Posted on: February 1, 2021
Joan Robinson: a voice for our times
By Sheila Dow, author of the foreword to the Routledge Classics edition of Economic Philosophy, Joan Robinson
It is a sign of the times that an economist and former Governor of the Bank of England, Mark Carney, should choose the topic of value and values for the 2020 Reith Lectures. He was tapping into something important at the heart of public discourse during the Covid pandemic. Circumstances have forced us to step back from normal habits of thought as well as of ways of living. We have been jolted into reflecting more deeply on what we value in life and how far our priorities correspond to those of the market: pay scales for different types of worker, the relative priority placed on health and the economy, the distribution of support provided by the state, the relative responsibility of the state, businesses, charities and the individual, and so on.
Are values a proper subject for an economist? Absolutely. This was the view of the Cambridge economist Joan Robinson, whose remarkable Economic Philosophy (1962) addresses head on the core role in economics, not only of value, but also of values. A member of the pantheon of great economists of the twentieth century, Robinson had at an early stage made a major impact on the profession with her first book, The Economics of Imperfect Competition (1933). But her most important contributions were grounded in the Keynesian revolution, promoting Keynes’s ideas and extending them, e.g. to apply to the long run, while critiquing the prevailing orthodoxy. She made numerous, wide-ranging, seminal contributions, from The Accumulation of Capital (1956) to her later focus on expectations and uncertainty, and to her focus in Economic Philosophy on the methodology of economics. Her controversial views may have cost her the Nobel Prize for Economics, which many thought she would surely win. Yet her profound insights are increasingly attracting attention, being highly relevant to modern concerns over economics, the economy and society.
In Economic Philosophy Robinson explores the development of economic thought on the concept of value. Economics generally focuses on those matters in life, and thus value, which can be measured in money terms. Where something is not priced, such as care within the family, it tends to fall out of the picture, yet the pandemic has underlined its value. Economics has increasingly extended its reach in various fields by aiming to assign monetary value to non-marketed goods and services. But contemplating climate change is just one example which demonstrates how limited the scope for this may be. Climate scientists and ecologists know a great deal about the forces at work. But the ecosystem is so complex, and evolves in such unpredictable ways (not least in its interaction with the socio-economic system), that any attempt to put monetary value on future states is bound to be subject to huge uncertainty.
While much of economics is concerned with value in some form, at the same time mainstream economics presents itself as unconcerned with values, or moral principles; i.e. a technical discipline. Values are then simply something for others, like governments, to apply to the conclusions of economic theory after the fact. Yet it has become increasingly clear that economists do apply values. For example the dominant theoretical system justifies market-set pay scales, such as those for CEOs and care-home workers, as the best way of meeting the goal of maximising social welfare. There is huge scope for debating what social welfare entails. But further, even setting a goal in terms of a particular level of welfare reflects a set of values which privileges that goal over the means by which it is achieved.
Joan Robinson’s Economic Philosophy argues that values are embedded in all of economics, whether acknowledged or not: ‘economics … has always been partly a vehicle for the ruling ideology of each period as well as partly a method of scientific investigation’. Whatever ideology economics applies should therefore be brought to the surface and debated. But because she did just that with respect to her own work, Robinson was side-lined precisely for being ideological, understood as a rejection of science. The presentation of mainstream economics as the most scientific approach thus reinforced its dominance over the discipline.
Joan Robinson’s term ‘ideology’ nowadays can imply a party-political embodiment of values, but her arguments applied to values in their more general sense. She argues that societies (and thus economies) can only function effectively with some shared views as to how affairs should be conducted. So values are embedded in what economists analyse. Thus for example she argues that individual choice is influenced by values, i.e. by conscience, rather than simply by rational self-interest. The same applies to economists. The questions they pursue and the way they approach them are not matters simply of pure reason but rather also the product of values. Robinson explains how principles such as ‘all people are equal’, are open to all sorts of interpretation, only a few of which allow for measurement and thus empirical testing. While this kind of statement is metaphysical, nonetheless the way economists interpret it is foundational for the research agendas it sparks off.
So when Robinson argues that economics is part ideology and part science the two are not fully separable and indeed ideology has to come first to motivate and frame theory. She argues further that the basic concepts economists use, such as value and utility, are themselves metaphysical. Indeed scientific method itself involves metaphysics since there is no agreement on definitive testing of theory – much must then depend on judgement.
The mainstream-economics claim to be the most scientific approach simply reflects judgement on the basis of a particular set of scientific values, but a judgement which wields undue power if it is thought to be value-free and incontestable. Other approaches address the same reality with different scientific values. All are trying to come up with the best account of that reality in terms of their own values. But rather than economists retreating into silos, big or small, society would benefit if economists of all approaches were more open to critical debate. This requires all parties to be open about their values and how these values underpin theoretical systems. It also requires all to be self-aware in terms of the limits to their own knowledge systems, and thus to be humble about the scope of their own theories.
Most economists want to make the world a better place, but this is metaphysical, open to all sorts of meanings. Robinson’s line of argument shows that this recognition is not the end of debate, but rather sets the terms for the start of debate. On the one hand ‘anything goes’ means that science is hopeless and yet on the other hand truth cannot be categorically demonstrated. Robinson concludes that ‘we must find a way through’. Her career is an exemplar of a way through by engaging in debate, grounded in the thinking set out in Economic Philosophy.