Updated December, 2021
Most economics textbooks put some effort into distinguishing between normative economics and positive economics. Normative is defined as having to do with ethical judgments about what is good or bad or better or worse. Positive is defined as being pure description without any ethical judgement. Economists like to say that pure science is positive whereas religion and much of philosophy is normative and they try to make a distinction between economic science (positive description) and economic policy (normative prescription).
But this is wrong. Humans never say or do anything that is purely descriptive. The very concept of positivism is a fallacy. Even God cannot do or say anything to humans that is purely positive if humans have moral importance.
Everyone constantly encounters moral actions but we rarely recognize them simply because we rarely consciously think about the morality of our decisions. Most people recognize that moral actions are pervasive around us every day, but still fall far short of the true morality of everyday actions. Research has found that about 30% of Americans recognize a moral action in their immediate presence in any given hour. That is a lot, but it is wrong because…
All choices have moral valence and every thought is a choice.
Skitka et al. found that people see choices as having varying amounts of moral valence and think that many of their choices and attitudes have zero moral weight. Skitka et al. give the example of Stanley Milgram’s famous experiement where participants believed they were torturing others with life-threatening electric shocks and argue that the participants may not have seen those actions as having any moral weight because humans do not perceive that morality is an essential feature of some choices, even choices involving forcing others to endure severe pain, injury, and risk of death. But choosing to perceive a choice as “not mattering” is itself a moral choice! It is another example of the positivist fallacy in which people like to think that some of their choices are free of moral implications. The positivist fallacy is liberating because it give the moral license to do whatever you want without regard for others.
In reality, Stanley Milgram’s participants all made moral choices and they did not recognize it because they did not wanted to own them. People often want to avoid recognizing their responsibility for their moral choices especially when their choices seem bad! Or perhaps people fail to recognized the morality of decisions when they do not deliberately and consciously engage their moral reasoning faculties, but all decisions have moral valence and whether or not someone recognizes the morality of their own choice is irrelevant to whether it is moral or not.
One of the most fundamental concepts of economics is the opportunity cost. That is defined as the next BEST thing that you lose when you make any choice. Notice that “best” is part of the definition. Best is a normative judgement. Economics teaches that every choice we make has an opportunity cost and that means every choice we make a normative judgement. Due to the butterfly effect, even trivial choices can cause dramatic effects on the world over time, so nothing is trivial. Of course, our inevitable cluelessness about butterfly-effect consequences means that we cannot be held morally responsible, but we also constantly make trivial choices that have easily predictable imminent moral weight. For example, every minute I unconsciously make the seemingly trivial choice to keep breathing. That is a normative choice and now that you are thinking about it, you are consciously deciding to continue breathing too. You could stop at any time and that would also be a normative decision. I hope you do the right thing.
We also make numerous moral choices on a grander scale. When I chose to spend money eating out this year, I simultaneously chose to chose to NOT spend it saving lives. That decision, like all decisions, was normative. I chose to become an economist and I therefore decided that economics was a BETTER path for me than trying to help the homeless like Mother Theresa or becoming homeless myself. I decided that it is at least as good if not better than all the other career paths I could take. I might have been wrong, but that really is the choice that I made and continue to make. Every scientist who tries to do purely positive science, is choosing that path as a normative decision. One of the ironies of positivism is that it is a normative philosophy of science. Positivists think that normative philosophy is not as GOOD as positive science. Thus positivism denigrates itself because it is a normative philosophy.
No choice, no problem.
All problems are due to bad choices and if you didn’t have a better feasible option, you didn’t have a problem. For example, nobody says that a rock has a moral problem because a rock cannot make choices.
If you have no choice, you have no moral responsibility.
A person that is pushed out of an airplane has no moral responsibility to stop falling to avoid dying and killing someone in a crowd below. Unfortunately, there is an all-to human tendency to assign blame due to an unfortunately outcome when there was no feasible information that could have prevented an unfortunate outcome.
