Economists’ Odd Stand on the Positive-Normative Distinction: A Behavioral Economics View

19 Pages Posted: 9 Mar 2013

See all articles by John B. Davis

John B. Davis

Marquette University; University of Amsterdam; Tinbergen Institute

Date Written: March 7, 2013

Abstract

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

Davis, John B., Economists’ Odd Stand on the Positive-Normative Distinction: A Behavioral Economics View (March 7, 2013). Available at SSRN: https://ssrn.com/abstract=2230062 or http://dx.doi.org/10.2139/ssrn.2230062

John B. Davis (Contact Author)

Marquette University ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

University of Amsterdam ( email )

Amsterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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