Normative Elements in Economics

Mr. Stark's remarks here this morning have touched upon a concept very apropos for discussion at the annual meetings of the CEA. Early in his paper, he spoke of the need to evolve ... a true art of political economy utilizing both factual and philosophical knowledge and wisdom in the exercise of judgment on the basic decisions of the State.1 The implication is that economic analysis as a policy-making tool must not be isolated from normative criteria; a preconditioned set of welfare and social justice norms inherently underlie the public decisional process. This is especially true in the area of human resource investment with which, in part, Mr. Stark's paper treats. Granted, the quantitative ap? proach to investment in human resources needs further study and refine? ment. H. W. Singer pointed out quite correctly at the meetings two years ago that . national economic accounting includes a large amount of statistical error and guesswork. .2 This applies a fortiori to the quanta utilized in human resource investment programs such as man? power retraining and associated projects. Notions of social justice actually applied to policy formation must presuppose an adequate factual and analytical framework if the resultant programs are to be effective. Sound data are the starting point! This policy formulation process, as emphasized earlier, does require the skills of both the economist and politician with, hopefully, both steeped in the canons of social justice. The normative approach to na? tional programs?both governmental and private-sector sponsored?can? not be conceived and operated in spite of certain analytical and objective analysis of their effectiveness; but rather, the two approaches, to say almost the obvious, go hand in hand. We all recognize that the PPB cost benefit analysis of which Mr. Stark spoke is dependent upon basic value judgments as to both social costs and social benefits, and is still in a stage of evolvement and refinement. Notwithstanding this, however, the ap? proach is refreshing and its application by now to most of the Federal Government's programs is encouraging. But what about the private sector; and further yet, what about joint governmental-private programs ? I am pleased that the Joint Economic Committee has recently concen? trated so heavily in the human resources area, though, or so it seems, 37

Economic Justice · Economics · Government (linguistics) · Investment (military) · Normative · Political science · Politics · Positive economics · Sociology · Economic Policies and Impacts · Economic Theory and Institutions · Economic Theory and Policy · Law · Philosophy

• The Notion of Human Investment

  H W Singer•Review of Social Economy•1966

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