What a cow wants, what the economy needs
Posted October 2, 2007on:
It seems that some fine researchers in Waikato are trying to discover sets of preferences among cows. Good. I’m sure that individual cows do have a set of preferences over outcomes. However, the researchers better be careful that they don’t try to compare the value of different cows preferences, or take one cows (or a small subset of cows) set of preferences and assume that it holds over all cattle. These are mistakes that economists have made throughout time.
Economists are experts at positive judgements. Distilling the ‘facts’ and providing a framework with which to place issues of scarcity. If you want a normative judgement, such as what is the welfare function for cows, or how do we weight the importance of different cows feelings, then you have to find an expert in the field. In the case of cows, I think the appropriate expert would be a farmer. After all, who knows the nuances of a set of cows better than the farmer who raises them!
If only finding the appropriate experts was as obvious for questions about the national economy. Economists often settle for policy analysts or even themselves to provide the normative judgements around policy decisions. However, do economists and policy analysts get up at 4am most mornings to go visit the national economy? Do they spend precious time alone with the national economy, so they can really get to know it? Can policy analysts and economists identify the subtle nuisances that exist between the different individuals in the national economy?
Ultimately, if an economist wants to add apply normative judgements after setting up a given issue in the frame of scarcity, they must make sure they go out into the open air, and discover how their precious economic agents (people) are feeling. Only then can they attempt to claim that they know what the economy needs.