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Hilary Putnam and Vivian Walsh (eds.), The End of Value-Free Economics

Nuno Ornelas Martins
p. 514-519
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Hilary Putnam and Vivian Walsh (eds.), The End of Value-Free Economics, Routledge, 2011, 229 pages, ISBN 978-0415665162

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1This book develops the thesis that there has been a revival of classical political economy in two stages, the first stage centered around the contributions of Piero Sraffa, and the second stage centered around the contributions of Amartya Sen. In so doing, it elaborates a perspective of economics where, as in classical political economy, facts, theories and values are entangled in complex ways, and cannot be neatly separated. The book contains a collection of articles published in the Review of Political Economy, by Vivian Walsh, Hilary Putnam, Amartya Sen, Martha Nussbaum, and Harvey Gram, together with new chapters by the editors. All these contributions address the central theme of the book, which is a coherent, insightful and extremely important contribution.

2The book starts with an Introduction by Hilary Putnam and Vivian Walsh. They focus on the great influence of logical positivism on mainstream economics, which led to the attempt to separate facts from values. The perspective of Lionel Robbins, and the belief that interpersonal comparisons of utility are value judgments that must be separated from the facts of economic science, are indeed often seen as a consequence of logical positivism (although the authors argue that Robbins, like mainstream economists in general, never really understood the philosophical foundations of logical positivism). The authors suggest that we abandon the separation between facts, theories and values.

3Chapter 2 is Vivian Walsh’s article “Smith after Sen”, where Amartya Sen’s rejection of a value-free economics is presented, and sets the context for exposition of the revival of classical political economy addressed in the book. Sen’s contribution is interpreted as a second stage of the revival of classical political economy, in which the central aim is the revival of the moral anthropology of classical political economists like Adam Smith and Karl Marx. Sen achieves this through his writings on agency (and his explanation of human rationality) and on human well-being, which led to the development of the capability approach. The first stage of the revival was Piero Sraffa’s development of an economic theory centered on the reproduction and allocation of the economic surplus, centered on the more analytical and technical issues, rather than on moral issues. Walsh notes that the contributions of Bertram Schefold, and especially the contributions of Luigi Pasinetti, constitute examples of authors engaged in the first stage of the revival of classical political economy who have recently addressed aspects of the second stage with which Sen is concerned, by focusing on human needs.

4Chapter 3 is Walsh’s article “Sen after Putnam”, and constitutes the central chapter of the book. Here the two stages of the revival of classical political economy are explained in more detail, together with the entanglement between facts, theories and values. The relationship between the fact/value dichotomy and the (Kantian) analytical/synthetic dichotomy is addressed, and the contribution of Willard Van Orman Quine (who was influenced by the American pragmatists) for the fall of the latter dichotomy is explained. Carnap’s attempt at reducing hypothesis selection to an algorithm is found to be a failure, since theory selection always presupposes values. Mainstream economists, and the development of the neo-Walrasian Arrow-Debreu model, failed to see this. The Arrow-Debreu model was itself selected by the mainstream community due to the epistemic values that underpinned logical positivism and the mathematical formalist approach of those days. However, the entanglement of facts, theories and values occurs in economics too, and must be taken into account, as Sen does, much influenced by Maurice Dobb, who remained unaffected by logical positivism.

5A central claim of the book, which appears in this chapter too, is that the surplus must be used in productive activities, rather than in luxurious consumption. This is a claim that goes back to Adam Smith, as Walsh notes, and to the Physiocrats, who were in favour of faste de subsistance, but against luxe de décoration. When developing this claim, Walsh combines Pasinetti’s (and Schefold’s) development of Sraffa’s classical approach with Sen’s capability approach. The classical authors defined the surplus in terms of the difference between total production and the subsistence wage, which included not only the necessaries that are essential to physical and biological subsistence, but also the conveniences that are customary in a given society, as Ricardo notes. Walsh elaborates this broad notion of subsistence, and argues that basic commodities should be defined not just in terms of physical survival, but rather in terms of Sen’s “capabilities”, that is, potential functionings (or “achievements” to use the term adopted by Walsh when developing, independently from Sen, a similar concept). This classical idea was recovered only in the second stage of the revival of classical political economy, where moral issues are explicitly addressed. The chapter ends with a discussion on moral philosophy, contrasting Aristotle’s approach, which inspired Sen’s and Nussbaum’s capability approach, to Plato’s and Kant’s. According to Walsh, the perspective of Plato, and that of Kant too, seem to imply that the moral will is invulnerable to the contingencies of the empirical world. This stands in contrast with the perspective of Aristotle who, like Greek tragedy in general, saw how morality depends on what Sen and Nussbaum would later call the human capability to function.

