Economic Normativity: The Case of the Budget Constraint

Abstract

In contrast to the dominant way of thinking in economics, in which economics is seen as a positive or neutral science, this paper argues that economics is a discipline that has its own normativity. This economic normativity should be distinguished from what is usually considered as ethics, which normally has a broader scope (e.g., stewardship). This paper further argues that the budget constraint is a key source of economic normativity, although it is not the only source. Economic-theoretical and philosophical aspects are discussed, and consequences for economic life and policy are assessed.