An Appeal From the New to the Old Economists
The Economic Way of Thinking (EWOT) is a very powerful tool. It sheds light on many aspects of human behavior and societal outcomes that otherwise seem obtuse or unusual. It gives us insight into institutional frameworks and behavior that helps shape our understanding of law, politics, markets, and other forms of collective action.
But EWOT is not omnipotence. Economics alone cannot inform us of what institutions should be. Economics can tell us various implications for different property right regimes, or what an effect from this tax or that tax will be. Economics can show us how people exchange in differing institutional settings. But it cannot tell us what those institutions should be.
Those folks to advocate for certain institutional arrangements because “economics says so,” are inherently practicing what Hayek called “scientism,” or the “slavish imitation of method and language of Science.” Economics cannot tell us that free trade should be adopted. It can tell us its benefits, its costs, its likely outcomes, but there is no normative judgment in that. Ultimately, some normative choices are made whenever discussing policy.
What can help us in these normative moments? Moral philosophy. If we are to discuss property rights, we need a concept of just property rights. Why should property rights be private? Economics cannot answer that question, but moral philosophy can. Why should we trade with other nations freely and benefit their workers? Economics cannot answer that question, but moral philosophy can.
To paraphrase Hayek, the man who knows only economics is a positive danger to himself and economics. By making blind appeals to models to justify various policy positions or institutional arrangements is no good. Careful considerations of why these institutions exist in the first place is absolutely necessary. We must remember that we are social scientists, and humans are moral creatures.
Let us follow in our intellectual ancestors’ footsteps: let us study moral philosophy and law and rhetoric and literature and art and jurisprudence. Let us immunize ourselves from the “man of system” mentality. let us not be mere maximizers, mere number-crunchers. Let us be scholars of the grand tapestry of life!