Values and ideology in economics and other social sciences
from Peter Soderbaum
There is a tendency in mainstream neoclassical economics to claim value-neutrality. Economics is believed to be close to natural sciences where the scholar is standing outside observing what goes on in the economy. It is believed that experiments can meaningfully be carried out to arrive at “evidence-based” results. There is a focus on markets and markets are understood in terms of supply and demand as mechanistic forces. While reference to more than one perspective can add to our understanding, any ideas about value-neutrality have to be abandoned. Values and ideology are always with us as argued by Gunnar Myrdal:
“Valuations are always with us. Disinterested research there has never been and can never be. Prior to answers there must be questions. There can be no view except from a viewpoint. In the questions raised and the viewpoint chosen, valuations are implied.
Our valuations determine our approaches to a problem, the definition of our concepts, the choice of models, the selection of observations, the presentations of our conclusions – the whole pursuit of a study from beginning to end.” (Myrdal, 1978, pp.778-779)
Rather than arguing that “our valuations determine our approaches” I would say that “our valuations influence our approaches” but otherwise I strongly support Myrdal’s arguments about the many more or less conscious choices made by the scholar. Another social scientist, Tanja von Egan-Krieger (2014) who has examined mainstream economics as well as three heterodox schools (institutional economics, feministic economics and ecological economics) refers to “the illusion of value-neutrality” in her book.
Neoclassical economists such as the leading textbook writer, N. Gregory Mankiw sometimes make a distinction between “normative” and “descriptive” statements implying that the latter can be neutral in value terms (2011, p.32). But even descriptive statements are part of some viewpoint or worldview where choices about what to describe have been made. read more
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Real-World Economics Review Blog 
This is my comment on December 5, 2019 at 3:19 am
posted as a comment to Peter Söderbaum’s coment to Grazia Ietto-Gillies’s post
Digitalization and the transnational corporations. Rethinking economics
https://goingdigital2019.weaconferences.net/papers/digitalization-and-the-transnational-corporations-rethinking-economics/
Dear Peter Söderbaum,
As for your question “why do we not cooperate more with departments other than economics?”, I respond with definitive “Yes, we should.” High learning taught in Business Schools has a good chemistry to cooperate with heterodox economics that opposes the assumption of unbounded rationality. As Herbert A. Simon once wrote, “If there is no limit to human rationality, administrative theory would be barren. It would consist of the single precept: Always select that alternative, among those available, which will lead to the most complete achievement of your goals” (Simon 1997[1945] Administrative Behavior, p.322; Ch. 1, p.7). So, it is inevitable that people in Business Schools have more sympathy with heterodox economics than mainstream.
As for your opinion that “one of the strengths of heterodox economics is a willingness to openly discuss ethical and ideological issues”, I respond “Yes and No” in an “amphibious” way. It (the willingness to openly discuss …) may be “one of the strength” of heterodox economics but it can be also weakness or a bad side of heterodox economics. Please read Geoffrey Hodgson’s recent book: In Chapter 1 “Space exists to stop everything happening in Cambridge” Hodgson described in detail what was happening in Cambridge and how ideology misled economists to politics rather than studying economics itself. If economics is to be a science, we should first pay attention to what is happening in the actual economy than how to think how to change it. Without right theory and understanding of what is happening in the economy or how economy works, how can we make a good policy inducement or how can we appeal for better behavior on ethical basis? Ideological orientation is a dangerous sword with two edges. It can be a powerful tool of persuasion but it can also be a sword that injure heterodox economics itself.
I am sorry!. Markup tags did not worked as I have imagined. I reproduce the main part without tags.
Dear Peter Söderbaum,
As for your question “why do we not cooperate more with departments other than economics?”, I respond with definitive “Yes, we should.” High learning taught in Business Schools has a good chemistry to cooperate with heterodox economics that opposes the assumption of unbounded rationality. As Herbert A. Simon once wrote, “If there is no limit to human rationality, administrative theory would be barren. It would consist of the single precept: Always select that alternative, among those available, which will lead to the most complete achievement of your goals” (Simon 1997[1945] Administrative Behavior, p.322; Shiozawa, Morioka and Taniguchi 2019 Microfoundations of Evolutionary Economics, Ch. 1, p.7). So, it is inevitable that people in Business Schools have more sympathy with heterodox economics than mainstream.
As for you opinion that “one of the strengths of heterodox economics is a willingness to openly discuss ethical and ideological issues”, I respond “Yes and No” in an “amphibious” way. It (the willingness to openly discuss …) may be “one of the strength” of heterodox economics but it can be also weakness or a bad side of heterodox economics. Please read Geoffrey Hodgson’s recent book: Is There a Future for Heterodox Economics?
https://www.amazon.com/s?k=is+there+a+future+for+heterodox+economics
In Chapter 1 “Space exists to stop everything happening in Cambridge”, Hodgson described in detail what was happening in Cambridge and how ideology misled economists to politics rather than studying economics itself. If economics is to be a science, we should first pay attention to what is happening in the actual economy than how to think how to change it. Without right theory and understanding of what is happening in the economy or how economy works, how can we make a good policy inducement or how can we appeal for better behavior on ethical basis? Ideological orientation is a dangerous sword with two edges. It can be a powerful tool of persuasion but it can also be a sword that injure heterodox economics itself.
