Economists’ Odd Stand on the Positive-Normative Distinction: A Behavioral Economics View
19 Pages Posted: 9 Mar 2013
Date Written: March 7, 2013
This paper examines economists’ indefensible attachment to the positive-normative distinction, and suggests a behavioral economics explanation of their behavior on the subject. It reviews the origins of the distinction in Hume’s guillotine and logical positivism, and shows how they form the basis for Robbins’ understanding of value neutrality. It connects philosophers’ rejection of logical positivism to their rejection of the positive-normative distinction, explains and modifies Putnam’s view of fact-value entanglement, and identifies four main ethical value judgments that contemporary economists employ. The behavioral explanation of economists’ denial of these value judgments emphasizes loss aversion and economists’ social identity as economists.
Keywords: value neutrality, Robbins, Putnam, fact-value entanglement, loss aversion
JEL Classification: A13, B41, D03
Suggested Citation: Suggested Citation