a politician or the public chooses a bad policy why blame the economist?
Economists may be complicit in not describing trade-offs appropriately, but that is not the result of the discipline being consequentialist. Instead we need to ask why broad knowledge of the trade-offs involved with a policy was not articulated and received by the public and politicians. What were the incentives involved – on all sides – that led to that outcome? What are the issues with the way economic knowledge is communicated to intelligent lay people in relation to their “common sense” models of what is true. What are the issues with how the type of knowledge the discipline generates matches the concerns and needs of people asking questions about economic outcomes?
Given this, the application by economic experts may have issue even if the discipline itself is robust. When I return to this issue I will be less kind to economists by discussing what we do in practice – specifically the fetishisation of policy perfection that pervades the discipline.
Note: This isn’t a critique of any economist you may picture – in fact it is easily as much of a critique of myself as it is others. I’m increasingly of the view that issues of interpretation of economic ideas stem from economists and the narratives we use to communicate, not the underlying methodological foundations of economics itself.