Positive economics, value-free economics or wertfrei economics (from the German wertfrei, meaning value-free) is the part of economics that focuses on facts and cause-and-effect relationships. To assume value-free economics is possible means to assume postive facts( facts which do not imply something is good or bad, better or worse, etc..) exist, and is not an uncontroversial claim.

Value-free economics attempts to present the truth or falsity of positive facts, in a way that does not presuppose any value judgments (i.e objectively). This is much harder than it appears. Many argue there are no such thing as positive facts (Tom is 6 feet tall, the import elacticity of British automobiles in 1979 was 1.3). Others argue positive facts cannot exist in economics.

Most try to distinguish between the facts themselves being value-free, and theories containing those facts being value free/ actions taken about facts being value free. No action can be value-free. Speaking, presenting, publishing, asking, are all actions and all involve a value judgment. However, the statement "that is a good building" may be a value loaded statement, but it does not mean the building is value loaded. The building is unlikely to buckle under the weight of excess values. The building may indeed be postively good. Thus we must distinguish between what is and is not able to be value-free.

However, most of economics, it is argued, does not deal with positive facts. Poverty and Unemployment for instance are both terms which at first seem positive. "The unemployment rate is 6%" seems like it should be value-free. However, the term unemployment, in its definition implies values. For instance, the usual definintion/ measurement of unemployment does not include mothers who stay at home to raise children as unemployed. This is obviously a value judgment. It also does not consider those who do not actively search for a job unemployed. This involves more value loading. Thus, what looks like a value-free statement, appears to contain moral judgments.

Economic models also may contain values without explicitly stating what values are contained within them. For instance, the Golden Rule level of Savings, is defined as the savings rate which maximizes consumption per-worker in steady state. However, such models require a discount value to be applied to future generations. Do we value future generations highly. Or do we think a nuclear war might be likely, and hence discount the future at a higher rate. Different Golden Rule models yield different savings rates based on the discount value they choose. However, a policy maker, whose end is simply to choose a savings rate, and who wishes to simply go to economics for a positive answer, now must go to each model, and dig through its internal values, to find which discount rate he finds most acceptable, before setting the economy's saving's rate.

Value-free economics may be possible, and even desirable, but it is certainly a very difficult concept to obtain in actuality.

Types of economics

Pozitívna ekonómia