1 The Positive and the

Normative in Economic
Thought
A Historical-Analytic Appraisal
Sina Badiei and Agnès Grivaux

Introduction
The relationship between the positive and the normative is one of the most
central methodological and theoretical problems in economics, as shown by
numerous debates in the last two decades. Examples from the growing body of
work on this subject include Davis (1990, 2003, 2014), Hausman (1992/2003,
2011, 2018), Hausman et al. (2016), Mongin (2002, 2006a, 2006b, 2018),
Putnam (2002, 2003), Putnam and Walsh (2012), Caplin and Schotter (2008),
Boylan and Gekker (2009), Hands (2012), Su (2012), Colander and Su (2013,
2015, 2019), and Marchetti and Marchetti (2017). Studying various and dis-
tinct approaches to the relationship between the positive and the normative
is valuable for economics and philosophy, since it can allow us to lay bare the
assumptions that are often implicitly presupposed in the works of economists.
These assumptions tend to exert signifcant infuence on the way economists
describe social phenomena, evaluate them and propose a whole range of poli-
cies and proposals to reform public institutions.
These studies can moreover highlight or make explicit an important number
of conceptual distinctions, for example, between norms, values and facts, or
between description, evaluation and prescription. For example, Wade Hands
(2012) insists on the necessity of distinguishing, on the one hand, between
epistemic values that infuence scientifc work and social norms that regu-
late the behaviour of socio-economic agents in general (ibid., 220–221)1 and,
on the other hand, between ethical norms and other types of social norms.
For Hands, it is a mistake to consider all norms as ethical since, for example,
‘rationality in the sense of rational choice theory does not imply moral choice;
it may be a normative theory, but it is not an ethically normative theory’ (ibid.,
231). Hilary Putnam, in contrast, tries to critically evaluate the presuppositions
that underlie some of these distinctions such as those that underpin the distinc-
tion introduced by Jürgen Habermas between norms and values (Putnam and
Walsh 2012, 121–128).
It is important to stress that conceptual clarity and clarifcation are not the
only fruitful results of such studies. By examining diferent ways of theorising
the relationship between the positive and the normative, for example, those

DOI: 10.4324/9781003247289-1
2 Sina Badiei and Agnès Grivaux
that defend the primacy of positive studies, or those that insist on the radi-
cal separation between the positive and the normative, it becomes clear that
schools of thought that are radically divergent may well be able to agree on cer-
tain positions. This is surprising and even more so when we consider that a spe-
cifc interpretation of the relationship between the positive and the normative
is shared by schools of thought that oppose each other on all other theoretical
questions: the one that considers the development of the positive knowledge
of economic facts as the only way to resolve disagreements on normative issues
and questions related to the reform of public institutions.
For example, if we rely on the way John Neville Keynes (1891) theorises
the relationship between the positive and the normative,2 we can then identify
important similarities between various members of the Marxist school, the
Austrian school and the Chicago school, especially when we focus on Karl
Marx, Ludwig von Mises and Milton Friedman. When we compare the eco-
nomic thought of these economists, it becomes clear that they all subordinate,
albeit in diferent manners, the normative evaluation of social situations and
various politico-economic prescriptions to the positive and value-free analysis
of the hitherto-existing social situation and its objective representation.
For Friedman, normative economics depends on positive economics because
decisions concerning what economic policies to pursue rely on predicting the
consequences of this or that fact and hence on positive economics (Friedman
1953). Only the progress of positive economics can thus settle disagreements
about what new economic policies to implement. For Mises, it is the positive
analysis of the a priori structure of human action that can contribute to the for-
mulation of diferent – mostly negative – proposals about what can and should
be done in the economic feld (Mises 1949/2008), without which normative
proposals to change existing situations risk being futile or having catastrophic
consequences. As for Marx, he intends to develop an economic theory that is
immanent, that is, non-normative, in order to avoid the pitfall encountered
by other socialists and communists (Marx and Engels 1848/1998, 72). Marx is
very sceptical of the projects for rectifying existing social injustices proposed by
these thinkers (ibid., 75). Considering that only normative ideas whose germs
are hidden in existing reality are to be taken seriously (Marx and Engels 1976,
92), Marx refuses to propose alternative normative ideas and instead studies
positive reality in order to identify where these germs may reside.
The position adopted by Marx, Mises and Friedman regarding the relation-
ship between positive and normative economics has exerted a considerable
infuence on the history of economic thought. It is, for example, shared by
economists before Marx, such as Bernard Mandeville (Dumont 1977), and
after Friedman, for example, Partha Dasgupta (2009, 584). However, we must
emphasise that this position is far from being the only one that we can fnd
throughout the history of economic thought, and it is not even shared by all
the members of the schools of thought to which Marx, Mises and Friedman
belong.3
 The Positive and the Normative 3
The Positive and the Normative in Economics:
A Historical Perspective
Historically speaking, it is fair to say that economists started to deal, systemati-
cally, with the relationship between the positive and the normative, between
the description of social facts and the evaluation of these facts and prescriptions
for political-economic reforms, in the nineteenth century. The most promi-
nent economists who initiated such systematic analyses are Senior (1826/1852),
Mill (1836/1967), Cairnes (1857), Walras (1874/2014), Sidgwick (1885) and
Keynes (1891),4 as well as those who took part in the Methodenstreit (the dispute
over methods) among German-speaking economists, notably various members
of the German historical school of economics and Carl Menger (Campagnolo
2010).
This does not mean that prior to these systematic eforts, economists did not
pay attention to the distinction between positive descriptions of social facts and
normative evaluations of social facts and various proposals to modify these facts,
but they often did so implicitly. The economic and philosophical thought of
Adam Smith can be used to illustrate this point.

The Positive and the Normative in Adam Smith’s Economic

and Philosophical Thought
As noticed long ago by Mill (1836/1967, 312) and Walras (1874/2014, 4–7),
Smith’s most explicit attempt at defning the nature and tasks of economics
(Smith 1999, 5) portrays the latter as a purely normative discipline:

Political economy, considered as a branch of the science of a statesman or

legislator, proposes two distinct objects: frst, to provide a plentiful revenue
or subsistence for the people, or more properly to enable them to provide
such a revenue or subsistence for themselves; and secondly, to supply the
state or commonwealth with a revenue sufcient for the public services. It
proposes to enrich both the people and the sovereign.

