Economics sets out to describe the economic aspects of the real world. That is, economic theory is supposed to provide a coherent, usable and more or less complete package of conceptual tools for analyzing, understanding, explaining, and especially for improving the world in which we live – well, the economic aspects at least.
Does it succeed? Personally, I think there is room for improvement. Economic theory could be significantly more user friendly, and thereby more useful. Part of the reason for this current situation is a traditional distinction within the profession between so-called positive and normative economics. At the very beginning of his or her studies, the would-be economist is trained to make a sharp distinction between what “is’ and what he or she or others may think what “ought to be”. Statements about what “is” can be tested empirically, and their rightness or wrongness can be objectively determined. They are “positive” statements. On the other hand, statements about what “ought to be” are by their nature not empirically verifiable; they are value judgments; they are normative. The “science” part of economics, therefore, is taken to lie in the positive domain, since only what can be empirically verified (or unambiguously refuted) can be “true”. Thus, only positive economics is really “scientific”.
I think this distinction has been overplayed, to the detriment of both the profession and its potential users. Verification through quantification is not the only path to truth, nor are personal judgments beyond improvement through honest discussion, nor are intrinsic values inappropriate for collective analysis. In short, the economic tool kit will be both more relevant and more useable if normative analysis is also added in.
Hence this blog site. In a more or less logical manner I will offer views on several distinct but still related aspects of contemporary economics. First is a series of “corrections”, or nuancing of positive economic principles, with a view to enhancing and enriching their real world applicability. The second are some normative economic principles needed, I think, to complement the arsenal of currently available concepts and tools of positive economics.
Warning: this is not a site for the profession, although other economists are most certainly welcome. This site might be called, with a tip of the hat to George Bernard Shaw, “the intelligent person’s guide to useful economics”. The focus is utility; the target is the non-professional; the standard is, albeit often abstract, sensibleness and relevance and practicabillity. Good economics should be useful to ordinary people making real decisions.