"It is quite another thing to conclude that therefore ends of good policy are beyond the realm of scientific discussion. For surely the primary requisite of a working social system is a consensus on ends. The individual members of society must agree upon the major ends which that society is to seek. If any large share of the population actively disagrees with the society's ends, and in particular if it believes that the system is unfair by the group's criteria, the social system will surely disintegrate, probably with violence.
This is almost axiomatic in modern social theory…
At the level of economic policy, then, it is totally misleading to talk of ends as individual and random [as new welfare theorists do—ES]; they are fundamentally collective and organized.
If this conclusion be accepted, and accept it we must, the economist may properly exceed the narrow confines of economic analysis. He may cultivate a second discipline, the determination of the ends of his society particularly relevant to economic policy. This discipline might be called, following J.N. Keynes, applied ethics.7
7 See his Scope and Method of Political Economy (4th edition: London 1930) especially chap. II. I did not realize how neglected this excellent book has become until, when I recently referred to it, several friends expressed surprise that I did not know Keynes's middle name was Maynard! –GJ Stigler (1943) "The New Welfare Economics" American Economics Review, 33(2): 357-8.
At the very start of his famous (1953) methodology paper, Milton Friedman calls attention to a three-fold distinction he inherits from the logician-economist, J.N. Keynes (yes, father of that more famous philosopher-economist, J.M. Keynes): "In his admirable book on The Scope and Method of Political Economy, John Neville Keynes distinguishes among "a positive science ... a body of systematized knowledge concerning what is; a normative or regulative science...[,] a body of systematized knowledge discussing criteria of what ought to be...[,]an art... [,] a system of rules for the attainment of a given end"; comments that "confusion between them is common and has been the source of many mischievous errors"; and urges the importance of "recognizing a distinct positive science of political economy."* Friedman admits that he is primarily interested in articulating the nature and methodology of positive economics, and along the way he wishes to argue that "positive economics is in principle independent of any particular ethical position or normative judgments." (By contrast, according to Friedman normative economics presupposes positive economics.) In what follows, I accept these distinctions by stipulation.
Neither Stigler nor Friedman, follow Keynes slavishly (recall this post, too). In particular, in the passage quoted at the top of this post, Stigler offers a world-historical innovation over Keynes that will have far-reaching consequences in economics and the way it understands itself as a policy science. In Keynes, "applied ethics" (that is, normative or regulative economics) is the business of philosophers not economists. And one of the main reasons it is the business of philosophers (and not economists) is that Keynes does not expect consensus over the ends of society to emerge. As he writes, "There is a further reason why a positive science of political economy should receive distinct and independent recognition. With the advance of knowledge, it may be possible to come to a general agreement in regard to what is or what may be in the economic world, sooner than any similar agreement is attainable in regard to the rules by which economics of individuals and communities should be guided. The former requires only that there as to the facts; the latter may be prevented by conflicting ideals." (50-51) So, Keynes's proposed strategy is to remove (applied) ethics as much as possible from economics so that economics can quickly hasten to become a mature (in a proto-Kuhnian sense) science.
In his 1953 essay, Friedman, too denies "fundamental differences in basic values." And, he, too, accepts that differences in basic values can cause people to "fight." So, Friedman follows Stigler's move. But Friedman is a bit more cautious than Stigler in two ways. For, first he relativizes the denial to 'disinterested citizens' and 'circumstances' prevailing in 'the Western World' and 'especially the United States' (5). Second, Friedman thinks that consensus among even legitimate experts is (unlike Stigler and Keynes) not sufficient "on questions that matter so much, "expert" opinion could hardly be accepted solely on faith even if the "experts" were nearly unanimous and clearly disinterested." The evidential basis of the consensus is key for Friedman. In context he does not explore how one can challenge expert agreement. So, in principle, Friedman would be a lot more cautious than Stigler would be about exporting one's economic analysis from the United States to other countries.
While Stigler's 1943 essay was not very influential within professional economics, it developed the key moves for a technocratic conception of economics at the heart of the so-called Chicago school as formulated by Milton Friedman.++ Now, neither Stigler nor Friedman was very interested in social engineering. While their names have become synonymous with neo-Liberalism (shock-doctrine, 'Washington Consensus, etc.), they were both instinctively extremely mistrustful of social engineering projects. But, as I have recounted, their Chicago school colleague, A. Harberger, was not; he happily compared economists to "highway engineers" in his extremely influential (1971) essay, in which he proposed that, "when evaluating the net benefits or costs of a given action (project, program, or policy), the costs and benefits accruing to each member of the relevant (e.g., a nation) should normally be added without regard to the individual(s) to whom they accrue." That is to say, if one's client (the ruler, the international institution, etc.) wishes, one presupposes unanimity over ends within the nation. Unlike other engineers, economists do not have a code of ethics.
*While Friedman thanks his close friend, Stigler, in his acknowledgments, it turns out that Friedman uses the first (1891) edition of Keynes's book.
** In context, Stigler quotes Wallis and Parsons, who helpfully traces these issues back (via Max Weber) to Hobbes (see here for more).
+When I made these remarks at a lecture in Athens today, Vasso Kindi helpfully called attention to Wittgenstein's distinction between the presuppositions of a form of life and what takes place within it.
++Interestingly enough, it did so by opposing another technocratic conception (promoted by Samuelson and later Arrow).
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