Smith ofers this defnition in the fourth book of his An Inquiry Into the Nature
and Causes of the Wealth of Nations, dedicated to a critical analysis of the so-called
mercantilist thought. According to this defnition, economics is mainly about
facilitating the pursuit of certain objectives and these objectives should gov-
ern what economists do. However, if we focus on Smith’s moral and political
philosophy, notably his The Theory of Moral Sentiments, we can fnd another –
implicit – defnition of economics which is far less normative. In The Theory
of Moral Sentiments, Smith demarcates four cardinal virtues which, he argues,
play an indispensable role in the way people behave: self-command, prudence,
justice and benevolence (Smith 2009, 280, 308–309). He seems to consider
economics as the discipline that should study the behaviour of individuals from
4 Sina Badiei and Agnès Grivaux
the point of view of one of these cardinal virtues, that is, prudence (Haakons-
sen 2006, 7). Economics would thus be a science that studies the main char-
acteristics of social life by assuming that the behaviour of individuals is mainly
determined by only one virtue, prudence, which means that economics studies
social life in the abstract, since in its studies, it does not take other virtues that
govern individual behaviour, notably benevolence and justice, into account.
This more implicit defnition of how Smith theorises the role of economics
shows clearly that to understand his economic thought, we should start from
The Theory of Moral Sentiments. Doing so allows us to see that Smith’s point of
departure is, as emphasised by various scholars (Haakonssen 2006; Sen 2009;
Putnam and Walsh 2012; Diatkine 2019), the analysis of the norms that regu-
late and structure human behaviour. We should nonetheless note that Smith
does not aim, at least explicitly, to propose a normative, hence evaluative, the-
ory of social and moral norms. He intends, as he repeatedly indicates, to ofer
a rather positive, hence descriptive, account of the role that moral and social
norms play in individual behaviour and social life. As he puts it, ‘the present
inquiry is not concerning a matter of right, if I may say so, but concerning a
matter of fact’ (Smith 2009, 93). Still, he regularly moves beyond a purely posi-
tive account of norms and ofers explicitly normative accounts of the role that
ought to be attributed to diferent norms. This can be seen most clearly in the
fnal part of the book, where he compares his moral thought to other systems
of moral philosophy (ibid., 315–403). In this more normative and evaluative
account of various virtues and norms, he largely agrees with Francis Hutcheson
that benevolence is the noblest virtue (ibid., 354),5 but it is seen by him as too
personal in its exercise (Haakonssen 2006, 17), which makes it difcult to use
it to propose socially binding rules. This leads him to reject (Smith 2009, 401)
any detailed and especially prescriptive accounts of benevolence as ‘casuistic’.
His sceptical attitude towards detailed accounts of benevolence is equally
related to his belief that ‘benefcence . . . is less essential to the existence of
society than justice. Society may subsist, though not in the most comfortable
state, without benefcence, but the prevalence of injustice must utterly destroy
it’ (ibid., 104). Even if in his discussion of justice, he recognises (ibid., 321) that
the latter has two diferent senses, that is, commutative justice and distributive
justice, his eforts to propose the rules of justice are not very detailed when it
comes to distributive justice. Apart from the study of prudence which is part of
political economy, he thus recognises two other ‘useful parts of moral philoso-
phy, . . . Ethics and Jurisprudence’ (ibid., 401). His analysis of jurisprudence
is limited to commutative justice, and he considers ethics as a discipline ‘that
does not admit of the most accurate precision’ (ibid., 388). Therefore, even if
for Smith benevolence and distributive justice – which in his words ‘consists
in proper benefcence’ (ibid., 321) – are indispensable to a happy and virtuous
life, his refusal to propose a meticulous analysis of them difers sharply from the
position of numerous leading theorists in contemporary normative political
and economic thought, such as those who have been working on contem-
porary theories of justice (Rawls 1971/1999; Roemer 1993, 1996; Fleurbaey
 The Positive and the Normative 5
1996, 2018) and feminist economics (Beneria et al. 2011), especially when the
focus is on the ethics of care (Gilligan 1982; Noddings 1984/2013).
This analysis of Smith’s thought shows that while he often strives to adhere
to purely positive analyses of social norms as matters of fact, his analyses are
in fact permeated with explicitly normative – and thus evaluative and pre-
scriptive – accounts of norms. The same observation pertains to his economic
analyses where, for example, his appraisal of the conficting interest of various
social classes as regards economic progress and opulence (Smith 1986, 355–359)
involves various descriptive and evaluative – as well as prescriptive – elements.
We can therefore argue that even if he considers the distinction between posi-
tive and normative analyses to be important, he constantly moves back and
forth between the two forms of study in his writings.

The Positive and the Normative in Nineteenth-Century

Economic Thought
In contrast, and as already mentioned, nineteenth-century economists often
dedicated at least parts of their writings to the explicit analysis of the rela-
tionship that should prevail between purely factual analyses of social facts and
norms, and normative (evaluative and prescriptive) theories. While most of
these economists advocate the necessity of separating the two forms of study,
their approach does not often correspond to the one we have attributed to
Marx, Mises and Friedman but to a position whose most mature form is found
in the works of John Stuart Mill.
According to Mill, in order to fully grasp the peculiar character of political
economy, it is important to distinguish between the ideas of science and art,
since:

The one deals in facts, the other in precepts. Science is a collection of

truths; art, a body of rules, or directions for conduct. The language of
science is, This is, or, This is not; This does, or does not, happen. The
language of art is, Do this; Avoid that. Science takes cognisance of a phe-
nomenon, and endeavours to discover its law; art proposes to itself an end,
and looks out for means to efect it.
(Mill 1836/1967, 312)

