First of all, it’s an approach, not an end per se, an approach to understanding human behaviors, particularly the consequences of our very individual choices. 

The economic way of thinking assumes some positive statements (humans act rationally—i.e., they respond to incentives; actions have trade offs because goods are scarce; prices reflect scarcity) but it can also suggest some normative statements. This “is vs. ought” distinction is supposedly clear, and economists typically say that they should stick to the “is.” Others suggest that injecting value statements is inevitable.

After all, prices don’t always reflect scarcity, because governments meddle with them. Perhaps they shouldn’t meddle? But that’s an opinion. Maybe if we say “if prices don’t reflect scarcity, a misallocation of resources results,” we’re still being objective? An altered price which does not reflect an individual’s subjective preferences simply moves goods into “less valued” uses. But–heaven forbid–we’re not saying that is “bad!”

But doesn’t a “less valued” place imply a “wrong place?” 

No, they might respond. Though economics is about subjective individual values, it should not (insert irony here…) be subjective.

Of course, the idea of subjective value is at the core of modern economic theory. We vote all the time with our dollars, usually giving up more of them for an NBA game than an impromptu Quidditch tournament. But to say a person values an NBA game more than seeing Harry Potter’s chasers, keepers, beaters, and broomsticks on a green field doesn’t say that the NBA game is “better.” It’s just more valued.

Economists assert that, based on the laws of supply and demand, when governments place a cap on gasoline prices of $1/gallon, the amount supplied drops, the amount demanded rises, causing shortages and different forms of rationing: wealthy people buy their own gas stations, and rationing criteria changes (first come-first serve, using personal connections or indulging one’s personal biases). But that isn’t “bad.”

This avoidance of subjectivity is partly a result of a noble desire to make economics more scientific, but doesn’t science (think cloning or AI) bump into similar subjective quandaries? 

When economics is taught, it’s a bit unnatural to pretend we’re strictly objective. Let’s be honest, laying out our hidden, and not so hidden, assumptions and conclusions.

Such as?

1—Human choice is more than inevitable, it’s good; more choices nearly always beat out less choices (though one appeal of Trader Joe’s is that it offers fewer choices than a typical supermarket, and therefore people choose to shop there). When we voluntarily restrict choices (you say, “Please put those luscious salted cashews away!”), the goal is usually to enhance our choices (you think, “I’d like to be able to fit into those size 10 pants again!”). An alcoholic joins AA, restricting some choices to enhance other choices, because more choices are better.

Okay, that’s pretty easy. How about this?

2—Human flourishing, or prosperity, broadly defined, is good. After all, it gives us more choices, and we prefer abundance to poverty, health to illness, and, don’t forget, two bathrooms to one.

That’s still pretty self evident, hardly worthy of labeling “subjective.”

Let’s get more specific: 

3—Public policies ought to take into account the “least of these,” the poor and marginalized.

4—Policies ought not to place the good of the small (me; my city; my socio-economic class or my occupation, or the short run); over the large (my state; my country, the world, or the long run), particularly if it involves a zero sum situation. Taxing Mississippians for my ethanol subsidies is not only socially inefficient; it’s wrong.

5—Speaking the truth is noble; we should let prices tell the truth. 

Now we’re talking, with two “oughts” and one “should.” Numbers three through five are galloping into normative land. If I am right, economics shouldn’t shy away from judgments that flow from their objective analysis encountering their personal values. 

A military draft, for example, diminishes human choice and probably human flourishing, underpays poor conscripts, and lies about the cost of our defense. Ethanol subsidies reduce options for fuel, make those of us who don’t own farmland poorer, hurt poor people, place the interests of farmers above consumers, and tell us lies about the scarcity of ethanol and corn. 

I wouldn’t call economics “a religion ridden with value-judgments,” as one theoretical physicist suggests. Neither would I turn it into a tool for polemical diatribes advocating individual policy proposals. But humans have values, which color our choices in all sorts of ways. And, to be upfront, stating one’s biases—in my case, caring about the truth, the general welfare, and the poor—is at least upfront. 

Economics portrays itself as a science, of sorts, about subjective human choices. Whether economics is a science at all—a social science, an empirical science, or just voodoo pseudo science, it behooves us to remember Hayek’s famous quote: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Though the government’s economic forecasting is awful, economists’ forecasts are only marginally better. Still, that doesn’t stop economists from predicting. Given our lack of knowledge, we should remind anyone listening to predictions that even if something is inevitable isn’t necessarily imminent.

Of course, economists often pair their predictions with their opinions on a host of issues outside of their classrooms and sometimes outside of their expertise, even if they proclaim their objectivity inside their economics classes. Human behavior’s fickleness renders objective pronouncements rather iffy. Even if our actions were all rationally predictable, our analysis of problems and suggestions for reforms reflect not only our limitations; they reflect our values.