2. Knowledge and Value

0:00CHAPTER 2 KNOWLEDGE AND VALUE 1. THE BIAS DOCTRINE The accusation of bias has been leveled against economists long before Marx integrated it into his doctrines. Today it is fairly generally endorsed by writers and politicians who, although they are in many respects influenced by Marxian ideas, cannot simply be considered Marxians. We must attach to their approach a meaning that differs from that which it has in the context of dialectical materialism. We must therefore distinguish two varieties of the bias doctrine, the Marxian and the non-Marxian.

0:45The former will be dealt with in later parts of this essay in a critical analysis of Marxian materialism. The latter alone is treated in this chapter. The scholars of both varieties of the bias doctrine recognized that their position would be extremely weak if they were merely to blame economics for an alleged bias without charging all other branches of science with the same fault. Hence, they generalized the bias doctrine, but this generalized doctrine we need not examine here. We may concentrate upon its core, the assertion that economics is necessarily not vertrei, but is tainted by prepossessions and prejudices rooted in value judgments. For all arguments advanced to support the doctrine of general bias are also resorted to in the endeavors to prove the special bias doctrine that refers to economics, while some of the arguments brought forward in favor of the special bias doctrine are manifestly inapplicable to the general doctrine.

1:45Some contemporary defenders of the bias doctrine have tried to link it with Freudian ideas. They contend that the bias they see in the economists is not conscious bias. The writers in question are not aware of their prejudgments and do not intentionally seek results that will justify their foregone conclusions. From the deep recesses of the subconscious, suppressed wishes unknown to the thinkers

3:10The most sophisticated psychoanalytical examination of Pascal's life tells us nothing about the scientific soundness or unsoundness of his mathematical and philosophical doctrines. If the failures and errors of a doctrine are unmasked by discursive reasoning, historians and biographers may try to explain them by tracing them back to their author's bias. But if no tenable objections can be raised against a theory, it is immaterial what kind of motives inspired its author.

4:00Granted that he was biased, but then we must realize that his alleged bias produced theorems which successfully withstood all objections. Commitment to a thinker's bias is no substitute for a refutation of his doctrines by tenable arguments. Those who charge the economists with bias merely show that they are at a loss to refute their teachings by critical analysis. Common Wheel vs. Special Interests Economic policies are directed toward the attainment of definite ends. In dealing with them, economics does not question the value attached to these ends by acting men. It merely investigates two points.

4:46First, whether or not the policies concerned are fit to attain the ends which those recommending and applying them want to attain. Secondly, whether these policies do not perhaps produce effects which, from the point of view of those recommending and applying them, are undesirable. It is true that the terms in which many economists, especially those of the older generations, expressed the result of their inquiries could easily be misinterpreted. In dealing with a definite policy, they adopted a manner of speech which would have been adequate from the point of view of those who considered resorting to it in order to attain definite ends. Precisely because the economists were not biased and did not venture to question the Acting Men's Choice of Ends, they presented the result of their deliberation in a mode of expression which took the valuations of the actors for granted.

5:42People aim at definite ends when resorting to a tariff or decreeing minimum wage rates. When the economists thought such policies would attain the ends sought by their supporters, they called them good, just as a physician calls a certain therapy good because he takes Makes the End, Curing His Patient, for Granted One of the most famous of the theorems developed by the classical economists, Ricardo's Theory of Comparative Costs, is safe against all criticism if we may judge by the fact that hundreds of passionate adversaries over a period of 140 years have failed to advance any tenable argument against it. It is much more than merely a theory dealing with the effects of free trade and protection.

6:28It is a proposition about the fundamental principles of human cooperation under the division of labor and specialization and the integration of vocational groups, about the origin and further intensification of social bonds between men, and should as such be called the law of association. It is indispensable for understanding the origin of civilization and the course of history. Contrary to popular conceptions, it does not say that free trade is good and protection bad. It merely demonstrates that protection is not a means to increase the supply of goods produced. Thus, it says nothing about protection's suitability or unsuitability to attain other ends. for instance, to improve a nation's chance of defending its independence and war.

7:19Those charging the economists with bias refer to their alleged eagerness to serve the interests. In the context of their accusation, this refers to selfish pursuit of the well-being of special groups to the prejudice of the common wheel. Now it must be remembered that the idea of the common wheel in the sense of a harmony of the Interests of All Members of Society is a modern idea, and that it owes its origin precisely to the teachings of the classical economists. Older generations believe that there is an irreconcilable conflict of interests among men and among groups of men. The gain of one is invariably the damage of others. No man profits but by the loss of others.

