In our first unit, we learned about two different types of economics: positive economics, and normative economics. While you might think it is easy to distinguish between the two, there are situations in which the line separating these two types of economics can seem somewhat blurred.
A statement is a positive economic statement if it does not have any opinion involved-- or if you are "positive" about it (Ha.) A statement is normative if it is not fact-based, but rather opinion based. Typically, normative economic statements cannot be proven. This concept is more readily understood through practice than through explanation so I will provide some examples:
The statement: "It is 90 degrees outside today" is a positive economic statement, because it is factual.
The statement: "It is too hot to play Spikeball today" is a normative statement, because it is opinion based.
The statement: "Donald Trump is the president of the United States" is a positive economic statement, because it is factual.
The statement: "Donald Trump should not be president of the United States" is a normative economic statement, because it is opinion based.
So, positive statements are used for the reporting of facts, because that is exactly what they are: factual. Most often, discussion over economic or political policies takes place via normative statements, as different economists or politicians state their beliefs/opinions. These discussions are sometimes inconclusive, because, by definition, normative statements cannot be proved. Thus, normative statements are most often used in debate.
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I think it is really interesting how you mention that modern-day political and economic policy discussions are mostly normative. Opinions and facts can both be used in very influential ways to provide evidence of different sides of a policy. Do you think one method is more useful than the other? Would using positive economics provide a more conclusive solution to the discussion?
ReplyDeleteKyle, you said "there are situations in which the line separating these two types of economics can seem somewhat blurred," but positive and normative economics are fundamentally different. Positive statements can be tested and either proved or disproved, while normative statements, being based on opinion, cannot be proved or disproved.
ReplyDeleteI'm curious, can you think of any scenarios where it's hard to distinguish between a normative and positive statement? They seem radically different to me.
It is interesting that you mention how widespread the use of normative economic statements is today, especially in politics. I think this can be problematic, because some people cannot tell the difference between positive and normative statements, or at least do not try to acknowledge the difference. Oftentimes, the public in general is very quick to take normative statements made as fact, though they are, by definition, opinion, which produces biases, sometimes with little rationality. Though this is not a new phenomenon, it is extremely widespread today, which contributes partially to the vast polarization of American society.
ReplyDeleteThough I never really realized it before, it does make sense that politics typically use normative statement simply for the reason that those statements cannot be proven, and politicians are stating their beliefs on a particular topic. They may base their arguments off of a fact such as a problem with the government or economy that cannot be disputed, however, their way of fixing that situation is normative since options vary on how to solve a given proverbial. Though I also wonder what are situations where the line between positive and normative economics may be blurred.
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