Therefore, for political economy to be a science, it must not be ‘a collection

of practical rules’ (ibid.). The fact of prescribing rules to achieve desired objec-
tives, as well as the choice of the objectives to be pursued, is thus, for Mill, not
a science but an art. This does not mean that the evaluation of the objectives
to pursue is totally subjective since ‘an art would not be an art, unless it were
founded upon a scientifc knowledge of the properties of the subject-matter’,
and even if ‘rules . . . for making a nation increase in wealth, are not science’,
to make sure that such rules can achieve their intended efects, they must be
‘the results of science’ (ibid., 312). Hence, even if economics as a scientifc
6 Sina Badiei and Agnès Grivaux
discipline is about studying social facts from a non-normative perspective and
does not ‘instruct how to make a nation rich’, ‘those who want to pursue the
goal of making nations rich must frst be a political economist’ (ibid., 312).
We must nonetheless pay attention to the fact that political economy, under-
stood as a positive science, studies, according to Mill (and most economists
before the marginalist turn in economics), a specifc and limited dimension of
human nature, since for him, ‘political economy informs us of the laws which
regulate the production, distribution, and consumption of wealth’ (ibid., 313).
Because the desire for wealth is only one of the principles governing human
behaviour in social life, and since the scientifc analysis of the other determin-
ing principles belongs not to political economy but to other social sciences,
‘the mere political economist, he who has studied no science but political
economy, if he attempts to apply his science to practice, will fail’ (ibid., 331).
This is why Mill considers that the part of political economy that deals with
the evaluation of social facts and prescriptions must rely on positive scientifc
studies that are carried out not only in positive economics but also in the other
social sciences. Although economists must do their best to learn about the
studies undertaken in other positive social sciences, it is only when they study
social facts from an economic point of view that they can really be aware of
these facts scientifcally. In order to be able to evaluate social facts and prescrip-
tions in a more scientifcally grounded manner, economists must possess a solid
knowledge of social life in all its dimensions. However, the fact that economists’
positive knowledge is solid only when it comes to studying social life from an
economic, and thus limited, perspective prevents them from being able to jus-
tify their normative evaluations and prescriptions on truly scientifc grounds.
Therefore, the normative evaluation of facts and prescriptions, although very
important, is not a science but an art.

The Positive and the Normative in Twentieth-Century

Economic Thought
Thanks to David Colander and Huei-chun Su (2013, 2015), we have been able
to appreciate to what extent Mill’s way of theorising the relationship between
the positive and the normative has infuenced the position of later economists
on the topic. Colander and Su, as well as Andrea Scarantino (2009), have, for
example, shown that even if in his writings in the 1930s, Lionel Robbins’s way
of theorising the relationship between the positive study of social facts and the
normative evaluation of social facts and prescriptions (Robbins 1932, 1938)
resembles the position that we have attributed to Marx, Mises and Friedman,
he later on nuances his views on the topic (Robbins 1976, 1981) and embraces
a position akin to Mill’s (Colander and Su 2015, 161–163). Scarantino, Colan-
der and Su rely on Mill and the later works of Robbins to propose a taxonomy
of various views concerning the relationship between science and norms (or
values). They distinguish three diferent positions: the ‘naive positivist view’,
the ‘separatist view’ and the ‘non-separatist view’ (Colander and Su 2013, 8).
 The Positive and the Normative 7
The ‘naive positivist view’ is very much akin to the position that we have
identifed in Marx, Mises and Friedman. It consists of considering disputes over
the normative evaluation of social facts and prescriptions as irresolvable and
thus out of the purview of any form of rational discussion. It therefore consid-
ers the value-free study of social facts as the only scientifc and rational domain
of economic inquiry.
The ‘separatist view’, which resembles the position of Mill, considers rational
studies of norms and values to be important, but it does not consider such
studies to have the potential of becoming properly scientifc. For those who
advocate this position, the positive and thus value-free study of social facts can
in contrast be scientifc. As such, while they share with the proponents of the
‘naive positivist view’ the idea that positive studies of social facts can be carried
out on a norm-free and scientifc basis, they disagree with their pessimistic atti-
tude towards discussions about norms and values that govern social evaluations
and prescriptions. For the proponents of the ‘separatist view’:

Positive economics is part of science. So economists doing positive eco-

nomics should take guidance from scientifc methodologists on the appro-
priate methodology for positive economics. Normative economics is a part
of moral philosophy. So economists doing normative economics should
take guidance from moral philosophers on the appropriate methodology
for normative economics.
(Colander and Su 2019, xiv)

Finally, the ‘non-separatist view’ refers to the position of those, such as Put-
nam, who reject the possibility of making a clear distinction between facts and
values, and between the study of facts and the study of norms and values. For
the proponents of this view, values and norms are an intrinsic part of social
phenomena, and even positive studies that try to abstract from the role that they
play in social life are highly inaccurate since by glossing over norms and values,
they ignore the most determining aspect of social life.

The Positive and the Normative in Economics and Their

Variegated Forms
These three views have the advantage of elucidating the extent to which the
relationship between the positive and the normative has taken diferent and
varied forms throughout the history of economic thought. Still, since they try
to characterise the relationship between ‘science’ and ‘values’ or norms, there
are implicit presuppositions that underlie these views: the very fact of start-
ing with a distinction between ‘science’ and ‘values’ shows that the possibility
of studying values and norms in a scientifc manner is somewhat foreclosed.
This becomes clear when we notice that among the three views on ofer,
none of them corresponds to a view that would embrace the possibility of
describing social facts in a scientifc and positive manner, but which would
8 Sina Badiei and Agnès Grivaux
equally embrace the possibility of evaluating social facts and prescriptions in a
scientifc and normative manner. In other words, none of the aforementioned
views advocates the possibility of distinguishing a scientifc positive economics
from a scientifc normative economics. It is worth noting that this fourth view
embodies the position of several prominent fgures in the history of economic
thought, such as Léon Walras and John Neville Keynes, and of contemporary
economists such as Philippe Mongin.
For example, Léon Walras is critical of considering economics as a purely nor-
mative discipline that should do nothing other than evaluate the existing social
situation from the point of view of privileged norms of justice and then rely on
the same norms to prescribe measures to reform the existing situation. As already
mentioned, he attributes this position, somewhat misleadingly, to Smith, but he
then criticises the position of other economists, such as Jean-Baptiste Say, who
embody the opposite tendency, wherein economics is considered as a purely
norm-free positive science that studies social phenomena as if they were natural
phenomena. Walras moreover emphasises that among these two opposing ten-
dencies, the positivist one which neglects evaluative and prescribing approaches
is not less prone, contrary to what one might think, to political motives:

