Opinion

Emanuel Derman

PPE morphs to PNE

By Emanuel Derman
August 30, 2011

The internecine arguments by economists in the daily papers show that a good part of economics is about

  • what is good; and
  • how to achieve it,

i.e. about philosophy and politics.  In British universities a major in Economics used to be part of PPE – the triple concentration in Politics, Philosophy and Economics. Puts economics with the traditional moral “sciences” of values.

The emerging paradigm in academic economics is PNE – Psychology, Neuroscience and Economics. Puts economics with the traditional value-free sciences.

But, if economics is about what’s good and how to get it, it can’t be value-free. Hence …

Comments
6 comments so far | RSS Comments RSS

So you’d suggest PPPNE? personally I’d drop the N, but that’s not really the issue.

There is a (small) strand of research looking at the philosophy, ethics and normative aspects of behavioural economics – some of Bob Sugden’s work for example is in this area. But there is definitely a niche waiting to be filled here. When we build a sufficiently detailed descriptive model of how psychological factors lead to apparent preferences, and then to choices, there is the possibility that normative questions get squeezed out. I am not sure exactly at what level to reintroduce them, but it is worth exploring.

Posted by LeighCaldwell | Report as abusive
 

Maybe Economics is just growing up. From the young age full of ideals and good intentions, when it’s possible and actually moral mandatory, to define what is good; to a more grown up, cynical and maybe fatalistic stage, when all the different outcomes are just a flat landscape in moral terms.

Posted by RedItalian | Report as abusive
 

RE RedItalian: The point I wanted to make was that though academic economics looks like science3, the passionate economic arguments in the daily papers are actually about philosophy and politics, not about science.

Posted by EmanuelDerman | Report as abusive
 

Maybe because when they speak to the daily papers, economists like to preach instead of teach. That also allows to be pretty vague, which is always good for the future track records…..

Posted by RedItalian | Report as abusive
 

Hence what?

Posted by stat_arb | Report as abusive
 

So I still don’t totally get the point of your observation, but I did think of one implication to political arguments about tax policy:

No tax regime, whether flat-tax, progressive, VAT, …. is value-neutral. Although certain believers in markets might consider “the least invasive” tax policy, or “the most market-neutral” tax policy to be value-neutral, it is still in fact social engineering. That’s a four-letter word so people shy away from it. But as economists have argued when discussing the value of a human life, “doing nothing” is doing something. Just so, letting “the market” mete out $ is just as much a social-justice programme as wealth-redistribution.

Posted by stat_arb | Report as abusive
 

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