Is economics vulgar?

The people at no right turn are unhappy with our discussion on torture as an alternative to imprisonment. That’s fine; however the last sentence of their post interested me:

“As for “moral biases”, economics would do well to remove the beam from its own eye, and recognise that it is in fact a rather vulgur monetarist implementation of utilitarianism and hence loaded with moral preconceptions (some quite questionable), rather than the morally-neutral, unbiased science they like to paint it as.” (emphasis added)

I am especially interested in the fact that Idiot/Savant said economics was “loaded with moral preconceptions”. The view of economics as money hungry right wing sociopaths is fairly common, and as a result there must be some reason why people think of economists in this way.

Before covering this, I want to say what I think economics is. Economics is the study of choice. Now there is a descriptive side to this (what is the situation) and a prescriptive side (what choice must be made). The descriptive side is positive, ‘fact’ based, while the prescriptive side is normative, so value laden. A good economist should separate out the descriptive and prescriptive parts of their argument. Ultimately, all economists should agree with the descriptive side of an economist’s statement, but they can disagree about the prescriptive side, as value judgements are different between people. Note: You cannot usually make a choice without value judgements, and even inside economics there is great debate about what constitutes an objective fact. The point is that a good economist will separate these factors out..

There are economists out there who bastardise this process, and will act as if their value judgements are objective facts. This is the case where we get “loaded moral preconceptions” from economists.

What I think irritates people is that people think economists apply values to things. However, if an economist gives something a certain monetary value, this is a value judgement, and can be attacked on that basis. An economist will first try to figure things out without resorting to value judgement, eg if an action makes everyone better off, then that action is objectively better than doing nothing. The ultimate goal at this stage is to model the situation without attaching value to any components.

Once this process is done the economist may want to make a prescriptive statement, this involves implementing some value judgements. While some people say it does make sense to attach values to things, we have to realise that when economists give a monetary value to something it is just as a means ordering the possible choices available (Note that this order is determined by some value judgement). You might say that a value cannot be attached to murder, but you simply have to look at an appropriate set of choices. Eg would you rather be murdered or have your fingers cut off.

James’s post was very good in this regard. He put down the appropriate considerations, and asked whether the way society views them is appropriate, he did not apply any value judgements. He was asking us to reveal our own value judgements to do with the punishment of criminals, to see what choice we would make.

Note:  I do want to have a free and frank discussion about economics applied to social issues, but can we please use a different issue than child abuse and rape.  We can cover the same emotive issues without delving into issues like this directly.

10 replies
  1. Kimble
    Kimble says:

    In the previous thread the topic of child rape was raised. This reminds me of a hypothetical situation that caused the break-up of one of my study groups in University. (Seriously, why do people go to University if they dont want to be intellectually exercised?)

    Imagine if pedophilia (sp.??) was found to be genetic. No environmental causes, it could only be passed on to the next generation via procreation, and the gene is undetectable. Further assume that given a choice all pedophiles would choose to have sex with children rather than adults.

    Would it be better to decriminalise this behaviour and suffer a couple of generations of child abuse to rid the world of these genes once and for all? If they only have sex with children they will not procreate so their genetic line dies.

    Think about the negative experience of a few generations versus the avoidance of negative experiences for the next thousand generations.

    This question was just posed to get people thinking about something they had never even considered before. But you can imagine the reactions I got.

  2. Matt Nolan
    Matt Nolan says:

    Hi Kimble,

    Even in this hypothetical case, I don’t think that child abuse should be legalised.

    Firstly, the gene might skip generations and so might take a lot longer to die out.

    Secondly, if we make this sort of action sufficiently costly, we can hopefully remove (or at least minimise) cases of child abuse. I would rather have limited abuse in the future, than excessive abuse now. After all, demand for this sort of activity might be highly price elastic (where cost from being punished provides a shadow price)

    Ultimately, your example depends on the distribution of genes throughout the population. If the population died out quickly, and demand was not too elastic in cost, then your argument makes sense. We agree that pedophilia is wrong, that the externality from this consumption decision is always greater than the value associated with consumption, and as a result the activity should be minimised. However, given some different beliefs on the structure of the game being played we disagree about the method of minimising the amount of this sort of activity that occurs.

    Finally, I do want to have a free and frank discussion about economics applied to social issues, but can we please use a different issue than child abuse and rape. I know that you didn’t bring it up originally Kimble, I would just rather steer away from issues that are too emotionally loaded on my posts.

  3. Matt Nolan
    Matt Nolan says:

    By the way I thought that your comment was excellent Kimble, it illustrated that you understood the type of issues we are discussing. The only reason I’ve asked us all to stop talking about child abuse is to prevent this thread turning into some sort of hate filled thread on child abuse, when that is not the issue behind it.

