Re: The Mind of Paul Krugman: Mahathir, Pinochet, bad men, good policies - and the 'job of economic analysts'

[Ralph Johansen <michele@xxxxxxxx>]

Krugman says, "Well, I still remember the days when left-wingers used to claim that anyone with a good word for Chile's free-market reforms had bloodstained hands, because he was in effect endorsing Gen. Augusto Pinochet....And the job of economic analysts is, or ought to be, to assess the policies, without regard to who makes them".

 

"Free-market reforms" come in a basket, with a history and context, a who and a what, how they got there, what thousands were shot down in cold blood and what has been left in the wake of the carnage, aside from the policies that are being reviewed for their "effectiveness"; so for Krugman to say the value-free

"job of economic analysts OUGHT to be, to assess the policies, without regard to who makes them", it says to me he ignores the context, just what I would expect of a bourgeois economist who looks only at what produces the result of self-expanding accumulation of capital for favored elites. And my point seems to be that Krugman is no different in this respect and that his words reveal that this is the ought-to-be world in which he chooses to function. It isn't that he just proposes this - he accepts and explicitly affirms it. And the left economist that he disparages is looking at the context, with a moral basis that assesses results from the perspective of the human costs, the process, the carnage and its victims.

 

Ralph
 

----- Original Message -----

From: Jurriaan Bendien

To: PEN-L@xxxxxxxxxxxxxxxx

Sent: Thursday, September 23, 2004 4:38 PM

Subject: Re: The Mind of Paul Krugman: Mahathir, Pinochet, bad men, good policies - and the 'job of economic analysts'

Hmmph. A few thoughts about this. I don't think you can really accuse Krugman of proposing a value-free economics. I think he's basically interested in an economic system that is fair, just and delivers the goods in the real world and within the limits of what is feasible, i.e. it works. But that already involves values which specify what those things mean.

If for example I design a feasible socialist system of production, distribution and consumption based on a theory of socialist justice, I'm sure Krugman would be interested in it. I haven't studied his concept of economics in detail, but it would probably ultimately boil down to something like the optimal allocation of scarce resources. There wouldn't be all that much difference between Krugman and let's say Scitovsky about that definition.

The problem as I see it with a conception of economics which limits economics to an objective assessment of alternative policy options is, that it accepts the goal, and then debates which policies best achieve the goal. This is essentially a technocratic conception, in which the acceptance of the goal itself already implies values and valuations. The goal itself might be questionable, and normally there is not just one goal but quite a few, and you might be able to trace out a hierarchy of goals which reveals the foundational assumptions, a theory or ethics. In the end all you can really say then is that an economist aims for the most "economic" solution to the problem, whatever that problem may be. But "economic" in what sense ? If for example we unpack notions of "efficiency" it's immediately clear that the means-ends relationships involved do refer to social values. Second, "evaluating" different policy options again refers to a set of criteria, but the c hoice of those criteria also implies values and valuations.

An economist can always argue, "if X is your goal, then given the best evidence we have, Y is the objectively the best policy to achieve the goal, and Z does not achieve the goal", which is a perfectly acceptable scientific argument. It's just that this judgement itself is not delivered from neutral, uninvolved or external vantage point, but from the point of view of a participant in the process who has certain morals, and problematizes economic realities in a certain way. Confusion sets in when "objectivity" is conflated with "neutrality" or "impartiality". You can be objective in having due regard for all the relevant evidence, have a genuine scientific concern with truth, but that does not mean you're not partisan. Not taking a position is also a position, it's a position which says "I don't want to concern myself with these issues" (which could be rationally or ethically defensible).  All you can really do is make your partisansh ip explicit, and distinguish between personal judgement about the objective evidence or personal values, and what the objective evidence actually is.

A statistician might produce a data set based on systematically gathered observations which provides a body of objective evidence about some topic. But when it comes to interpreting the data set, we could tell various stories about the data set. We could say that some interpretations are definitely false or inappropriate, but we could also make a range of statements about the data set which are true, which fit with particular interpretations. But in selecting significant truths, we don't get away from value-criteria, or from a theory which problematizes certain quantitative relationships, and not others.

Personally I'm convinced that scientific progress occurs through the confrontation of competing or alternative theories with the bona fide evidence or data. That requires freedom to develop and rationally debate alternative views, but also a basis of agreement about what the evidence really is, or at least a willingness to find out. So I think we still need Krugman anyhow, in the sense he's genuinely interested in those things... with a concern for objectivity, but not without value-commitments.

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