"Whenever a quarrel in the legislative debate or its part can be reduced to solving an empirical question (of factual nature), scientific method is the one to be followed. For example, a tentative debate over an introduction of a protective tariff could use an argument that “cheap imports from abroad cause higher domestic unemployment.” This argument for a tariff is scientifically verifiable within the realm of economic reserach. This way, the counter-arguments such as “cheaper imports leave more resources in domestic wallets, supporting the local economy in creation of new jobs” or “more import puts pressure on local currency to depreciate, which stimulates exports” or “free labor from uncompetitive industries can move to branches with higher value-added, increasing total income” shall be also given a proper consideration. In the end, thus, a policy decision may not depend on economic misinterpretation of the happenings, but rather on the time preference (that is, short-term- or longer-term-orientedness) of the administration in power."
Any comments on the topic are warmly welcome!
Posts