8:06You may call this tenet the Montaigne dogma because in modern times it was first expounded by Montaigne. It was the essence of the teachings of mercantilism and the main target of the classical economists' critique of mercantilism, to which they opposed their doctrine of the harmony of the rightly understood or long-run interests of all members of a market society. The socialists and the interventionists reject the doctrine of the harmony of interests. The socialists declare that there is irreconcilable conflict among the interests of the various social classes of a nation. While the interests of the proletarians demand the substitution of socialism for capitalism, those of the exploiters demand the preservation of capitalism.

8:53The nationalists declare that the interests of the various nations are irreconcilably in conflict. It is obvious that the antagonism of such incompatible doctrines can be resolved only by logical reasoning, but the opponents of the Harmony Doctrine are not prepared to submit their views to such examination. As soon as somebody criticizes their arguments and tries to prove the Harmony Doctrine, they cry out bias. The mere fact that only they and not their adversaries, the supporters of the Harmony raise this reproach of bias shows clearly that they are unable to reject their opponent's statements by radiosenation they engage in the examination of the problems concerned with the prepossession that only biased apologists of sinister interests can possibly contest the correctness of their socialist or interventionist dogmas in their eyes the mere fact that a man Man disagrees with their ideas is the proof of his bias.

9:57When carried to its ultimate logical consequences, this attitude implies the doctrine of polylogism. Polylogism denies the uniformity of the logical structure of the human mind. Every social class, every nation, race, or period of history is equipped with a logic that differs from the logic of other classes, nations, races, or ages. Hence, bourgeois economics differs from proletarian economics, German physics from the physics of other nations, Aryan mathematics from Semitic mathematics. There is no need to examine here the essentials of the various brands of polylogism. For polylogism never went beyond the simple declaration that a diversity of the mind's logical structure exists.

10:47It never pointed out in what these differences consist. For instance, how the logic of the proletarians differs from that of the bourgeois. All the champions of polylogism did was to reject definite statements by referring to unspecified peculiarities of their authors' logic. 3. ECONOMICS AND VALUE The main argument of the classical harmony doctrine starts from the distinction between Interests in the short run and those in the long run, the latter being referred to as the rightly understood interests. Let us examine the bearing of this distinction upon the problem of privileges.

11:33One group of men certainly gains by a privilege granted to them. A group of producers, protected by a tariff, a subsidy, or any other modern protectionist method against the competition of more efficient rivals, gains at the expense of the consumers. But will the rest of the nation, taxpayers and buyers of the protected article, tolerate the privilege of a minority? They will only acquiesce in it if they themselves are benefited by an analogous privilege. Then everybody loses as much in his capacity as consumer as he wins in his capacity as producer. Moreover, all are harmed by the substitution of less efficient for more efficient methods of production.

12:18If one deals with economic policies from the point of view of this distinction between long and short-run interests, there is no ground for charging the economist with bias. He does not condemn feather-bedding of the railroadman because it benefits the railroadman at the expense of other groups whom he likes better. He shows that the railroad men cannot prevent featherbedding from becoming a general practice and that then, that is, in the long run, it hurts them no less than other people. Of course, the objections the economists advanced to the plans of the socialists and the interventionists carry no weight with those who do not approve of the ends which the peoples of Western civilization take for granted.

13:03Those who prefer penury and slavery to material well-being and all that can only develop where there is material well-being may deem all these objections irrelevant. But the economists have repeatedly emphasized that they deal with socialism and interventionism from the point of view of the generally accepted values of Western civilization. The socialists and interventionists not only have not, at least not openly, denied these These values, but have emphatically declared that the realization of their own program will achieve them much better than will capitalism. It is true that most socialists and many interventionists attach value to equalizing the standard of living of all individuals. But the economists did not question the value judgment implied.

13:53All they did was to point out the inevitable consequences of equalization. They did not say, the end you are aiming at is bad. They said, realization of this end will bring effects which you yourselves deem more undesirable than inequality. 4. BIAS AND INTOLERANCE It is obvious that there are many people who let their reasoning be influenced by judgments of value and that bias often corrupts the thinking of men. What is to be rejected is the popular doctrine that it is impossible to deal with economic problems without bias and that mere reference to bias without unmasking fallacies in the chain of reasoning is sufficient to explode a theory.

14:43The emergence of the bias doctrine implies in fact categorical acknowledgement of the impregnability of the teachings of economics against which the reproach of bias has been leveled. It was the first stage in the return to intolerance and persecution of dissenters, which is one of the main features of our age. As dissenters are guilty of bias, it is right to liquidate them.