ABSTRACT
When I began teaching in the 1960s, among my colleagues it was commonplace to claim that, unlike other social sciences, economics was value-free. To some extent this was merely the old advocacy of positive economics over normative economics. To some extent, however, it was also merely naive. Those advocating particular economic policies (e.g. privitization, deregulation, etc.) are advocating and promoting specific social values. In the subsequent years, the social values expressed by mainstream economists have changed many times. There was mainstream advocacy of pro-Keynesian government policies of the 1960s, the neoconservative monetarism of the 1970s, the anti-regulation policies of the 1980s, and the more extreme anti-governmental policies of downsizing being advocated in the 1990s. Could neoclassical economists ever explain such wild swings of expressed social values? The purpose of this chapter is to present the view that neoclassical economics is methodologically incapable of explaining the existence or nature of values, or even facts involving values, because all neoclasssical theories are based on the methodological doctrines of psychologism.1 I shall not argue here over the wisdom of psychologism; rather, I shall argue that one of the necessary consequences of adhering to its doctrines is that it precludes explaining values.2
