In this article, we are going to discuss the Positive vs Normative Statements.
Positive Statements vs Normative Statements
In general, statements about the world are of two types. One type, such as is positive. Positive statements are descriptive. They make a claim about how the world is.
The second type of statement is normative. Normative statements are prescriptive. They make a claim about how the world ought to be. It’s just an matter of an opinion.
A key difference between positive and normative statements is how we judge their validity. We can, in principle, confirm or refute positive statements by examining the evidence.
To help clarify the two roles that economists play, we begin by examining the use of language.
Because scientists and policy advisers have different goals, they use language in different ways.
For example, suppose that two people are discussing minimum-wage laws. Here are two statements you might hear:
POLLY: Minimum-wage laws cause unemployment.
NORMA: The government should raise the minimum wage.
Ignoring for now whether you agree with these statements, notice that Polly and Norma differ in what they are trying to do.
Polly is speaking like a scientist: She is making a claim about how the world works.
Norma is speaking like a policy adviser: She is making a claim about how she would like to change the world.
An economist might evaluate Polly’s statement by analyzing data on changes in minimum wages and changes in unemployment over time.
By contrast, evaluating normative statements involves values as well as facts.
Norma’s statement cannot be judged using data alone. Deciding what is good or bad policy is not merely a matter of science. It also involves our views on ethics, religion, and political philosophy.
Of course, positive and normative statements may be related. Our positive views about how the world works affect our normative views about what policies are desirable.
Polly’s claim that the minimum wage causes unemployment, if true, might lead us to reject Norma’s conclusion that the government should raise the minimum wage.
Yet our normative conclusions cannot come from positive analysis alone.
Instead, they require both positive analysis and value judgments.
As you study economics, keep in mind the distinction between positive and normative statements. Much of economics just tries to explain how the economy works.
Yet often the goal of economics is to improve how the economy works.
When you hear economists making normative statements, you know they have crossed the line from scientist to policy adviser.
Summary of Positive vs Normative Statements
A positive statement is an assertion about how the world is.
On the other hand, A normative statement is an assertion about how the world ought to be.
When economists make normative statements, they are acting more as policy advisers than scientists.