As
aforementioned, competition criteria determine the economic operations of a
society. But on this theme of “criteria”, there are both economic analyses and
subjective, moral issues which bear no relationship to objective theoretical
analysis. These two have to be clearly differentiated.
We know
that under different criteria, winners and losers belong to different people.
Therefore, some people prefer a certain criterion while others prefer another
one. Such behavior falls into the sphere of economics. For instance, in school
examination, some students prefer essay questions to let them answer liberally,
while others prefer multiple choice questions believing their chances of
winning would then be higher. All behavior about choices falls into the realm
of economic analysis.
Which
criterion is good, or beneficial to social welfare, is a question of moral or
value judgment unrelated to objective analysis. For instance, as
aforementioned, since market price induces increased production, using it as a
competition criterion will not cause any wastage, while all other criteria must
to a certain degree lead to wastage. I did not, however, say increased
production is good or wastage is bad. Whether the criterion is good or bad can
only be determined by individual value judgment, or only God knows.
People’s
communes in former mainland China led to hard times of the people. The reason
why is a question of economic analysis. But whether having hard times is good
or bad is subjective judgment. Economics can explain human behavior, can
explain under what constraints people would suffer hunger and cold, yet it
cannot determine whether it is good or bad. “Cannot determine” here refers only
to economics but not economists. Let’s not forget economists are only human,
thus have their own value judgments. If I say suffering from hunger and cold is
a bad thing, is no good, I am expressing my subjective view from a human’s
standpoint which is not based on objective economic analysis. Certainly, I have
every right to hold such a subjective view since I have the right of a human,
though no training in economics is needed for the possession of this right.
I can
express my value judgment. Other people can likewise do so. Nevertheless, only
God knows whose value judgment is more correct or more commendable. The
expression of value judgment does not require analytical training. You may like
blue color while I prefer red. Who can make a convincing judgment on which is
more preferable? You may say government providing assistance on education is a
good thing while I believe it to be bad. No conclusion on good or bad can be
drawn even if we debate for years, since no scientific analysis can reach an
objective consensus on good or bad, like or dislike.
If I say
suffering from hunger and cold is no good, is a bad thing, most people would
agree. This is only due to most (may even be all) people not preferring
themselves suffering from hunger and cold. Everyone agrees because the same
value judgment is shared rather than because of objective analysis. Economics
can explain why people suffer from hunger and cold, explain what effects
governmental assistance have on education, but cannot make judgment on the
issue of good or bad.
As
aforementioned, economists are only human who have their own value judgments.
However, when examining an issue, they might intentionally or unintentionally
state whether certain outcome is good or bad. Though there is nothing wrong
when subjective preferences are associated with objective analysis, it may
sometimes confuse the audience. Of essence is that people undertaking economic
analysis have to clearly distinguish subjective matter from objective one, and
never let subjective judgment affect objective analysis. If an economist considers
governmental assistance on education is good (subjective judgment), and then
distort his analysis intentionally or unintentionally to fall outside logical
bounds, this is what science forbids.
At times,
some economist has not stated whether something is good or bad, yet others
interpret that he has done so. For instance, when I say using market price as a
criterion can increase production, many readers might interpret that I mean
using market price as a criterion is good. Yet not that have I said. Readers
believe I have said so because they themselves think increasing production is
good. Certainly, to avoid monotony when writing newspaper articles, I would
occasionally express my personal view on good or bad. The focus of this book,
however, is objective economic explanation.
Many
readers consider that I embrace the market and have a particular penchant for
it. True is my belief in the capabilities of the market, though I also know
very well the market’s incapabilities. My personal value judgment is against
the market as well as communism, since under both of these it is hard for me to
stand out above the rest. My personal preference is using examination results
to determine the allocation of wealth in the society, as I could excel under
whatever examination criteria. Unfortunately, nowhere in the world today uses
examination results to allocate wealth or pretty women. (The national
“zhuangyuan” examination in ancient China indeed has the effect of wealth
allocation, yet who knows if I could be at the very top!)
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