Thanks for the quotation from Myrdal. The fact-value dichotomy came up for me recently at my macro-policy blog. Fellow Modern Monetary Theory advocate (and MMT founding scholar) Bill Mitchell has been claiming that one can get a range of macro policy platforms from MMT by adding political values to the truth claims of MMT. While I have been writing in defense of MMT, I do not fully agree with this MMT+values formulation– for more than one reason having to do with philosophy and the point made by Myrdal.
Using the term underdetermination to refer to the idea that the facts underdetermine theory choice, Philosopher Liz Anderson writes in the abstract of a paper on this topic that:
“The underdetermination argument establishes that scientists may use political values to guide inquiry, without providing criteria for distinguishing legitimate from illegitimate guidance. This paper supplies such criteria. Analysis of the confused arguments against value-laden science reveals the fundamental criterion of illegitimate guidance: when value judgments operate to drive inquiry to a predetermined conclusion. A case study of feminist research on divorce reveals numerous legitimate ways that values can guide science without violating this standard. ”
Elizabeth Anderson, “Uses of Value Judgments in Science: A General Argument, with Lessons from a Case Study of Feminist Research on Divorce.” Hypatia, Winter 2004.
Here is a link to my post on the possible lessons of Anderson’s article for the policy questions being wrestled with by MMTers, which contains a link to Anderson’s article,
https://greghannsgen.org/2019/10/04/new-article-by-feminist-macarthur-fellow-points-way-for-values-and-facts-in-macro-policy-debates
I am a bit puzzled by some of Anderson’s points. An empiricist belief in the importance of separating “is” from “ought” does not preclude one from studying things like income distribution. The income distribution is a fact which can be studied and described. People with radically different views about its ethical acceptability can still agree on what it is. They have to share terms and definitions but discussions among people with different views is how we become aware of our own preconceptions and, with luck, such discussion leads to an adequately neutral language of description.
One observer might say wages are low in country X because of capitalist exploitation; another that wages are low in X because labour productivity is low. Nonetheless there should be a set of statements about the money value of wages, its relation to the value of output and the share of profits on which they must agree.
What questions to ask is, of course, directed by values. But there should be a factual element in the answers that is not value-determined. In deciding what to do about it we are guided both by our values and by our theory as to how the system works. Again people incline to one theory or another for reasons that reflect their values. But if we can agree on facts there is always the possibility that the facts will adjudicate between theories, though they rarely do so quickly and decisively.
What gets me is that it is only a theory of how to do science that says one should separate facts and values. My theory says that if you are going to separate them for analytical convenience, one needs to put them together again before using them. A bit like taking logarithms; one mustn’t forget to take the anti-logarithms or (as happens with interest rates and percentage markups) you find you are multiplying when others think you are adding. (Those on the receiving end tend to keep very quiet about that, of course).
ghholtham >>
What questions to ask is, of course, directed by values. But there should be a factual element in the answers that is not value-determined.
This is a very good formula. IN studying economy, we should not forget how the economic system works. Without good knowledge of this side (fact side instead of value side), it risks that we make a grotesque fantasy like central planning. This is very important, because economy (national or international) is always a complex system and is an entity difficult to understand.
ghholtham: I think Anderson would agree with you that facts are often like that: They can in her view too often be determined in a way that does not presuppose value commitments that are controversial within the scientific community. That would to a great extent be true in the case of your example of income distribution data. Anderson’s argument addresses not facts but theory choice. That is, values become hard to separate out from the process once we are trying to decide which _theory_ is right or to come up with a good _theory_. I hope this clarification can help Anderson’s argument seem reasonable to you and others in this forum.
One approximate from a Phil of Social Sciences seminar in the mid-1980s that may shed light on the thrust of Anderson’s work on epistemology in science: “My point of view on methodology is not empiricist, but it is empirical.” Hence, she opposes a fact-value dichotomy but sees an important role for facts and other forms of empirical input.
The distinctions between facts and values is one of the things people make-up as part of creating things like economies. These creations are partly based in existing institutions (e.g., religion, family, military, etc.) and partly new constructions for the economy (e.g., money, banking, trading, etc.). As with all human creations, they’re messy; complex. Facts often emerge from a value or values. For example, workers don’t get more pay for their work because they are not as productive as they need to be. This is a value-laden statement but is treated as fact by many economists, laypersons and even labor unions. The fact that there is economic inequality in America is clearly value-based since inequality can exist only when it is judged that two or more economic actors are treated unfairly in terms of income and/or wealth. What’s a fact and what’s a value is dependent on context. On the situation in which that judgment is made. Particularly, the actors involved and the relations between them in such factors as power and status. In short, facts and values are not inherent categories of the universe. They are made-up by people to make sense of things and events in the work of building cultures. Facts and values are useful for people. Otherwise they would not create them.