What is the proper approach and place for normative statements on Economics SE?

Question

Note- This question is an extension from a discussion in the comments of this answer. Thanks to @denesp for the recommendation for this meta question, and @AlecosPapadopoulos for the cited answer above and a thoughtful reply!

Ultimately, I guess my question for the broader community is: what is the proper place for, and usage of, normative claims in an answer and/or question? I agree that normative statements should be minimized and positive statements should take overwhelming priority wherever possible, but does that mean there is no place for normative judgments/statements on Economics SE?

The main field where I see this issue coming to a head is in Social Choice. I'm concerned that a blanket ban on any normative evaluation severely undermines our ability to engage in some of the most well-published and historically interesting areas of social choice theory. Several of the most cited and well-regarded papers in that field incorporate ethics and value judgments, and therefore would themselves be considered "off topic" if they were discussed on the forum (assuming these judgments are banned, that is).

As a point of emphasis, some examples of this reality are:

Utilitarianism and Its Critiques

Harsanyi's 1955 work that is one of the early economic outlines of Utilitarianism proposes "to examine the precise ethical meaning of Fleming's crucial postulate" and examines it's "acceptab[ility] according to common ethical standards."

Diamond's 1967 critique of Utilitarianism also motivates itself largely on normative and ethical grounds, as he states "I wish to argue that one [of Harsanyi's axioms] is not consistent with notions of justice held by some individuals. Since this is an ethical discussion, the argument will take the form of an example which suggests the problem inherent in the axiom..."

Classical Texts in Bargaining Theory:

John Nash's 1950 paper on bargaining which justifies his solution primarily on normative grounds, suggesting "It is the purpose of this paper to give a theoretical discussion of this problem and to obtain a definite 'solution'- making, of course, certain idealizations in order to do so. A 'solution' here means a determination of the amount of satisfaction each individual should expect to get from the situation, or, rather, a determination of how much it should be worth to each of these individuals to have this opportunity to bargain."

Kalai Smorodinsky's 1975 alternative Itself is also motivated, in part, on ethical grounds. Monotonicity, as an axiom, is rooted in the perceived "unfairness" of comparing different solutions of bargaining games.

It seems difficult, in light of these crucial works in economic thought, to completely dismiss normative assessment on this site. However, that said, it clearly should only be applied when "necessary" (for lack of a better term). Does anyone have any thoughts on the matter?

Thank you!

Answer 1

This question is kinda making me call into question what I thought I knew about the difference between positive and normative statements. :)

But, yeah, I think that any question which invites purely subjective answers probably doesn't belong on the site. I don't think that this is really a problem. In the Diamond 1967 paper that you cited, for example, the point is whether or not the axiom in question represents the notions of justice held by the average person. This seems like something that is testable and, therefore, invites non-subjective answers. On the other hand, if the discussion were "do I personally like that axiom or not?" would be a subjective question.

Answer 2

The general Stack Exchange rule seems to be that we should avoid statements or questions that are purely opinion-based. Thus, it would be off-topic to express a like or dislike for a particular axiom, distribution of wealth or any other object. Similarly, we shouldn't solicit such statements.

However, this should not be equated with avoiding normative statements altogether. There are plenty of those in economics, there are many classes taught in normative economics, and this community would not reflect the discipline if we were to shy away from them.

For example, consider the standard discussion that you have in a Public Economics class about optimal income taxation (e.g., using the Mirrlees model). There is an extensive economics literature on how normative conclusions change about tax rates, depending on the social welfare function.

We can go further than that though, and look at normative statements about normative criteria themselves. For example, there are plenty of papers about whether some social welfare functions are better than others in some way. A distinguishing feature of them is that they are clear about exactly what is desirable (or not) about particular approaches.

For example, Kaplow & Shavell, 1999 show that a particular class of welfare functions violate the pareto principle. This is useful and very much on-topic for this site. It would perhaps not be appropriate to start a discussion of whether or not you like the pareto principle.

I therefore partly disagree with the statement by @AlecosPapadopoulos in the cited answer.

Now, the fact that even without hoarding, rich people may stay rich or become richer, the fact that there are people dying of hunger while others live lavish life-styles, and how do we judge the existence and degree of financial inequality we observe, is as I said in the beginning, a totally different matter, and off-topic on this site.

To rule as off-topic any discussion of "how we judge the degree of financial inequality we observe" would be to rule out discussion of a significant and important part of the economics literature.

Perhaps it would be better to state simply that it would be off-topic to provide a purely opinion-based discussion of normative issues such as the distribution of wealth. Discussion the application, properties and/or choice of well-defined normative criteria could definitely be relevant if it answers the question at hand.