What has seduced economists in this defnition is precisely the appearance

of a natural science that it gives to the whole of economics. That point of
view, in fact, has singularly aided them in their fght against the socialists.
Every plan of organisation of work, every plan of organisation of prop-
erty was rejected by them a priori and, so to speak, without discussion,
not as being contrary to economic advantageousness, nor as contrary to
social justice, but simply as an artifcial scheme designed to replace a natu-
ral scheme. And what is more, this naturalistic viewpoint was borrowed
from the Physiocrats by J.-B. Say and was inspired by the formula: Laissez
faire, laissez passer that summarises their doctrine in regard to industrial and
commercial activity.
(1874/2014, 7–8)

To avoid the difculties posed by these unilateral defnitions of economics, we

should, according to Walras, divide economics into three diferent branches,
each of them equally important. These three branches are pure (or theoretical)
political economy, which studies economic categories and phenomena in the
abstract,6 and notably relationships of exchange between objects that are use-
ful and scarce (ibid., 20–28); applied economics, which studies various meth-
ods of organising social production in order to maximise the production of
objects that are rare and useful but industrially reproducible (ibid., 29–33); and
fnally social economics, which strives to determine the criteria of justice that
should govern the distribution of useful and rare objects among diferent peo-
ple, whose most central concepts are thus justice and property relations (ibid.,
33–36). It is important to highlight that for Walras, the studies that are part of
these three branches of economics, though distinct, can all be carried out on
 The Positive and the Normative 9
a scientifc basis, and this includes the most normative branch, namely social
economics. As he puts it:

if ever a science has had the objective of rendering to each that which is
due to him, if ever a science consequently has had justice as its objective,
it is surely that of the distribution of social wealth, or, as we will call it,
social economics.
(ibid., 36)

The other example is J.N. Keynes, who argues that even if making a dis-
tinction between the positive and the normative is often very difcult, for the
sake of analytical clarity (Keynes 1891, 47), it is desirable to make a distinc-
tion between positive economics, which studies, in a non-normative way, eco-
nomic phenomena – including existing social norms that infuence and govern
the economic behaviour of social agents7 – and normative economics, which
relies on various norms to evaluate the facts established by positive economics
and ofers ideals that ought to govern the reforms of existing social situations.
But while he insists on the usefulness of distinguishing the two forms of study,
he maintains that positive economics is not the only scientifc branch of eco-
nomics, and normative economics can equally be carried out on a scientifc
basis (ibid., 35). In other words, the fact that normative economics is distinct
from positive economics does not make it unscientifc. By considering norma-
tive economics as a science, Keynes breaks with his British predecessors and
turns instead to the German historical school (Mongin 2018, 159–160).
By arguing that the evaluation of norms and values can be scientifc, the
position of Walras and Keynes is close to the position attributed by Smith to
Plato (Smith 2009, 323). Still, when Walras and Keynes maintain that social
economics and normative economics can be scientifc, they do not mean that
the scientifc methods used in these disciplines are akin to those used in pure
economics or positive economics. Instead, they contend that these norma-
tive disciplines have the potential to examine and evaluate politico-economic
norms in an objective manner8. These similarities do not mean that Walras and
Keynes share an identical position regarding the relationship between descrip-
tive, evaluative and prescriptive tasks of economics. However, the way they
theorise the relationship between the positive and the normative shows that the
three views put forward by Scarantino, Colander and Su are far from capturing
the variety of ways in which this relationship has been theorised in the course
of the history of economic thought. Such classifcations can, moreover, prevent
us from apprehending important diferences that separate those to whom we
can attribute, at least on a formal level, any of these views. This is especially
problematic if we try to criticise any of these views by identifying the view
that is being criticised with one specifc form of it, often not the most rigorous
one, and then overlook the fact that other embodiments of this view are very
diferent from the position that is taken as representative of the view under con-
sideration. This point can be elucidated by scrutinising the position of Putnam.
10 Sina Badiei and Agnès Grivaux
The Fact/Value Entanglement and the
Non-Separatist View
The most famous proponent of the ‘non-separatist view’ is Hilary Putnam. He
tries to show that in the social sciences, and especially in economics, facts and
values are not in a dichotomic relationship, hence ‘the idea of the entanglement
of fact and value’ (Putnam and Walsh 2012, 112). This does not mean, accord-
ing to Putnam, that ‘there is no diference between facts and values’ (ibid., 114),
but it nonetheless shows that there are in fact two distinct theses in Putnam:

1 He criticises the positivist thesis according to which the study of norms

and values is always merely subjective and thus unscientifc.
2 His critique of the positivist thesis leads him to defend the idea of the fact/
value entanglement.

However, as shown elsewhere (Badiei 2021), rejecting the dichotomic rela-

tionship between facts and values does not necessarily lead to the idea of their
entanglement since we can reject the dichotomic relationship between facts
and values without denying the possibility of distinguishing them in a relatively
clear manner. The examples analysed by Putnam show that the positivist thesis
that excludes normative and value considerations from the purview of eco-
nomics is clearly erroneous and that it cannot be defended even with respect
to studies that aim to describe existing facts. But contrary to the conclusion
that Putnam draws from them, they do not show that we are faced with a fact/
value entanglement that prevents us from separating, in social descriptions, the
positive and the normative levels of analysis.
Still, Putnam is but one example among a growing number of scholars who
have attempted to criticise the ‘positivist view’ that has historically dominated
a very important part of research in economics. While their critical appraisal of
the positivist view has led them to defend positions that correspond more or
less to the ‘non-separatist view’, their diferences are far from being negligible.
For example, many scholars have pointed to the difculties of clearly distin-
guishing the positive from the normative (Rosenberg 1994; Davis 2003, 2014;
Hands 2012), while others have highlighted the fact that economists’ normative
preferences tend to infuence their research in positive economics (Hausman
1992/2003; Hausman et al. 2016; Reiss 2017; Małecka 2021). A comparable
but divergent position has been central to much of the post-Foucauldian work
in economic philosophy (Laval 2007, 2018) and to works inspired by Fou-
cault (Mirowski and Plehwe 2009; Audier 2012; Audier and Reinhoudt 2017;
Cayla 2020), which have tried to reveal the role played by normative political
motives in the positive theories of certain economists. Another ‘non-separatist’
approach can be found in the works of authors (Callon 1998; MacKenzie et al.
2007; MacKenzie 2009; MacKenzie et al. 2017) who have been interested in
the question of the performative infuence that positive theories exert on the
social world, that is, the fact that positive theories, by way of describing various
 The Positive and the Normative 11
so-called factual patterns of behaviour, end up encouraging social agents to act
in this way, thus creating, instead of representing, a pattern of behaviour. From
this point of view, positive economics should be considered ‘not as a form of
knowledge that depicts an already existing state of afairs but as a set of instru-
ments and practices that contribute to the construction of economic settings,
actors, and institutions’ (MacKenzie et al. 2007, 4).
Given that the ‘separatist view’ encompasses very diferent positions that can
hardly be assigned to a single category – recall the diferences separating Mill
from Walras and Keynes – expecting the ‘non-separatist view’ to imply a single
unifed position is clearly problematic.9

