Positive Economics, Welfare Economics, and Political Economy
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Abstract
EcoNoMIC theory, as we know it, was developed largely by utilitarians. Admitting the measurability and interpersonal comparability of utility and accepting the maximization of utility as an ethically desirable social goal, neoclassical economists were able to combine an instinctively human zeal for social reform with subjectively satisfactory scientific integrity. The positivist revolution has sharply disturbed this scholarly equilibrium. If utility is neither cardinally measurable nor comparable among persons, the economist who seeks to remain "pure" must proceed with caution in discussing social policy. The "positive" economist becomes an inventor of testable hypotheses, and his professional place in policy formation bec'omes wholly indirect. Milton Friedman has provided the clearest statement of the positivist position,' and he has called for a distinct separation between the scientific and the non-scientific behavior of individuals calling themselves economists. But economics, as a discipline, will probably continue to attract precisely those scholars who desire to assist in policy formation and to do so professionally. The social role of the economist remains that of securing more intelligent legislation, and the incremental additions to the state of knowledge which "positive" economics may make seems to shut off too large an area of discussion from his professional competence. Does there exist a role for the political economist as such? This essay will examine this question and suggest an