Economics, Fairness & Measurement

Last week I heard Dr. Everett Piper speak.  Dr. Piper is President of Oklahoma Wesleyan University in Bartlesville Oklahoma.  Last year CBS Money Watch ranked Oklahoma Wesleyan as the best in the nation for the second year in a row.  It has also been ranked by U S News & World Report as one of the best liberal arts colleges in the Western Region.  Dr. Piper talked about the education approach at the school as being one based on established knowledge rather than individual opinion.  In fact, he said he tells students that he is not really interested in their opinion until they can demonstrate that they have learned the established knowledge of the subject area.  He pointed out that we cannot effectively “measure” something without a standard of measure separate from that we are trying to measure.

All of this reminded me of an economics course that I took in graduate school while working on an MBA.  My professor had a rather long reading list of published articles from which that I was required to read a representative number and demonstrate that I had done so with a term paper.  One of the leading issues among  economists in the ’60s & early ’70s concerned the proper role of economists giving advice on political affairs.  President Kennedy had given economists a greater role in helping to set national policy and many in the profession, buoyed by belief in Keynesian macro economic theory, believed that we could “control” our economy.  The debate was a question of whether the role of the economics profession in advising government leaders should be to merely forecast the economic results of proposed government legislation (positive economics) or to suggest legislation aimed at accomplishing what they believed would be desirable social outcome (normative economics).  In these discussion, the terms “value judgements”  and “objective facts” were used frequently.  Articles on both sides of this debate were published in learned journals under the general subject title, “Methodology and Ideological Responsibility”.

After wading through several of these articles on both sides of the debate, I wrote the following paper:

Methodology and ideological Responsibility:  Comment

It would seem that in the broad context all judgements are “value” judgements,  nothing being absolute and everything being relative.  In this context a reasonable definition of a “fact” might be something which can be observed and for which there existis an agreed-upon standard of measure  (agreed-upon  by the persons making the judicable observation)  This would seem to imply that for any analysis based on “facts” there must be a standard of measure.

The selection of a standard of measure clearly involves a value judgement.  But once the standard of measure has been selected (and agreed upon) a relatively objective judgement of the value of the variable can be made.  It would then follow that the difference between “posivtive” and “normative” (economics) is the difference between judging what the variable is and judging what it should be.  However, if the standard of measure is open to question, there can be nothing “positive”.

An ordered society is based on the people in that society holding common beliefs, values, mores, and customs, etc.  This basis tends to change over time (evolution).  The basis tends to constitute and agreed-upon standard of measure.  When the propensity to change brings about widespread questioning of all standards in order to force rapid change, the result is abolition of fact.  When fact is abolished, all argument or dsiscussion must, of necessity, be based on individual opinion and sentiment which is not open to logical refutation.  The resulting chaos would seem inevitable and evolution becomes revolution.

Since, in the broad context, this whole discussion is based on opinion; it doesn’t matter what you say, I’m right.

After I wrote this, I’m not sure I read many more articles for that course nor did I write any other paper, but I did make an “A” in the course.  A few years later, my professor still had a copy of my paper in his files and a fellow student asked for a copy which he subsequently used in a case study report in a graduate course in management.

Value judgements are inherent in judging “fairness”.  But if we are to measure “fairness” objectively then we need some agreed-to standards or criteria.  In the history of our country, I believe we had some common values in our culture that most people subscribed to.  Do we still today?

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About tjc13

BE - Chem Engineering, Vanderbilt Univ, MBA, University of Tulsa - Worked for an energy and chemical company for many years and then started a management consulting business working for both for-profit and not-for-profit organizations.
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