Economic Policy: Science or Ideology? (Part Two)

Abstract

The two parts of this article (the first was pub lished in CEPAL Review, N.° 7) constitute a systematic attempt to present and analyse critically the major approaches in 'official eco nomics1 to the theory of economic policy. Part One was devoted to L. Robbins; this part seeks to outline the foundations o f 'welfare économ ies1 and the latest neoclassical positions on the construction of econometric models. The author argues that the various neo classical approaches represent attempts to overcome the incompatibility of the two main objectives pursued on the one hand, to cons truct a universal and a historical scientific theory to justify the status quo; and on the other, to understand the real world and its changes in order to provide the dominant interests with the operational means for them to be able to tackle economic policy problems effectively. 'Welfare economics1 and the 'blac box' of econometric models are two clearly different theoretical and practical alternatives, al though divergences exist with them. The author explores the two, and their variants, in detail, and stresses the similarities between them which stem from their common neo classical origins and are primarily visible in their views on the nature of the State and society, and the roles these should play in eco nomic policy. * F o n n e r s ta ff m e m b e r o f th e L a tin A m e ric a n In s titu te fo r E c o n o m ic a n d S o cial P la n n in g a n d p ro fesso r in th e U n iv e rs ity o f C a m p in h a s (B razil).