Evaluation and Prescription in Normative Economics

Another factor that complicates eforts to capture, using few categories, the
variety of ways in which the relationship between the positive and the normative
has been theorised deals with the question of whether normative economics is
merely about evaluating existing social situations or whether it also has to take
on the task of evaluating and prescribing norms that govern the modifcation of
social situations, especially when existing social situations are judged undesirable
and can be modifed by means of reforming public institutions. This question has
led to important diferences, even among economists who have followed Walras
and Keynes in considering normative economics as a science, such as Pigou
(1920/2017), Arrow (1951/2012, 2016), Sen (1970/2018), Stiglitz (Stiglitz
and Atkinson 1980/2015; Stiglitz and Rosengard 2015), Mongin (Mongin and
Fleurbaey 1996; Mongin 2002, 2006a, 2006b, 2018), Roemer (1993, 1996,
2019) and Fleurbaey (1996; Fleurbaey and Maniquet 2011; Fleurbaey 2018).
We should note that if normative economics is for Keynes and Walras a sci-
ence, it is because it attempts to evaluate various social situations from a limited
point of view, namely in terms of their capacity to increase or decrease mate-
rial wealth (Keynes 1891, 2) or infuence the distribution of wealth (Walras
1874/2014, 35–36). The fact that the purview of topics that are discussed in
normative economics is drastically limited is precisely why normative econom-
ics can be a science. Moreover, this limited scope allows normative economics
to not only assess the desirability or undesirability of various social situations
but also propose objectives to be pursued in order to bring about social situa-
tions that are deemed more desirable, if only from the point of view of wealth
and its distribution (Walras 1896, 422–462).
However, we know that the defnition of economics as a science of wealth
is no longer shared by many theoretical economists since the marginalist turn
in economics. Not only modern microeconomics relies on concepts such as
preference and utility that are applied to any situation that embodies a choice
between diferent possibilities, even in modern macroeconomics, economists
do not study social phenomena from the limited perspective of material wealth;
think of the World Happiness Report and the Human Development Index,
both developed by economists, and the considerable broadening, in recent
12 Sina Badiei and Agnès Grivaux
decades, of the notion of GDP (‘The Trouble with GDP’ 2016a, 2016b; ‘Kick-
ing the GDP Habit’ 2020). In addition to this enlargement is the fact that,
especially since Robbins (1932, 1938) and in reaction to the work of Pigou
(1920/2017), many economists consider that the criteria or standards of utility
of each individual are incommensurable and incomparable with those of others.
Because of these evolutions of economics as a discipline, economists who
defend the scientifc, or objective, character of normative economics have been
obliged to come up with novel ways of defning the nature and tasks of nor-
mative economics. Similar to most post-marginalist economists, they accept
and adopt the formal defnition of economics in which its basic concepts,
be it utility, choice, opportunity (Sugden 2018) or capability,10 are all purely
formal. Therefore, in order to establish the scientifc or objective character of
normative economics, they have not attempted to restrict its scope to sharply
delineated topics and issues. However, since their defnition of economics is
consequently very broad, they have often been compelled to defne normative
economics as a mainly evaluative discipline, where its task would be ‘to inves-
tigate methods and criteria for evaluating the relative desirability of economic
states of afairs’ (Mongin 2002, 145).
For this reason, the rules established by economists working on normative eco-
nomics to verify the scientifc character of theories are mostly formal and abstract,
although the formal and abstract criteria employed are very diferent from one
theoretical framework to another. For example, within the new welfare econom-
ics (Hausman 2018, 198–200), and even within certain strands of public econom-
ics (Stiglitz and Atkinson 1980/2015; Stiglitz and Rosengard 2015), the Pareto
criteria play a prominent role, in contrast to their rather secondary role within
social choice theory. Because of the central role played by Paretian notions, econ-
omists working in the new welfare economics have tried to avoid defning social
functions involving interpersonal comparisons of utility. By contrast, economists
working on social choice theory have tried to show that any normative social
analysis, to avoid ‘dictatorial’ views in the sense of Arrow’s impossibility theorem,
must necessarily involve interpersonal comparisons of utility (Mongin 2006a, 24).
As pointed out by Hands (2012, 224), numerous economists

embraced the change to the Pareto criteria in welfare economics primar-

ily because it ofered an evaluative standard that was devoid of all of the
troublesome normative issues associated with interpersonal comparisons of
utility and thus provided a strictly positive/scientifc way of making judge-
ments about social welfare and microeconomic policy.