    I’ve seen the way some other threads have deteriorated when people come in with their eyes shut and their hearts full of hate.

  4. Kimble
    Kimble says:

    Fair enough, the last you want is another blog ruined by sonic and dad4justice 🙂

    The problem that you will face when trying to have this sort of discussion is that it WILL steer towards the ‘shocking’. That is part of what makes it interesting.

  5. satsumasalad
    satsumasalad says:

    ooohh oooh, read me, read me!!

    I just entered a whole load of stuff responding to Kimble’s scenario, then didn’t submit it as Matt requested we don’t go on and on and on with that particular issue, and I can’t think of another. But how’s this for a twist on the theme?

    about whether the art of known paedophiles can be celebrated, knowing its origins.

    Can someone put that into economic terms please (Econ 101/201 over here, remember)

  6. Matt Nolan
    Matt Nolan says:

    Sorry to have been such a pain, I agree with you Kimble, and if the post was specifically on an issue (such as child abuse) we could whip out all the unitarian arguments we wanted. I just wanted make sure that the direction of this particular post didn’t shift from analysing what economics is to arguing about why child abuse is wrong (as seemed to happen on the other post).

    Hi satsumasalad. Whether we should accept art that was originally made by a pedophile requires some sort of value judgement. We know that without knowledge that the creator was a pedophile we valued his art positively, so with no additional information its consumption is fine.

    Now there is no negative externality from consuming his art once he is in jail or dead (as he is unable to use the funds to facilitate further pedophilia), however this knowledge may change the individuals value of the art, making it unpalatable for them to consume. This is just a shift in the demand curve.

    However, if you discover the artist is a pedophile and continue to consume the goods they produce, and the consumption of those goods makes it easier for them to prey on children, then your consumption decision has a negative externality and should be appropriately taxed.

    Now if you already own some of the guys art, only the first effect matters, as the money you spent buying it is already sunk. As a result, if the knowledge that the man was a pedophile does not influence your value of some of the persons artwork that you already own, then you can continue celebrating it. However, the result relies on the how this knowledge influences the value you place on the. After all, art involves emotion, and new information on the artist influences the satisfaction you gain from a piece of art.

  7. satsumasalad
    satsumasalad says:

    Very good, thank you. Extending this, if you own a piece of the paed’s art, and then discover his/her proclivities, and decide you no longer enjoy the art and want to get rid of it, should you sell it (recouping some of your investment, possibly profiting) or give it away (knowingly inflicting the paed’s influence on another, after all, it’s had an effect on you, can you do that to someone else) or destroy it (denying people who don’t share your values the chance to enjoy it)? Again, your values will decide you.

    The article was interesting in that it looked at whether some innocent-looking music lesson books can now be used for teaching now that we know they were written by a paedophile. He wrote them to have a pretext to be around children. I wouldn’t be buying them or using them for that purpose, I’d be buying them because my (theoretical) daughter wants to learn the recorder. Somehow my gut tells me not to to demonstrate support for him by buying his books, even if he or his estate don’t financially benefit any more. The proceeds probably go to the publishing house. Nevertheless, my demand for that particular product is adjusted.

    So would the invisible hand render demand for these products (art, teaching books) down to zero, where no-one would want them at any price if they had full information? I guess, just before reaching that point, they’d start to gain curiosity value, so they might actually become prized again.

  8. Kimble
    Kimble says:

    Is there an economic explanation for a feeling of “guilt by association”? That is partly what is going on here. Even though, rationally, the use of the book does not further hurt anyone, there is still an aversion to be around such a thing.

  9. Matt Nolan
    Matt Nolan says:

    Ultimately, when we determine price or the value someone associates with a product we are making a value judgement. The objective part of economics does not tell us where to go, all it tells us is that if there is a positive price then some people must positively value the good.

    Whether you destroy the art or keep it depends on the payoff from the two different action. While you get to buy some goods if you sell it, you may gain some satisfaction from destroying it if you feel the artwork signifies something you detest.

    I don’t expect that demand for the good will go to zero, I am sure there are people out there who become more fascinated with pieces of art work when they discover something deviant about the creator. Ultimately it depends on peoples values, which relies on some type of value judgement.

    Guilt by association is one way that someone may attach value to a product, definitely. While such guilt may seem irrational at first glance, it may be perfectly rational if placed in the frame of bounded rationality, and norm building.

    In this case the argument may be: It is not optimal for people not to buy products off pedophiles, as it helps fund their lifestyle. In order to prevent people doing this, some social code is formed that reduces peoples value from products created by pedophiles. However, this social code holds no matter whether the person we are trying to punish is affected by the decision or not.

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