Abstract
The objectives of this chapter are to characterize the socio-economic machines and to show the entanglement of facts and values in economic instruments like indexes. After presenting the proposal for a normative machine and model of capabilities, the chapter analyzes the role of the HDI in this context. This will serve as an example of how to combine theoretical and practical reason in Economics. It will show that the HDI makes a number of underlying technical and practical assumptions. The conclusion is that the HDI could be a partial model contributing to the construction of a socio-economic normative machine of development, but that it has to be improved. Normative models should include all the relevant arguments and information needed to construct a socio-economic normative machine—which permits the effective work of practical reason in order to accomplish its purpose in each place and situation.
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Notes
- 1.
On this, also see the examples provided by Reiss 2008a.
- 2.
As in the rest of this work the term “practical” is not used here in the sense of pragmatic but of a prudential reason, decision or action.
- 3.
See also Anderson 1993, p. 3.1.
- 4.
- 5.
- 6.
On this topic see also the sharp essay of MacIntyre (1984, Chap. 8
- 7.
They are non-additive qualities: see, e. g., Cohen and Nagle (1934, p. 296).
- 8.
She explains (2001, p. 240): “Index number formulae conceived as measuring instruments are based on the strategy of aggregating in a way that allows each individual element to be assigned its due weight in the whole. Such a “weighted average” strategy provides a solution to a general problem in economics, namely that many concepts refer to aggregates of things which may be considered homogeneous in the dimension of prices or money value, but are nonhomogeneous in another dimension, namely amounts consumed or produced. The solution is to use weights to overcome the problem of how to average in a manner that takes account of both amounts and values.”
- 9.
Scales of measurement in the social and behavioral sciences are nominal or ordinal (Finkelstein 1982, p. 26).
- 10.
These theoretical and practical insights are part of what Harrison calls (2002, p. 37) “outside criteria” needed to operationalize a theory of well-being.
- 11.
For Esposito and Chiappero-Martinetti (2008, p. 3) “the act of not giving weights—equivalent indeed to the assignation of identical weights to each dimension—is itself a subjective decision motivated by the value judgment that those dimensions are equally valuable. (…) In the literature (…) the possible meanings of the statement ‘dimension h is more important than dimension k have not critically been searched for.”
- 12.
Sen (1992, p. 117) asserts: “It is not unreasonable to think that if we try to take note of all the diversities, we might end up in a total mess of empirical confusion. The demands of practice, as well as reasonable normative commitments, indicate discretion and suggest that we disregard some diversities while concentrating in the more important ones.” The task will be to reason and decide which are important and which are not.
- 13.
I recognize the contribution of Mary Morgan concerning this point.
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Crespo, R.F. (2013). Socio-Economic Machines and Practical Models of Development: The Role of the HDI. In: Theoretical and Practical Reason in Economics. SpringerBriefs in Philosophy. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-5564-2_5
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