Still, while these economists often think that relying on the Pareto criteria
allows them to evaluate social situations without presupposing any norms or
values, these criteria are imbued with various norms and values, as shown
by Hausman (1992/2003, 60–62; 2018) and Davis (2014). These observations
remind us how essential it is to critically examine the relationship between the
positive and the normative, even in scholarship on normative economics.
 The Positive and the Normative 13
It is probably correct to say that for most economists who have worked on
normative economics, the latter is ‘concerned solely with norms and evaluations,
not with the way in which these can be achieved in the economy’ (ibid., 44).
However, Mongin – who is critical of the idea of restricting normative econom-
ics to theoretical frameworks which avoid the thorny issue of prescribing policies
and reforms to modify social situations which are deemed undesirable – rightly
observes that ‘normative economics must be concerned with implementation
issues, if only because they count among the considerations weighing for or
against evaluative criteria’ (ibid., 44), and he counts Arrow (1951/2012, 2016)
and Sen (1970/2018) among those who share his view (Mongin 2006a, 43).
One way of dealing with the problem raised by the entanglement of evaluative
and prescriptive aspects of normative economics is through radically separating
the two. This solution is mainly advocated by Colander and Su (2019),11 who
argue that normative economics should focus on evaluative questions, leaving
prescriptions to a separate branch of economics that they call applied econom-
ics or the art of political economy. It is worth noting that they have not tried
to explain the rationale behind this proposal in a sufciently rigorous manner,
whereas it is paramount to explain why theoretical frameworks within normative
economics should not perform the tasks that they attribute to the art of political
economy. More specifcally, while this separation can resolve several conceptual
and theoretical difculties, it raises another problem: excluding prescriptive issues
from normative economics can lead, and has arguably led, to the proliferation of
highly abstract theoretical frameworks and models within normative economics,
which are sometimes difcult to use when it comes to evaluating concrete social
situations and various prescriptions aiming at reforming these situations.

