The claim that economics is value free is a common one, and one of the many things Mankiw asserts in defence of his classes. I thought a good way to demonstrate that economics is not value free would be to highlight how many of his 10 principles are actually value-ridden. The 10 principles have been poked fun at elsewhere, and rightly so – they are simply a series of assertions about the nature of the economy. Real science sometimes starts with assertions, but the crucial difference is that those assertions are not contradicted by empirical evidence, anywhere, ever.
However, I digress. Here are the 10 principles – I have highlighted and discussed the values I deem to be implicit or explicit (please note that I do not necessarily disagree with these values; I’m merely showing they exist):
#1 People face tradeoffs, #2 The cost of something is what you give up to get it, #3 Rational people think at the margin, #4 People respond to incentives
These are all reflective of a view of how people value decisions; that they make decisions based on costs and benefits. In reality, people respond to incentives based on a number of other criteria, such as the motives of the person rewarding or punishing them. These motives or ‘values’ are swept under the rug in economics, in favour of a mostly monetary/self interested view of human behaviour, where people value things based on outcomes.
#5 Trade can make everyone better off
The sentence itself is clearly a value judgement – trade increases value, so it is good for it to take place. Related is the ‘trade must be mutually beneficial otherwise people wouldn’t do it’ line of thinking, which effectively asserts that ‘market’ transactions are always beneficial. Whether this is true or not is up for debate, but it is certainly loaded with value judgements about what is desirable.
#6 Markets are usually a good way to organize economic activity & #7 Governments can sometimes improve market outcomes
‘Markets’ in this case meaning private property and contracts, and some hidden regulations like limited liability laws, with no thought as to the social relations and institutions required to sustain them, and no thought as to the historical context of those institutions. The government is somehow separate from these institutions, which we take as a given. That we choose not to judge these institutions based on their values is in and of itself a value judgement that they are desirable or natural.
#8 A country’s standard of living depends on its ability to produce goods and services
This equates material abundance with standard of living, and effectively amounts to a judgement that growth will always increase happiness*:
You may say I’m putting words in his mouth a bit here, as he is talking about objective standard of living. But what is objective standard of living? If people aren’t happier then does telling them that their stuff is shinier change that? This is exactly the kind of thing that instils an implicit value judgement in economists, leading them to assert that people should be happier with their lot despite stagnating median incomes, and that we should measure income as consumption. Consumption is higher, and our models say that should make you happier, so stop complaining!
#9 Prices Rise When the Government Prints Too Much Money & #10 Society Faces a Short-Run Tradeoff Between Inflation and Unemployment
Implicit here is that both inflation and unemployment are bad past a certain point, and in different situations one is desirable whilst the other is not. Again, a value judgement.
Economics is a study of how people behave and so by definition cannot be value free – it must contain judgements about people’s actions and the motivations for those actions, as well as judgements about what is or isn’t desirable for them. As Rod Hill and Tony Myatt highlight here and here, your average textbook is full of value judgements. This is inevitable, and would be fine if they were explicit. But the fact that academic economists continue to deny it is just another indictment of their discipline.