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Positive and Normative
Economists make a distinction between positive and
normative that closely parallels Popper's line of
demarcation, but which is far older. David Hume explained it
well in 1739, and Machiavelli used it two centuries earlier,
in 1515. A positive statement is a statement about
what is and that contains no indication of approval
or disapproval. Notice that a positive statement can be
wrong. "The moon is made of green cheese" is incorrect, but
it is a positive statement because it is a statement about
what exists.
A normative statement expresses a judgment about
whether a situation is desirable or undesirable. "The world
would be a better place if the moon were made of green
cheese" is a normative statement because it expresses a
judgment about what ought to be. Notice that there is
no way of disproving this statement. If you disagree with
it, you have no sure way of convincing someone who believes
the statement that he is wrong.
Economists have found the positive-normative distinction
useful because it helps people with very different views
about what is desirable to communicate with each other.
Libertarians and socialists, Christians and atheists may
have very different ideas about what is desirable. When they
disagree, they can try to learn whether their disagreement
stems from different normative views or from different
positive views. If their disagreement is on normative
grounds, they know that their disagreement lies outside the
realm of economics, so economic theory and evidence will not
bring them together. However, if their disagreement is on
positive grounds, then further discussion, study, and
testing may bring them closer together.
Economists can confine themselves to positive statements,
but few are willing to do so because such confinement limits
what they can say about issues of government policy. Both
positive and normative statements must be combined to make a
policy statement. One must make a judgment about what goals
are desirable (the normative part), and decide on a way of
attaining those goals (the positive part). Economists often
see cases in which people propose courses of action that
will never get them to their intended results. If economists
limit themselves to evaluating whether or not proposed
actions will achieve intended results, they confine
themselves to positive analysis. (You should realize that
although economists can speak with special authority on
positive issues, even the best can be wrong.) However,
virtually all economists prefer a wider role in policy
analysis, and include normative judgments as well. On
normative issues economists cannot speak with special
expertise. Put somewhat differently, addressing most
normative issues ultimately depends on how one answers the
following question: "What is the meaning of life?" One does
not study economics to answer this question.
Most statements are not easily categorized as purely
positive or purely normative. Rather, they are like tips of
an iceberg, with many invisible assumptions hiding below the
surface. Suppose, for example, someone says, "The minimum
wage is a bad law." Behind that simple statement are
assumptions about how to judge whether a law is good or bad
(or normative statements) and also beliefs about what the
actual effects of the minimum wage law are (or positive
statements).
   
Copyright
Robert Schenk
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