This Volume’s Contributions to Debates on the Positive/

Normative in Economics
It is nonetheless important to remember that economists working on norma-
tive economics have been – and continue to be – in the minority, since the
so-called positivist view, which we have attributed to Marx, Mises and Fried-
man, continues to be the one shared by many economists. What, however, is
the cause of this consensus around the valorisation of positive approaches in
economics? Does the study of economic thought, in its diversity, make it possi-
ble to identify, beyond those methods analysed in this introduction, other ways
of theorising the relationship between the positive and the normative? Could
they, for example, allow us to grasp the importance of normative approaches in
economics? What are the positive assumptions of diferent theories in norma-
tive economics regarding individuals and the way they behave? What are the
pros and cons of making a distinction between the positive and the normative?
These are some of the questions and issues that will be discussed in this book.
Its aim is by no means to ofer a comprehensive view of the way the relation-
ship between the positive and the normative has been contemplated through-
out the history of economic thought. Instead, it aims to highlight approaches
14 Sina Badiei and Agnès Grivaux
that can make original contributions to existing debates and enrich them, even
if that implies changing the very terms by means of which existing discussions
have been structured.
The volume is divided into three sections, of which the frst section deals
with the relationship between the positive and the normative in the history of
economic thought, the second section with important debates concerning the
positive and the normative in contemporary economics, and the fnal section
with philosophical perspectives on issues raised by the positive and the norma-
tive in economic thought.
In the frst chapter of the frst section, Michel S. Zouboulakis ofers an
illuminating analysis of the role played by the positive/normative distinction
in some of the most prominent nineteenth-century British economists. Zou-
boulakis shows that these authors, especially Nassau William Senior, John Stu-
art Mill and Richard Whately, attempted to draw a bold distinction between
political economy as a positive science and various kinds of normative consid-
erations. They did so because they wanted to defend the newly born discipline
of political economy and its scientifc standing against multiple forms of attack
and criticism. More specifcally, it is shown that the distinction between the
positive and the normative allowed them to distinguish political economy from
three kinds of knowledge and considerations: practical, ethical and political. By
insisting on the separation of political economy from these three perspectives,
nineteenth-century British economists sought to reassure their detractors that
they did not have any hidden political and ethical agenda and that economic
theories could be used to advance difering, even antagonistic, political and
ethical points of view. The fnal part of the chapter deals with the shortcom-
ings of the way these economists theorised the relationship between political
economy and normative issues. It also examines the similarities and divergences
between their positions and those of certain economists in the twentieth cen-
tury, notably Robbins and Friedman.
The following chapter, by Gilles Campagnolo, examines in detail the meth-
odological writings of John Neville Keynes, whose The Scope and Method of
Political Economy has been one of the most infuential texts dealing with eco-
nomic methodology. Keynes’s distinction between positive and normative
economics became even more prominent when in 1953, Milton Friedman
started his highly infuential essay, “The Methodology of Positive Econom-
ics” (Hausman 1992/2003, 162; Mäki and Friedman 2009, 47; Rodrik 2015,
25), with approving allusions to the Keynesian distinction. The chapter starts
by analysing the impact of nineteenth-century German economic thought on
British economic thought, in particular on Keynes. It then highlights the bal-
anced and conciliatory character of Keynes’s epistemological refections, nota-
bly his views on the importance of both positive and normative studies in
economics, when compared to more extreme views of prominent nineteenth-
century German and British economists, for whom economics was either a
purely normative or a purely positive discipline. In the fnal part of the chapter,
Campagnolo describes how, in his view, it is important to resuscitate Keynes’s
 The Positive and the Normative 15
measured position regarding the role of norms and normativity in economics.
He explains how his views were pushed aside by newer tendencies in econom-
ics, which, like William Cunningham, insisted far more on the importance
of norms in social life than Keynes did or, especially in dominant currents of
neoclassical economics, marginalised normative economics.
In the fnal chapter of this section, Sina Badiei relies on J.N. Keynes’s dis-
tinction between positive and normative economics to analyse an unexpected
similarity between the way Karl Marx, Ludwig von Mises and Milton Fried-
man theorise the relationship between the positive analysis of social facts and
the normative evaluation of these facts and various proposals to modify exist-
ing social facts. Badiei shows that even if the positive economic theories of
these economists are radically diferent, they all consider the fact of discussing
and analysing various norms that govern social evaluations and prescriptions to
be very much futile. Marx, Mises and Friedman argue, therefore, that when
disagreements and conficts arise concerning proposals to reform existing insti-
tutions, the only hope to deal rationally and scientifcally with such conten-
tions is through a better understanding of social facts, which may allow us to
discover laws or tendencies capable of demonstrating why specifc proposals
and projects to reform existing situations are more likely than others to suc-
ceed or fail. The chapter shows that due to this position, they underestimate
the importance of developing theoretical frameworks in normative economics
to attend to diverging and conficting norms that underlie various proposals.
That is why the arguments they advance to justify their normative positions
are rather unconvincing. Moreover, this attitude exerts a deleterious impact on
their works in positive economics, especially in the case of Marx and Mises.
The second section of the volume, dedicated to the positive/normative issue
in contemporary economic thought, starts with John B. Davis’s analysis of the
role of norms and values in economics. The chapter’s primary goal is to defend
the possibility of practising economics on an objective and normative basis. It
starts with a critical examination of the refusal of mainstream economists to
acknowledge the value-ladenness of economics and the entanglement of facts
and values in what is called positive economics. Davis then shows that this
value-ladenness should not stop us from envisaging the possibility of practising
economics on an objective basis. He thus puts forward a theoretical approach,
whose central procedure is what is called value disentanglement, which intends
to examine whether the values presupposed by various theoretical frameworks
in economics are consistent or not. Davis shows that the basic value structure
of mainstream economics involves contradictory values, which hinders it from
becoming an objective science. The chapter then tackles the value structure
of the capability approach. It shows that the latter’s main foundational value
is similar to mainstream economics, but contrary to the latter, its other values
do not contradict its foundational value. It is shown that even if the capability
approach has to deal with the problem of paternalism, the nature of this prob-
lem is diferent from the one identifed in mainstream economics in that it can
be resolved without departing from the basic value structure of the capability
16 Sina Badiei and Agnès Grivaux
approach. The chapter ends with highly original refections and suggestions
regarding the relationship between economics and ethics.
The next chapter deals with the similarities and diferences between John Rawls
and James Buchanan regarding their understandings of constitutional political
economy. The authors of the chapter, Nathanaël Colin-Jaeger, Malte Dold and
Alexandre Gascoin, start by analysing the objections made by Buchanan to the
assumptions of Rawls’s contractualism and their unrealistic character. The chap-
ter shows that while some of the critiques of Buchanan are valid, Buchanan’s own
assumptions regarding individuals and their behaviour, which are mostly based
on rational choice theory, are not realistic either: real individuals are not reduc-
ible to the idea of self-interested economic agents as presupposed by Buchanan’s
contractarianism. The authors then discuss the evolution of Rawls’s position
between A Theory of Justice and Political Liberalism. They show that he became
increasingly aware of the pluralistic character of modern democratic societies,
which led him to develop a theory of public reasoning capable of accommodat-
ing more realistic positive assumptions about individuals and their behaviour in
the public sphere. Next, the chapter examines various aspects of Rawls’s refec-
tions on public reason and deliberation and ofers a way of dealing with one of
its main shortcomings. For the authors, assuming, as Rawls sometimes does, that
before actual public deliberations, the positions people defend are reasonable
might be unrealistic. Still, these positions can become potentially reasonable due
to actual public deliberations, and the fnal part of the chapter analyses certain
requirements for such public deliberations to actually occur.
In the following chapter, Guilhem Lecouteux ofers an original examination
of the challenges posed by behavioural economics to one of the main pillars
of welfare economics regarding the way individuals satisfy their preferences.
This challenge has led to the emergence of various attempts at reconciling nor-
mative economics and behavioural economics. The main two forms of these
attempts are what the author calls welfarist and contractarian solutions. The
chapter shows that capturing what is at stake in these solutions cannot be done
without analysing their ontological assumptions regarding the self and the lat-
ter’s autonomy. For Lecouteux, three distinct notions of the self are invoked
by those who have worked on the relationship between normative economics
and behavioural economics: the unitary and atomistic self, the psychodynamic
self and the socio-historical self. The chapter allows us to see that most debates
around the notions of nudging and behavioural paternalism often rely on the
unitary concept of the self, whereas changing the way we conceive individu-