This tendency to blame people for bad outcomes is sometimes called the historian’s fallacy (or hindsight fallacy) and it happens because after a problem has happened and we know how it ends, we can’t think about the problem without the ending coloring everything about how we think about the past. It is like the way that watching a movie twice in a row is a totally different experience the second time. For example, the victims who died in the World Trade Center on September 11 did not make a bad decision to go to work that day due to an information problem because they had no way of obtaining information about the terrorist attack before it happened. There can only be an information problem if it would have been feasible to get someone with better information to help make the decision. If there was no improvement was feasible, then it wasn’t a bad decision. You might as well say that gravity made a bad decision to collapse the twin towers. Thinking that a bad outcome necessarily means that there was a bad decision is an example of the hindsight fallacy and leads to bad management. Sometimes very good things happen because of very bad decisions and sometimes very bad things happen despite all the best decisions being made.
No description is purely positive
Positivists might counter that they may have made a normative decision to become a positivist, but that an equation like E=mc2 is a purely positive description of the world. This is false. No description is purely positive because all description requires normative choices. In the first sentence of this paragraph, I decided that E=mc2 is a BETTER example of what positivists would think is purely positive than all the infinitely many other possible examples. I could have made a ‘positive’ description of the atoms of iodine on my little toe, but I decided that E=mc2 would be BETTER thing to focus on. A physicist could devote her energies to infinite different pursuits and by choosing to examine E=mc2 rather than the iodine atoms on my little toe, she is making a normative decision, not a positive one. As the Attention Merchants are keenly aware, attention is an extremely finite resource and we have to constantly decide what is the BEST thing to focus our attention on.
The scientific method itself (in all its many variations) is a normative value judgement. Scientists think that it is a BETTER guide towards truth than astrology or pure intuition. The scientists who think science should be value-free are making a value judgement about science. First of all, the idea that values are bad is a normative judgement and secondly, the discernment of what science is value-free is a subjective judgement imbued with normative meaning. One of the main processes of modern science is the selection of journal articles for publication is a normative judgement which is biased towards the tastes of the current paradigm and which is extremely biased towards selecting papers that meet that 95% cutoff. The 95% statistical significance cutoff is a normative judgement that was originally chosen for convenience of calculation and convenience is a normative criteria.
The distinction between positive and normative is still useful!
Despite the fact that nothing is purely positive and everything is normative doesn’t mean that there is no difference between the two. Everything that we make choices about is normative and everything that we cannot make a choice about can be described positively. Although we have to make many choices about what to describe and how to describe it, it is still important to try to describe things as objectively as possible and realize how our normative goals inevitably bias our descriptions.
This is where the word ‘objective’ comes from. When we try to be objective, we are trying to pretend that something is an object with no moral valence that we are encountering for the first time. Avoiding moral feelings while describing an ‘object’ can help reduce the wishful thinking that humans are prone to. People experience moral motivations through emotions and scientists should attempt to see things without their sight being clouded by emotional bias.
The highest normative value of science is truth. The important reason to think about positive descriptions is to try to be as objective as possible in accurately describing reality while keeping in mind how we are all prone to all sorts of bias and our normative wishful thinking is a very powerful source of bias in our observations of the world. So long live positivism! …As long as it doesn’t become a religion. That was the problem that the positivists had. They developed a religion that was blind to normative concerns even though the normative is the foundation of all that matters also the foundation of why attempts to be positive are good and how we decide what positive observations to make and how to make them.
The High Opportunity Cost of Positivism
When scholars choose to think that positive science exists and is BETTER than normative judgement, they are not only engaging in a logical fallacy, but they are failing to think about the crucial importance of making the BEST possible normative judgments. That is why positivism isn’t just irrational and illogical, it is also harmful. People who believe that they are somehow separate from or ABOVE ethical reasoning are more likely to have BAD ethical reasoning because they don’t realize that they are making important normative judgments with every breath they take and every sound they make. Positivists are more prone to making ethical mistakes like Thomas Midgley, Jr. who won numerous scientific awards from the scientific community for inventing the lead compounds in gasoline that poisoned people around the world until it was banned and the CFCs that were well on their way to destroying the planet if they had not also been banned.
The whole point of any description of anything is to accomplish some sort of end goal. That is normative. Therefore all description is motivated by normative causes and nothing is purely positive. People who pretend to avoid normative, ethical reasoning are deceiving themselves and prone to making bad ethical judgements, like Mr. Midgley, because of having accidental normative motivations rather than deliberately facing up to their ethical choices and challenges.
