A critical appraisal of the distinction between positive and normative economics

Sina Badiei

Chapter 9 in Handbook of Teaching Philosophy to Economists, 2025, pp 100-115 from Edward Elgar Publishing

Abstract: This chapter examines the distinction between positive and normative economics. It begins with a historical overview showing that economists prior to the ordinal turn, such as Smith, J.S. Mill, and Walras, would have rejected the current version of the distinction. It highlights the substantial contributions of Pareto, Mises, and Robbins in shaping the current distinction and examines the normative and political motivations that inspired them to formulate it. It argues that these influences reveal the inherent value-ladenness of the standard distinction. The chapter then makes a case for rejecting the distinction in its current version by discussing numerous compelling criticisms of it. However, it acknowledges that since values and norms influence economic theories and ideas to varying degrees, not all approaches in economics are equally normative. In conclusion, the chapter offers suggestions on the most promising ways to integrate substantial studies of norms and values into economics.

Keywords: Positive economics; Normative economics; Facts; Values; Subjectivism; Ecological and climate crises (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035336814
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