What is Finding Welfare?

My last post suggested that we survey economists to choose between three descriptions of what they are doing when they make policy recommendations:

  1. Morals – Entering into larger conversations on what actions are right and moral.
  2. Deals – Helping groups find mutually-beneficial deals, by suggesting deal parts.
  3. Showing Off – Doing hard things like analysis, so we can be credentialed as impressive.

Bryan agrees that #2 would be more popular, but suggests adding two more options (slightly reworded by me):

  1. Social Welfare – Identifying policies that are best for society as a whole.
  2. Partisanship – Identifying ways to advance political goals we identify with.

I agree with Bryan that #4 would now be more popular, but are these new options different concepts, or phrases popular in part because of their vagueness? The three options I presented seem more clearly conceptually distinct. Do economists seek “best” policies to help people argue about which actions are moral, to help encourage political and other group deals that include these better policies, or to show off their abilities to do clever analysis? My proposed three part question seems to me better suited for digging to this deeper level.

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  • david

    #4 assumes a conceptual social welfare function that goes well above and beyond #2. You can justify additional taxation and redistribution based on #4, for one thing, or conversely justify renouncing existing claims by recipients of transfers.

    You can argue that this is “really” #1 but clearly economists conceive of it differently from making normative claims (even if they are, stealthily, making normative claims!). Merely suggesting Pareto improvements is too “thin” for what economists regularly engage in, but calling it a social-welfare function both gives (1) it a veneer of neutrality to outsiders, and (2) allows interesting academic debate to occur between insiders without getting continually bogged down in fights over fundamentals.

    Remember James Buchanan’s unwittingly revealing “camp-following whores” outburst during the Card-Krueger debates – bluntly, the sociologists are right when they remark that economists like to smuggle class and political assumptions into the math – selections over what deserves to stay or go given tractability constraints are not really neutral – even if they are wrong about how solid the math nevertheless is.

    We say we are merely only balancing the possibility frontier of social desires that Leviathan demands of us – and we are, I like to think, not entirely whores in the Buchanan sense – but we do undeniably put a thumb on the scales.

  • http://aretae.blogspot.com aretae

    But #4 ALSO provides better cover for what they are doing. Clarity is the enemy of hypocricy, and we all agree that a big part of what people are trying to do is to maintain room for hypocricy.

  • Mark M

    #4 and #5 seem to be sub-categories of #1.

    That might be interesting and/or useful information to collect, but social welfare and “political goals you identify with” are still forms of morality. I’m sure there are many sub-categories for each of these.

    I’d think about going a different route with all the categories:
    (1) Practical (Deal-making, problem solving – intended to recommend a specific course of action. Includes actions a business might take in response to changing economic conditions, such as more or less advertising, investment portfolio mix, etc.).
    (2) Ideological (social welfare, religion, political, etc. – forecast of how current, predicted, or proposed scenarios impact a given ideological area – may or may not result in recommendations)
    (3) Academic (long-term forecasting, showing off, etc. – not intended to recommend a specific course of action).

    Not sure if “academic” and “ideological” are the right terms.

  • rapscallion

    If the relevant parties reject your deal, by definition it was a bad deal.

    • Mark M

      Relevant parties may simply be stupid. Or insane. That doesn’t mean the deal was bad. It could mean that relevant parties are bad decision makers.

      • rapscallion

        I think Hanson would resist the idea that Dealism requires paternalistic or technocratic rationales, but I agree it does. The problem is that I don’t think there’s really any sound classical economic theory that supports Dealism if it’s understood as implying that Pareto-enhancing moves require an economist’s recommendation.

      • Mark M

        rapscallion -

        I recognize that you are using the English language, but find myself unable to understand any part of it. I’ve concluded that your mind has wandered into a specialized context, familiar to you and probably others, but not to me.

        As such I neither agree nor disagree with anything you may or may not have indirectly implied or explicitly stated, especially if your post is in any way related to any post of mine.