Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 31

To the general public, economists seem to be completely confused. In many conversations, they bear the brunt of pointed jokes. Some of our favorites are:
1. If all economists in the world were laid end-to-end, they would never reach a decision.
2. How many economists does it take to change a lightbulb? Two-one to turn the bulb and one to say repeatedly, "Turn it the other way."
Positive Versus Normative Economics
These jokes convey the perception that economists never agree on anything. But that perception arises in part from an inability to differentiate between the positive and normative arguments that economists make. Economists (like everyone else) often disagree over political questions. They may, therefore, find themselves on opposite sides of controversial policy questions. Economists may also differ on empirical matters. For instance, they may disagree about whether a particular effect is large or small. But on basic theoretical questions, there is far less disagreement. Because most economists use the same tools, they tend to "speak the same language" and disagreements on positive questions are far less frequent.
Survey Results
This conclusion is supported by surveys of economists, a sample of which is described in Table 1. The table shows a high
degree of agreement among U.S., Swiss, and German economists about positive questions such as the effects of tariffs or of rent controls.1 There is considerably less agreement about broad normative questions, such as whether the government should redistribute income or act as the employer of last resort. For these types of policy questions, economists' opinions are affected by the same sort of political forces as are those of other citizens.2
As Table 1 shows, a significant majority of economists believe that tariffs reduce economic welfare. Yet many economists from low-income countries argue that without tariff protection their home industries will never develop to be competitive with the rest of the world. How can you reconcile these two views? Are these economists disagreeing about positive issues or normative ones?