I am saving the meat of this for a Sunday “religious” post, because it will get into theological issues. But to give the background, I met a guy for lunch the other day who is working on a video series to teach basic economics from a Christian perspective.
The guy was asking me about the claim that economics was “value-free.” I explained what this meant in the Misesian system.
The guy challenged me and said he didn’t think economics was value-free, or that it could be. I won’t go into it now–saving it for a Sunday–but I felt very squeamish in giving the guy my pat answer. In other words, I went through the motions of explaining “wertfrei” in standard Austrian economics, but I hardly believed it myself.
(I also told the guy the ominous–but totally true–anecdote that when I was filling out my exit survey at NYU, the 3-digit department code for Economics was 666.)
Early in my graduate career, I wanted to be an economic theorist. My advisor at the time told me I should give a copy of the paper I was working on to Peter Diamond for comments. I was terrified, but I did it. It was a paper on crime, and a key assumption one always has to make in theory papers about crime is whether one wants to include the utility the criminal gets from committing the crime when adding up social welfare. Early in the paper, I noted that I would not be including the criminal’s utility in the social welfare calculation. Diamond highlighted that sentence, wrote that he thought I should include the criminal’s utility, and read no further in the paper. When I met with him, he simply said there was no point in reading any more once a bad assumption has been made. That’s not the way I think of the world, so that simple offhand comment he made twenty years ago has always stuck with me.
BTW, even though I know this is an exercise in futility, let me assure that I UNDERSTAND WHY DIAMOND SAID THAT. That’s the point, though: Economic science forbids you from assuming that the joy from crime shouldn’t be included in something called “social welfare,” a quantity which everyone assumes should then be maximized. And then we tell ourselves there are no value judgments being smuggled in.