Monday, July 20, 2015

Economic Concepts And Normative Entanglement

Don't you think it's kind of weird from the economic point of view "exercise more" could be a preferred weight loss strategy to "eat less"?

I feel like economics should have nothing to say on the subject. And in one sense, I'd say economics agrees with me: as a study of what causes what, as a set of theories or models about what happens when you do X or Y, economics just sits there. It can't have any particular normative content -- that is, it can't, by itself, say that one thing is better than another or that we should or ought to do something rather than something else.

In this way of seeing things, economic theory itself is neutral: it doesn't recommend any particular course of action. It's not until policy makers articulate goals that you can then put the theory to use in figuring out how to achieve those goals.

Theoretically, I think this is correct, but I'm often struck by how tangled up things get in practice and how difficult it is to keep the descriptive and the normative apart. It's a complex matter, but I think at least one important part of it has to do with concepts like "rational" and "efficient." Yes, in a sense you could use these concepts merely as descriptive terms, as devoid of evaluative or value-laden content. But it's not easy. How is calling something "rational" or "effiicent" not a way of recommending it? Or, even more strikingly, how is calling something "irrational" or "inefficient" not a way of criticizing it?

One reason it's very difficult, in practice, to use those concepts in the neutral descriptive way is that they are actually ordinary language concepts with deep connections to our lives. If a physicist says that the table is made of atoms, that doesn't give me any feelings about tables, particularly. I mean, it's interesting and maybe useful but I don't have any deep historical personal relation to the concepts involved. But if my mortgage broker tells me that preferring a fixed-rate mortgage is "irrational" -- how can I possibly interpret that as a neutral statement?

Some neutrality defenders I've spoken to have pointed out that each of these terms has a technical definition in economics which means they're not the same concepts as the loaded, normative ones we use when we're arguing with each other about whether it makes sense to eat cake or go to the gym or whatever.

I get that -- and theoretically, I think it's correct. But the problem is this: if the technical concepts aren't in some way connected to the ordinary concepts -- if they're really formal technical definitions like "atom" that have nothing to do with our lives, then how can we use the conclusions? There has to be some way of explaining how the formal definitions are related to things we want to do, like bringing about prosperity and justice and liberty through rational and efficient methods -- where these concepts are the ordinary concepts, not the technical ones.

So one thing I think happens -- and this happens not at the site of economic theory but out in the world where we're all just talking and thinking about what to do -- is that instead of thinking through the possibly fraught and complex relationships between the technical concepts and the ordinary ones, we just substitute in as if they're the same.

And that's where the strange things happen. If you think economic efficiency is good, and economic activity tends to produce it, you look at weight loss and you see immediately that, other things being equal, exercise tends to increase economic activity while eating less tends to decrease it.

Exercise often means gym memberships, special shoes, etc etc., while eating less tends to mean not buying extra cupcakes at the store. Weirdly, even following food guidelines for healthy eating seems to mean feeding yourself with less economic activity -- since you're eating less processed food and eating at home.

So, yes, in a sense, from the economic point of view "exercise more" could be a preferred weight loss strategy to "eat less." Given that there seems to be converging agreement that eating less might actually be a more successful strategy, it might be the case that what is good from the economic point of view might be opposed to our own individual good.

This is, of course, but the tiniest example, but I think similar mechanisms are at work in the large ones as well. Efficiency measures how things are overall and says nothing about individual rights or justice or whether the status quo is itself acceptable. If you take a society of rich people and poor people, and you just make the rich people better off, you have, in a sense, increased "efficiency."

Sure -- theoretically, you can use the term "efficient" in the technical sense in which it's a formal, value-neutral, concept and to say that something increases efficiency isn't a way of recommending it, and then you could go on to have a whole discussion about whether increasing overall efficiency by increasing the well-being of the well-off is a good thing to do in the given case or whether other things should happen.

But, for all kinds of reasons, that's often not how it goes in reality.


Wesley Buckwalter said...

You might be interested in this article by Shira Elqayam and Jonathan Evans on keeping normative and descriptive accounts of reasoning competence separate: I agree with you about the value laden nature of economic study, perhaps even more than in cognitive science. So much so in fact that I'm having trouble imagining how we might begin to separate these things without the presence of basic starting values at some point coming into play in the beginning of our economic theorizing. Any ideas about how such a system might work, or was the suggestion that we shouldn't hope for such a system and instead make the normative commitments driving inquiry more transparent?

Patricia Marino said...

Hi Wesley, I'll check that out, thanks! overall I think it'd be better to make the normative commitments more transparent (and stop using fudge words like "a political question" for what is really a question of ethics or values). But I'm skeptical about progress in that direction. In the meantime it might be better to try to separate it out. Maybe it would be less confusing if specialized terminology had specialized names so that it seemed less obvious how to map the technical concepts onto the ordinary ones. Or maybe that'd just be an increase in jargon, I don't know. Maybe answers from academics and scholars to questions like "what should we do about X?" should always begin with the clause "Well, it depends on what you want to achieve." Unrealistic. But maybe when I'm Queen, I can make a rule.

Daniel said...

Thanks for the interesting post. It's been rolling around in my head all day, and I have 2 questions:

1) How can we recognize the ordinary language concept use of "efficient" or "rational"? I feel like I understand the sentiment of your post, but when I start pressing the issue, the ordinary language concept sort of loses shape and becomes hard to identify. Especially in a world where people think that economics has colonized other disciplines or aspects of our lives, which a lot of critics seem to hold as central to their arguments, what is the ordinary concept? But even outside of the critiques of economics, how would we distinguish between the ordinary and the particular? And how or who decides what each weighs?

2) Sort of related, I feel a little flummoxed when it comes to the ordinary language concept of "efficient" that is separate from the sphere of economics. Isn't the whole concept "efficient" deeply connected to the economic point of view? Here, I wonder if there really is a difference between the ordinary language concept and the economics concept. Could it not be an economic concept (in which "economic" does not solely mean the 20th-century academic discipline) from the start? "Rational" feels different from "efficient" in this sense.


Patricia Marino said...

Hi Daniel, thanks! I agree ordinary language concepts are vague and hard to pin down but I don't think that means they don't exist or you can't draw distinctions among them. The idea I'm responding to in the post when I talk about the "technical" concept is that there is an economic use of the term that is formal, that doesn't have to do with the way we use the concept in ordinary life. For example, if someone says, "the economic definition of "preference" is mistaken because preferences aren't really like that, invoking the technical meaning leads to the response, "We can define the terms in our formal theory however we want." That would be the technical use as I'm thinking of it. Given that people use the words in question even when they've never studied formal economics, I think it's fair to say there is an ordinary language concept that is distinct from that.

In that sense it seems to me efficient has an ordinary use concept since it's an idea that was well in use before the economic definitions of it were developed and it's a word commonly used outside that context.