als and their identity may lead to very diferent attitudes towards behavioural
paternalism and its (un)desirability. More specifcally, it is shown that by accept-
ing the socio-historical concept of the self, it becomes necessary to pay more
attention to the role played by social and institutional factors in the way the
preferences of individuals are formed. This may lead, in turn, to very diferent
kinds of policy proposals than those associated with behavioural paternalism.
The next chapter deals with the question of the addressees of normative
economics, in which Cyril Hédoin develops what he calls the social choice
 The Positive and the Normative 17
model of public reasoning to respond to the critical appraisal by Robert Sug-
den of certain assumptions within various theoretical frameworks in normative
economics. For Sugden, these frameworks often address the rules and recom-
mendations that they formulate to a sort of benevolent autocrat or dictator,
who is supposed to occupy no specifc position in the social sphere, hence
embodying what Sugden calls the view from nowhere. Hédoin frst ofers a
detailed examination of the three models of normative economics evaluated
in Sugden’s work: the model of the benevolent autocrat, the model of public
reasoning and, fnally, a contractarian model developed in part by Sugden him-
self. For Sugden, the frst two models are liable to the problem of assuming the
view from nowhere, which are then opposed to the third model, which relies
on the view from somewhere. The chapter shows that Sugden’s association
of the model of public reasoning with the view from nowhere is problematic
since most theorists working on the model of public reasoning adopt not the
view from nowhere but the view from everywhere. Hédoin illustrates this by
developing the social choice model of public reasoning and shows that while
this model is quite diferent from the model of the benevolent autocrat, it also
difers from Sugden’s contractarian model, especially when it comes to its con-
ception of the individual.
In the fnal chapter of this section, Seán Mfundza Muller examines how
the positive and the normative interact in contemporary experimental and
applied economics, especially in the works that utilise randomised control tri-
als (RCTs). It is shown that most economists who rely on RCTs adhere, in
their explicit pronouncements on the topic, to the distinction between posi-
tive and normative economics and present their experimental works as purely
positive and free from any normative assumptions. However, the chapter shows
that this is far from the case: various forms of highly contentious normative
assumptions intervene in diferent stages of what are presented as purely posi-
tive theories. For Muller, works relying on RCTs focus on a minimal set of
important social problems, that is, those that can be studied using such trials.
Moreover, by presenting such trials as the only valid method of fnding plau-
sible causal explanations, they disparage the value of qualitative evidence and
other methodological approaches in economics. The chapter then shows that
economists who use RCTs rarely acknowledge the reasons for focusing on
specifc social problems from very specifc perspectives. By analysing concrete
examples, Muller argues that a whole range of normative biases intervene in
these two steps. Such biases often turn the attention away from more structural
and systemic causes of these problems. He then concludes with a series of
observations regarding the consequences of the issues raised in the chapter for
the positive/normative distinction in economics.
The third section of the volume, which discusses the positive and the nor-
mative in economic thought from various philosophical perspectives, begins
with an analysis of the positive/normative with respect to the Marxian herit-
age of the Frankfurt School. Agnès Grivaux shows how the Critical Theory
of society developed by the Institute for Social Research of Frankfurt can be
18 Sina Badiei and Agnès Grivaux
interpreted as one of the frst attempts to strengthen the normative dimension
of the Marxian critique of capitalism and political economy. This interpretation
has sometimes been challenged by scholars who argue that the Frankfurt School
gradually abandoned its interest in positive economic studies and the critique
of political economy and devoted itself to a philosophical critique of instru-
mental rationality (Dubiel 1978). For Grivaux, this objection not only fails to
notice the infuence of several economists (Pollock, Mandelbaum, Meyer) on
the early Frankfurt School, but also overlooks the latter’s increased interest in
the evaluative and prescriptive aspects of economic theories and philosophy.
By re-reading the debates on state capitalism within the Institute for Social
Research, the author shows that the early Frankfurt School did not cast aside
positive social studies for a general philosophical critique of modernity and,
moreover, introduced numerous normative considerations within the Marxian
critique of political economy. Hence, the early Frankfurt School apprehends
the economic sphere from the perspective of the positive description of its
structure and through the prism of the norms that underlie it, which pave the
way for an immanent critique of these norms.
In the following chapter, Magdalena Małecka examines how discussions in
the philosophy of science regarding the role of values in scientifc activities can
infuence the positive/normative distinction in economics. The chapter starts
by examining various ways in which epistemic and non-epistemic values enter
scientifc activities and shows that this can happen at many diferent stages
of scientifc knowledge production. Małecka then ofers a critical appraisal
of economists’ attachment to the positive/normative distinction in its vari-
ous forms. She argues that debates on the role of values in science allow us to
see that the distinction between positive and normative economics, especially
regarding contemporary practices, cannot be taken for granted and requires
justifcation. In order to show why maintaining the distinction between posi-
tive and normative economics could have undesirable and problematic ramif-
cations, she analyses, as a case study, the historical evolution of expected utility
theory (EUT). It is shown that once it became increasingly clear that this the-
ory could not be used to explain or describe the behaviour of human beings,
economists started to present it as a normative theory, so as to avoid acknowl-
edging that it simply was not a theory of human behaviour. To understand
why this theory and debates in economics on the role of rationality in human
behaviour have had so much infuence, the fnal part of the chapter argues that
we should study the social and institutional context of Cold War politics and its
efects on the practices of economists.
The fnal chapter in the third section deals with the category of social prob-
lems and its surprising absence from discussions involving social ontology. Jesús
Zamora-Bonilla shows that this absence is far from contingent and reveals
important insights about how social ontologists have tried to grasp the nature
of social reality. For the author, this absence stems partly from the social scien-
tifc frameworks often used by social ontologists, notably rational choice the-
ory and game theory. It is shown that social problems can hardly be analysed,
 The Positive and the Normative 19
especially in their variegated forms, using these two theoretical frameworks.
This is why social ontologists should be open to the idea of using not only
alternative theoretical frameworks developed in other social sciences but also
philosophical insights within phenomenological approaches to social reality.
While the chapter mainly intends to show why paying more attention to social
problems can be fruitful for social ontology, it also attempts, in the fnal part, to
elucidate the consequences of this social-problem–based social ontology regarding
the distinction between the positive and the normative. For Zamora-Bonilla,
dealing with social problems requires using categories that are simultaneously
positive and normative. However, this does not mean that when social scientists
analyse these problems and ofer solutions, what they do cannot be objective
and employ highly refned empirical tools and methods of testing.
Most chapters of the volume thus argue that economics should pay far more
attention to the analysis of norms and values and their roles in social life. While,
according to some chapters, economics can become a more normative disci-
pline without abandoning the positive/normative distinction, other chapters
argue that economics cannot come to terms with its inherent value-ladenness
without renouncing the distinction. These disagreements show that although it
has become increasingly difcult to adhere to positivist defnitions of econom-
ics or even to a strict positive/normative separation, the exact form that a more
normative and less value-blind economics should take is still an open question.
This volume is thus an attempt to contribute to such debates. Various chapters
of the book show that practising economics on a more normative basis, instead
of undermining the objectivity of the discipline, allows it to become way more
refexive and objective and permits it to play a more constructive role in the
most important political, economic and social debates of our time.

Notes
1 This chapter and several other chapters of this book follow Hands on this point and
focus mainly on various forms of social norms that govern and structure the behaviour of
individuals and the form taken by social institutions. While examining epistemic norms
and values that govern scientifc and academic work is utterly important, the main aim
of this volume is to examine the role of non-epistemic norms in economics and the
role of economics with regard to such norms. Still, it is worth noting that epistemic
norms, especially those that govern the practice of scholars and scientists who work at
public institutions, are themselves a sub-category of social norms. This is why the discus-
sion of social norms may at various points touch upon epistemic norms, for example,
when certain epistemic norms are privileged to the detriment of other epistemic norms
because the former are mainly employed by scholars who belong to privileged social
categories. Examining this aspect of epistemic norms belongs to the broader analysis of
social norms, which exert their infuence on a variety of social spheres. Paolo Silvestri
ofers (2016) an illuminating appraisal of the formation of epistemic values and norms
in academic disciplines (mainly in economics and philosophy) and their often dogmatic
character. See Silvestri (2019) for another treatment of the relationship between ‘meth-
odological value judgements’ and ‘ethical value judgements’.
2 The position of J.N. Keynes is examined in a meticulous manner in the third chapter of
this volume.