6Chapter 4, written by Hilary Putnam, elaborates the critique of the fact/value dichotomy, advocating the entanglement of facts and values in connection with Sen’s contribution. Putnam notes how logical positivists, who contributed to a separation between facts and values, faced difficulties when defining facts. Indeed, as Quine has shown, the conventions adopted are essential to understanding facts.

7Putnam also argues that Nussbaum’s adoption of a “political conception” (using John Rawls’ term) confuses questions of moral principles with questions of political tactics. Indeed there need be no “overlapping consensus” on a list of capabilities such as Nussbaum’s list. Putnam also criticizes Habermas’ dichotomy between values and norms, noting that Habermas’ ideal speech situation is empty without thick (entangled) ethical conceptions, which provide content to norms.

8Chapter 5, written by Martha Nussbaum, starts with a discussion on truth and objectivity, where Nussbaum explains the role Aristotle played in developing the capability approach in connection with Sen and Putnam. She distinguishes the ethical sphere from the political sphere, under the influence of Rawls. Given the existence of a plurality of value conceptions, many of which are reasonable, it is important to attempt to achieve political consensus, which is only possible through a partial moral conception which concerns itself only with certain freedoms, such as basic capabilities, leaving other issues (where consensus cannot be easily achieved) aside. Nussbaum also addresses Walsh’s discussion of tragic choices, noting that tragic situations invite us to try to avoid similar situations in the future. She also notes that Sen removed primary goods from the Rawlsian structure (replacing it with capabilities) but did not address the remaining Rawlsian structure. Nussbaum finishes noting that Sen’s recent work tends to focus on freedoms in general, and she argues in favour of Sen’s earlier distinction between basic capabilities and gross luxuries, a distinction which Walsh stresses.

9Chapter 6 is written by Harvey Gram, and addresses again the revival of classical political economy, while explaining how classical theory, Keynesian theory, and Sen’s capability approach can complement each other. Gram notes that in classical theory, the distribution between real wages and profits is determined independently of the level and composition of outcome. Distribution and output are taken as independent data that determine prices. This means that there is space for a theory of output determination, such as the Keynesian theory of effective demand (which explains the level of output), and for an ethical theory of how distribution should be made (and what goods should be produced), such as Sen’s capability approach. In neoclassical theory, in contrast, the distribution of income and the composition of output are explained simultaneously through supply and demand analysis, leaving no space for Sen’s capability approach.

10Chapter 7 is written by Amartya Sen, who notes the great influence that Maurice Dobb’s notion of “rich description” had on his own work. Sen argues that, for Dobb, the labour theory of value and related descriptions need not be seen as ethical theories, or as predictive theories. Sen notes that ethical values are not the only kind of values that exist, and that the selection we perform when engaging in description need not be guided by ethical values. Sen also notes that although not everyone must share exactly the same sense of justice, there must be, however, a shared comprehension of what justice is, and thus an understanding of the objectivity of justice is required. The fact that our understanding of justice depends upon established conventions need not mean that such an understanding depends only upon approval by others.

11Chapter 8 is written by Hilary Putnam and Vivian Walsh, and addresses the writings of Partha Dasgupta, which are interpreted as a contribution to economics in which there is an entanglement of facts, theories and values in the study of destitution. Putnam and Walsh argue that Dasgupta is, together with Joseph Stiglitz, Peter Hammond, John Roemer, and others, part of a group of reformers who intend to transform mainstream economics into a more relevant discipline. They, note, however, that Dasgupta does not distance himself from mainstream economics as obviously as other reformers such as Stiglitz, and that Dasgupta would benefit much by distancing himself from mainstream economics, rather than attempting to remain within the Arrow-Debreu tradition, which Dasgupta supports.

