Deals Near, Morals Far?

Unlike most social scientists, economists publish papers whose main conclusions are normative, not just positive. That is, we explicitly recommend policies, rather than just predict the consequences that follow from choices. Moral philosophers are the main other academics who explicitly focus on making recommendations. Compared to philosophers, economists are more standardized and structured, allowing more specific recommendations.

I see two rather different ways to think about what economists do when we recommend policies:

  1. Morals – We enter into a larger conversation about what actions are right. As language let humans enforce social norms, we evolved strong moral feelings and a rich practice of arguing about forbidden and required actions. While for our ancestors such discussion was often a prelude to concrete group action, today we more often argue about morals without such ways to coordinate in mind. Economists mainly join this larger argument about what actions are right, and only incidentally induce specific people to take specific actions.
  2. Deals – Groups of all sizes, from families to planets have conflicts that can be resolved at least in part via deals, both implicit and explicit. Finding and making such deals can be aided by neutral outside advisors, especially advisors who can suggest changes that might benefit all conflicting parties. Economists have a reputation for developing analytical tools useful for making suggestions about parts of deals. Economists mainly develop such suggestions for deal components, and only incidentally join larger conversations about morality.

My closest colleagues seem to mostly take a morals view, but many of my students like a deals view. I think I see a correlation whereby academics who lean toward a sci/tech style tend to favor a deals view, while those who lean toward a humanities style tend to favor a morals view. Sci/tech styles tend more toward math, precision, and local incremental contributions toward specific things and plans, while humanities styles tend more toward bigger pictures, wider-ranging applications, broader interpretations, and joining larger conversations.

In sum, how you think about economic recommendations may depend on whether your thinking leans near or far. It seems deals are near, while morals are far, and sci/tech folks lean near, while humanities folks lean far. Precise formal analysis is more near, while flexible more-metaphorical discussion is more far. Particular suggestions for particular conflicts of particular groups is more near, while general more accessible discussion about what choices tend to be good or bad is more far.

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  • Then there’s a view that knowledge is local, and economics can help more locally than globally. Think for example this problem. The question is in my opinion can the economists make the decisions for them or can they just give some advice which is only part of what makes the good decision. Of course economists can give meaningful and powerful advice on margin.

    I think to some extent this near-far is very situational. If you would go tell the Amish that you should do thing X because of model Y, would they consider your thinking quite far? What if a scientist came to your family and told to do X because of strong positive evidence Y. Who is far? What if your intuitions run against their beliefs? However in minimum wage, macroeconomics or other clear economic issues anything other than established economic theories seem rather far.

    Another way of approaching this is to think if we had economics running all our societies would we end up with all the diversity we have now in terms of different countries or would we have more of the same? If the end result is more of the same can we objectively say that is very desirable? Maybe we just run into some form of Arrow’s theorem here somewhere.

    Think about aesthetics. I think economics is like the music notations and classical musicians. It does capture a lot of knowledge about what makes good music but I think the knowledge how to make good music is still very, very dispersed. It evolves in someone’s garage and spreads out. If you look at the history of art, the innovation and change does not come from the established experts. In fact they’ve been usually against it. Now best art music was probably made in the golden era, but there’re many kinds of music, and they’ve subjective and objective components.

    I think the fundamental difference here is belief accountability and humanities as institution. In many other social science, there’re no strong verification functions. While as in economics, you can start from some strong premises and end up with some rather normative conclusions. Mathematicians can for example check their calculations if they are right. Humanities are not exposed to such evolutionary pressure. There’s in my opinion not same kind of belief accountability that is in more harder sciences.

    Even without any credentials, I agree with the last paragraph. I think many economists are more like engineers with all their pros and cons. Thinking where engineering kind of reductionist thinking fails, is perhaps a way to understand where economics fails. Engineers want to use what works and fix the problem, while as maybe some different scientists want to find the ultimate optimal answers. Now that is only one distinction but its a start.

    But I think it is important to make a distinction between economic recommendations that are strongly attached to values and those who are not. Some tax advice or institutional advice could be very value-neutral.

    Anyway, I like deals, and I kind of commented here.

  • anon

    “Unlike most social scientists, economists publish papers whose main conclusions are normative, not just positive.”

    You restrict your observation to “social science”, but then compare econ to moral philosophy, which is usually not considered a social science. Wouldn’t most applied science be taken to include some kind of “normative” focus, including e.g. engineering and medicine? After all, economists’ normative recommendations, like engineers’, are contingent on terminal values such as efficiency and equity.

  • richard silliker

    Interesting post.

    The correlation apparent to me is one of logicals and spatials. Using scope and extent as parameters for individual intuition the logicals have limited scope and limited extent while the spatials have greater scope and greater extent. It would appear that the differences are one of experiences. However, it is likely to be the way the individuals shape the flow of mass as we sacrifice the whole truth of any given experience for the value to which we are constrained.

    The logicals build a narrative while the spatials paint a picture.

    It is all about the behaviour of mass

    • I’m not familiar with the typology logicals versus spatials. Can you provide a little background or a link? Does this distinction refer to logical versus spatial _ability_ (as in spatio-visual ability), that is Gf versus Gv in the Catell-Horn scheme?

      • DWCrmcm

        Fluid Intelligence (Gf): includes the broad ability to reason, form concepts, and solve problems using unfamiliar information or novel procedures.

        Visual Processing (Gv): is the ability to perceive, analyze, synthesize, and think with visual patterns, including the ability to store and recall visual representations. …”

        This kind of classification is called top down design. We still have no definition of intelligence.
        The problem is that it is very tricky and complicated to make observations about this phenomenon (the mind). Some behavior is is tied to the organic machine that carries the phenomenon. Some behavior is neuromuscular articulation of said machine.
        Some behavior is abstract or meaningful in the machine’s trajectory – like reproduction or eating.

        Where e=mc2
        e is logical
        m is spatial.

  • What cognitive abilities or personality traits correspond to the propensity to use near versus far thinking? Is there any evidence, or do you have any speculations?

    Some inchoate thoughts: focused versus dispersed cognitive ability (; sensation versus intuitive Myer-Briggs style; and low versus high openness to experience (Big Five).

    • DWCrmcm

      dispersed – do you mean distributed?

      We define primitive basically as any given organic life where metabolisms are distributed among more than one life form : an example of a primitive life form is the poorly named echo system, another would be symbiosis.

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