For example, suppose the U.S. government is considering opening up trade with a large, poor country. The move would make most consumers a little better off -- they would have cheaper clothes and toys. But a few workers in the textile and toy-manufacturing industries would be devastated -- their careers would be down the drain, all their knowledge suddenly rendered obsolete. If they couldn’t retrain for new careers -- and let’s face it, how many 45-year-olds can retrain for new careers? -- they’d be stuck in low-wage, low-prestige service jobs, or dependent on government handouts.
Should economists recommend this policy, reasoning that the good of the many outweighs the good of the few? Or should they be opposed to hurting a few people a lot so the majority can reap a modest benefit?
For decades, economists have tried to sweep these hard questions under the rug. Uncomfortable with telling leaders and voters what’s right and wrong, they have focused on the objective, or positive side of their discipline -- finding the facts as best they can, and leaving hard moral (normative) decisions to the democratic process.
In some ways, that was an admirable impulse. But it’s getting harder and harder to maintain that just-the-facts attitude, because society seems to be facing increasingly tough choices about who should receive the fruits of prosperity. As productivity growth slows and inequality becomes more severe, questions about how the economic pie should be divided have come to dominate our national discourse.