3.1.2.4 Examples of Multi-Dimensional Topics

As described on page 6 of the book Economics by Samuleson and Nordhaus, economists draw a distinction between two types of economics:

  • Governments exert economic power to create moral and political effects: so-called ‘normative economics’.
  • They cannot avoid consequences that can be quantified in financial terms: ‘positive economics’.

There is confusion in using the term ‘economics’ for both these aspects, sometimes leading to heated debate between economists about what constitutes good policy.  This book attempts to reduce the confusion by treating them in separate sections:

  • Welfare payments can be discussed in the context of levels of government spending (3.5.2), as a social benefit compared to relying on private charity (4.2.4.3), and as a question of political acceptability (6.7.1).
  • Measures to combat climate change can be considered in economic terms (3.5.7.1), as a moral issue (4.3.5.3), and as a political question about the extent to which people would support spending public money (6.7.5).
  • Assistance to people in other countries can also be considered from the economic (3.5.8), moral (4.3.5.1) and political (6.7.6) perspectives.

In this chapter, economic power is considered as a motivating force and as a numeric calculation; the moral and political aspects of its use are in later chapters.

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