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An example of a normative economic statement is as follows: The price of milk should be $6 a gallon to give dairy farmers a higher standard of living. This is a normative statement, because it reflects value judgments; this specific statement makes the judgment that the benefits of the policy outweigh its costs.
"Normative" is sometimes also used, somewhat confusingly, to mean relating to a descriptive standard: doing what is normally done or what most others are expected to do in practice. In this sense a norm is not evaluative, a basis for judging behavior or outcomes; it is simply a fact or observation about behavior or outcomes, without judgment.
Orders and permissions express norms. Such norm sentences do not describe how the world is, they rather prescribe how the world should be. Imperative sentences are the most obvious way to express norms, but declarative sentences also may be norms, as is the case with laws or 'principles'.
Polanyi argued that the term economics has two meanings: the formal meaning refers to economics as the logic of rational action and decision-making, as a rational choice between the alternative uses of limited (scarce) means. The second, substantive meaning, however, presupposes neither rational decision-making nor conditions of scarcity.
The fact–value distinction is a fundamental epistemological distinction described between: [1]. Statements of fact (positive or descriptive statements), which are based upon reason and observation, and examined via the empirical method.
For example, involuntary events like digestion and earthquakes can have a positive or negative value even if they are not right or wrong in a strict sense. [20] Despite the distinction, evaluative and normative concepts are closely related. For example, the value of the consequences of an action may affect whether this action is right or wrong ...
The Essay has been described as different from earlier writings on economic methodology in generating a range of tightly argued, radical implications from a simple definition, for example in admitting an aspect of behaviour (rather than a list of behaviours) but not limiting the subject-matter of economics, provided that the influence of ...
Better put, the justification of character, and whether an action is good or not, is based on how the person contributes to the concept of social utility. In the long run the best proof of a good character is good actions; and resolutely refuse to consider any mental disposition as good, of which the predominant tendency is to produce bad conduct.