What most positivists really mean when they talk about positive analysis is empirical analysis. “Positive” is a misleading term for this because empirical analysis always has some measure of uncertainty, so empirical analysis is never completely positive by the ordinary dictionary definition of the word. And it is good to keep sight of the fact that all empirical analysis is always just a means to an end. Some researchers (positivists in particular) may not be fully conscious of their ends, but everyone always has normative goals that motivate all empirical choices and all communication about them.
That is a very good thing. People shouldn’t waste their time randomly trying to observe iodine molecules and blathering about them without any purpose. The positivists are wrong to elevate positive analysis over normative analysis. It is only through normative analysis that positive (or, we should say, empirical) analysis gets any worth whatsoever. Without normative motivation, empirical facts are as useless as the knowledge of the precise location of that atom of iodine on my little toe. It is the normative makes life worth living. Trying to eliminate the normative is nihilism.
An example of how positivism has been nihilistic is the rise of mmutilitarianism. Positivists caused economics to reject its moral foundations in the 1930s and 40s and abandon utilitarianism. Then this marriage of positivism and economics created a mutated accidental lovechild, mmutilitarianism, which would cause less harm if economists embraced the normative so that they could recognize mmutilitarianism as being the moral philosophy that it is and not a positivist way of empirically comparing different states of the world. When you accept that mmutilitarianism is a moral philosophy, it is easier to avoid its weaknesses and capitalize on its strengths as a simple heuristic that guides most of the “positive” empirical analysis in economics.
Part of positivism is useful and that is the analysis of ends and means, but positivists have confused these concepts partly because they chose to adopt new terminology that makes the concepts more confused. Going back to more commonly-understood English terms might help clarify the important issues. We should replace the word “positive” with the word “empirical” which is closer to what positivists really mean anyhow. Then we should recognize that normative and positive are inseparable because all empirical analysis is useless without normative goals. Most people don’t understand “normative” and a better word would be “useful.” That makes it obvious that people can do never do anything with empirical (or “positive” ) information without making normative choices and it would be useless to try. The positivists believed in the fallacy that there is a division between the normative and the positive in science, and the change in terminology makes this fallacy clearer. Some empirical information and theories are more useful than others, but there is no point working on empirical analysis that is not useful.
The logical positivist influence upon economics also created other problems such as the over reliance upon axiomatic deductive mathematical models that are almost completely divorced from empirical evidence and led to the real business cycle macro fiasco. Logical positivism was popular among philosophers in the early 20th century, but was mostly abandoned by philosophers a half century ago. Economics is still under its grip and it is time for economics to start catching up with the developments in the philosophy of science over the past 50 years since economics rejected philosophy for not being positive enough, which, ironically, was a normative, philosophical judgement.
The distinction between what is (positive) and what ought to be (normative) is sometimes traced back to David Hume who claimed that you cannot get an ought from an is. Many positivists use this idea to claim that science should ignore the ‘oughts’ (normative concerns) and just focus on the ‘is’ (positive concerns). But this is impossible and it is a misinterpretation of David Hume. Hume also said that, “Reason is, and ought only to be the slave of the passions, and can never pretend to any other office than to serve and obey them.”
Hume is saying that we cannot decide what to observe and what to describe ‘is’ without having the moral motivation for what we ‘ought’ to observe and how to describe it first. We never think of an ‘is’ without being directed by an ‘ought’.
Be suspicious of anyone who claims to have “better” judgement because they are more objective. Objectivity itself is subjective!
Be suspicious of anyone who claims to be ethically neutral and “just a neutral observer”. Ethical neutrality is an oxymoron. In practice those who attempt it are actually taking the radical ethical position to never condemn evil which is the same thing as tacitly accepting it.
What scientists and journalists should be striving for is not ethical neutrality because that is impossible, but rather openness to new information and acceptance of moral complexity and questioning their priors and testing their gut instincts. We puny humans can never know moral truth about any matter with 100% certainty and so we should always have the moral humility to seek the truth when opportunity (costs) permits.
Definitional note: Historians sometimes use a different definition for what they call the positivist fallacy so the ethical neutrality fallacy is a slightly less ambiguous term, but it is even more cumbersome, so I’m sticking with the positivist fallacy.