On the Quantity Bias in Economics

Abstract

Much has been written in recent years about the undue (and potentially adverse) emphasis of orthodox economics on GDP growth. Far less attention has been paid to the growing quantity bias in orthodox economics, and to the ever increasing fascination in broader society with numbers and quantitative data. We contend that the GDP growth bias is inextricably linked to the quantity bias and, moreover, that orthodox economics has catalyzed and reinforced this relationship of cumulative causation. In this context, we find instrumental valuation to be important both in helping identify the quantity bias and in critically analyzing and evaluating it.

Keywords:

• economic methodology
• instrumental value
• orthodox economics
• quantitative bias
• quantitative measure

JEL Classification Codes:

• B41
• B50
• B52

Notes

¹ While we take for granted that the perceived imperative for GDP growth in economics is problematic from both a social and ecological perspective, it is not our purpose here to argue the point. The literature on this is abundant, and reflects many different perspectives (see, for example, Cobb and Halstead 1994; Daly 1991; Hirsch 1976).

² According to Robert Nadeau (2008), Jevons, Edgeworth, Walras, and Vilfredo Pareto borrowed Hermann von Hemholtz’s conservation of energy field equations from the mid-19th century as a template for neoclassical economic theory and stuck with them, ignoring subsequent improvements by other physicists like James Clerk Maxwell and Ludwig Boltzmann. Philip Mirowski (1989, 1991) claims that, during their lives, these scholars’ efforts were mostly discredited by economists and physicists alike, and that it was not until the middle of the twentieth century that neoclassical theory made a huge leap in mathematical sophistication (due mostly to a wave of physicists and engineers into the field of economics).

³ It is beyond our present scope to further argue this point, although we do return to it briefly in section five of this article. (For an excellent critique of neoclassical economics, see Lawson 2003.)

⁴ For example, seventeenth-century philosopher Francis Bacon thought only qualitatively, which served rationalistic models, but did not cut muster even in his time, during which the fledgling scientific revolution was increasingly demanding quantitative precision (Whitehead 1925, 45).

⁵ In a follow-up piece in Nature Magazine, Robert Costanza et al. (2014) rather ambitiously estimate the dollar value of all the world’s ecosystems. The authors are well aware of the subjectivity involved in such measurement, but firmly believe that their estimates – however imperfect or imprecise – constitute useful information.

⁶ Our Figure 1 is an adapted version of one found in Herman Daly (1991, 19).

⁷ Marc R. Tool (1994) distinguished between institutions that are instrumental and those that are “invidious.” While Thorstein Veblen’s “ceremonial” is not precisely synonymous with Tool’s term, we prefer the former because it conveys the presumably sacrosanct nature of the values he criticizes. More important, ceremonial values are values that are destructive to the provisioning process, not unlike Tool’s use of the word “invidious.”

⁸ Whether or not we believe in the extreme form of this — that is, that there can be no objectivity, even in the physical sciences — is immaterial for the purposes of this paper.

⁹ Johan Huizinga (1949, 19).

¹⁰ One might plausibly object that non-sustainability and extinction are not synonymous. While true, it does not follow from this that a non-sustainable path is unlikely to lead to an eventual human extinction. Space limitations, however, preclude our pursuing this argument further.

¹¹ Educators increasingly are evaluated, for example, on the basis of students’ test scores, and physicians and other care professionals on the number of people they see.

Additional information

Notes on contributors

Mariano Torras

Mariano Torras is a professor of economics and Gita Surie is a professor of management, both at Adelphi University.

Gita Surie

Mariano Torras is a professor of economics and Gita Surie is a professor of management, both at Adelphi University.