In this section, our goal is to establish that mainstream economic theory is committed to three norms which serve to make scarcity the central economic problem. We also sketch a history of how these norms were adopted in economic methodology. The first of these three is a commitment to private property; the political nature of this commitment is clear from the existence of societies with radically different notions of property. The second is a methodological decision not to investigate the formation of tastes. This demarcates a discipline boundary, and is a methodological norm. We are defining what a economist should and should not study, and textbooks argue that this is the proper role of an economist. The third pillar is the equation of welfare with preference satisfaction. This means that economists should try to satisfy preferences of all members of the society. Before proceeding, it is important to clarify that we use norms in a much broader sense than just “ethics” or “morality.” Also, the significance of examining the history of thought requires some justification, presented below.
Why study history of thought? The positivist view of science as a collection of universal truths, arrived at by logical deductions from indisputable facts, allows no role for history. Closer examination reveals that the “under-determination” of theories by observations is ubiquitous; see Rashid (2009) for an illuminating discussion. When a variety of theories fit all available observations, choice among them must be made on other grounds. Kuhn (1970, p. 4) writes that “an apparently arbitrary element, compounded of personal and historical accident, is always a formative ingredient of the beliefs espoused by a given scientific community at a given time.” It is in light of this non-positivist understanding that it is useful to examine the history of thought. It highlights the historical contingency of apparently universal truths.
The definition of social norms: In order to function, every society must reach agreement on many issues, including ethical, social, political and legal structures. The set of implicit and explicit agreements as to how the society will be governed, how disputes will be settled, which types of education will be recognized as entitlements to jobs, which side of the road to drive on, behaviors which will be approved and those which will be subject to social or legal sanctions, etc. can all be termed part of the “social contract.” Universally agreed upon elements of the social contract form part of the foundational framework in which discussions are carried out, and often remain unexamined. Putnam (2002) has emphasized that social norms (all elements of the social contract) include judgments about relative aesthetic values of different scientific theories, agreements about methodological principles, and are not restricted to ethics and morality, the traditional areas covered by the Ten Commandments.
3.2 De Gustibus non est Disputandum. [Tastes cannot be disputed]