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Value judgement

A statement of opinion or belief which is not capable of being falsified by comparison with fact. It is, therefore, essentially a normative rather than a positive statement. Thus, the statement ‘unemployment sbould not exist’ is a value judgement, while the statement ‘Unemployment does not exist’ is not. In economics the desirability of the clear distinction of value judgements from positive analysis is always stressed. Where the object is to understand and make predictions about actual economic phenomena, opinions and beliefs may only obscure the issues, e.g. if one is trying to analyse the role of excess profits in the mechanism of resource allocation in a free market economy or to predict the consequences of a 45 per cent corporation tax on this process, it helps to put to one side one’s belief that profits are iniquitous or virtuous. This is not to say, however, tbat economists should not make value judgements, or make prescriptions about the objectives of economic policy. Indeed, some of the most successful ‘positive’ econo­mists have been the most vocal advocates of particular policy object­ives, e.g. J. M. Keynes and M. Friedman. Rather, it is simply to argue that value judgements must not be allowed to obscure analysis of what is, as opposed to what ought to be. This is, in essence, simply part of scientific method, but is something which is especially difficult to achieve in economics.

Reference: The Penguin Dictionary of Economics, 3rd edt.