12Chapter 9, written by Vivian Walsh, further elaborates the topic of the second stage of the revival of classical political economy, brought about by Sen. Walsh discusses Sen’s conception of rationality (in which rationality consists in scrutinizing goals and values, rather than following a preference ordering), and Sen’s critique of the mainstream conception of rationality. In this critique, Sen notes that preferences may be incomplete, and develops a conception of maximization which takes into account incomplete preferences. Sen focuses not just on rational choice theory, but also on social choice theory, and the difficulties that emerge in the latter field, such as Arrow’s impossibility theorem. The difficulties surrounding Arrow’s impossibility theorem can however be overcome by enriching social choice theory, as Sen shows. But social choice procedures, such as majority voting, must not lead to the oppression of a minority (whose basic capabilities must be assured) by the majority. Walsh also notes that while Rawls was concerned with an ideal society, he was moving towards a similar direction as Sen concerning basic capabilities, within a conception where facts, theories and values are entangled.

13Chapter 10, written by Hilary Putnam and Vivian Walsh, draws the implications of the entanglement of facts, theories and values for welfare economics. They argue that welfare economics can no longer be seen as a separate science. They also argue that neoclassical economics is grounded on the discredited philosophy of logical positivism, and can no longer maintain its pretensions to be scientific according to a positivist criterion which has been superseded within philosophy. The significance of Sen’s contributions springs from the fact that Sen moves beyond the positivist straightjacket.

14Chapter 11, again written by Hilary Putnam and Vivian Walsh, draws the implications of the fall of the fact/convention dichotomy, and the fall of the fact/value dichotomy, for economics. As Quine has shown, the selection of a theory depends upon conventions, and thus the fact/convention dichotomy does not hold. But something Quine did not see, unlike Putnam, is that this implies that the fact/value dichotomy cannot hold too, since the selection of a theory depends not only upon previous conventions, but also upon values (and Quine indeed discusses epistemic values like elegance and conceptual economy). This happens in physics, and also in economics, where a macro-theory of capabilities (where increased fulfillment of vital human capabilities counts as growth, as in Pasinetti’s approach) is needed. Now that mainstream economic theory and policy is widely discredited, an opportunity arises for the development of the revival of classical political economy in its two stages.

15This book constitutes a most important contribution, especially in a moment where economics desperately needs a change. The argument that the allocation of the surplus should be made in order to promote productive labour, rather than wasteful luxurious consumption, goes back to Adam Smith and the Physiocrats, but is still more relevant than ever, and brings immediately ethical issues into mind, not least because distribution is not predetermined in the classical scheme as developed by Sraffa (contrarily to what happens in neoclassical theory). This leaves the door open for ethical considerations, such as those suggested by Sen’s capability approach.

16When addressing ethical issues, there is one important question that deserves further scrutiny, concerning the role of description. Sen warns us that not all values are ethical values, and indeed descriptions of human well-being need not be driven by prescriptive motives, nor for predictive purposes, as Sen learned from Dobb. Putnam seems to take this into account, since he also refers to epistemic (and aesthetical) values, (and not just to ethical values). But the issue certainly deserves further discussion, especially in connection to the second stage of the revival.

17The first stage of the revival, in turn, seems to be presented as being mostly completed. Indeed, Walsh notes that the authors that contributed to it, like Pasinetti and Schefold, are now moving towards a line of research that contains characteristics of the second stage, and no other contributions to the first stage of the revival are discussed other than Pasinetti’s and Schefold’s (which are, of course, extraordinarily important). However, the contributions of Sraffa, who brought about the first stage of the revival, have been (and are still being) interpreted in various ways by many other authors (not least in connection to Sraffa’s unpublished papers), and thus the first stage of the revival is not completed yet. And the fact that other authors developing the first stage of the revival did not engage in ethical considerations too need not be seen as a disadvantage when taking those other contributions into account, for this only leaves more degrees of freedom for combining those other contributions too with Sen’s capability approach.

18I have learned enormously from reading this book, and I believe it is an outstanding contribution for a change in economics. And it teaches us that to achieve a more relevant economics we need not start out of nothing. For much of the work to be done has already been developed by the classical authors, and by those who studied their contributions. Those contributions deserve wide readership. And so does this book.

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Nuno Ornelas Martins, « Hilary Putnam and Vivian Walsh (eds.), The End of Value-Free Economics »Œconomia, 3-3 | 2013, 514-519.

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Nuno Ornelas Martins, « Hilary Putnam and Vivian Walsh (eds.), The End of Value-Free Economics »Œconomia [En ligne], 3-3 | 2013, mis en ligne le 01 janvier 2014, consulté le 25 janvier 2021. URL : ; DOI :

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Nuno Ornelas Martins

University of the Azores and Centro de Estudos em Gestão e Economia

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