Economists like to discuss issues with trade-offs. Specifically, if there is a goal in mind economists LOVE to discuss how to reach that goal at the lowest cost.
For some reason, I find many non-economists out there don’t share this enthusiasm, at least implicitly. Just look at what happened when SuperFreakonomics discussed the idea of geoengineering as a solution for global warming. There were two sets of criticisms:
- They misinterpreted facts, which lead to a misleading trade-off.
- They were willing to accept the fact that we’ve made too much carbon and we need to make sacrifices to deal with it!
The first such view is fair, the second just doesn’t make sense to me.
People criticism economics for “ignoring morality”, but to be fair the idea that we should try to achieve outcomes at the lowest cost (which is a value laden, and thereby moral, judgment) is significantly better than the abject moralising that works off the basis that we need to pay proportionally for past benefits.
In a similar vein, with the recent economic crisis there was a push to say “we are now paying for previous extravagance”. This didn’t make sense to me, as we weren’t discussing a transfer between those who spent too little and those who spent to much – we were discussing a situation where the economy was producing far less then it could potentially produce.
Now why do I compare this to the protestant work ethic? Well the protestant work ethic implies that predetermination. Bad things happening are a signal of us “paying for past sins” and so should just be accepted. Instead of trying to understand trade-offs, and make the best choices, this type of attitude leads to fatalistic acceptance of poor outcomes.
Ultimately, I do believe it is valid to state that economists miss a moral dimension when they turn around and make policy conclusions – however, many of those that criticise economists are making even steeper, and in many ways logically incoherent, moral judgments when they talk about us “paying for past exuberance”.