# The qualitative is the foundation of the quantitative

People often use quantitative data to try to debunk other people's qualitative impressions.

But when the data at issue are putative welfare measures (e.g. real income, GDP-per-capita, etc), the qualitative measures are foundational, and the quantitative mere proxies.

GDP-per-capita is widely used as a welfare measure, not because it conceptually maps well to welfare — for all kinds of reasons it does not! — but because from the mid-20th Century to the first years of the 21st, it mapped pretty well to our qualitative intuitions about relative welfare.

The consensus that there is a good correlation between GDP per capita and qualitative welfare has broken down more recently. (Is Mississippi really "richer", in human welfare terms, than Spain?)

We can have arguments about why it has broken down. Inequality, differences in how medical and social insurance are accounted in GDP, the effect of market power, and failure to account for differences in leisure time are all candidates. But fundamentally, GDP-per-capita was only ever a good measure because there was a widespread consensus that it tracked qualitative outcomes. Once that consensus has broken down, there is no reason to think it should be a welfare measure. The inventor of GDP, Simon Kuznets, explicitly argued that it should not be! (ht Marketplace for the source)

The same is true of "real" wealth or purchasing power measures! They are not inherently welfare measures. (I belabored this in a recent post.)

If people are making qualitative claims that some group's welfare is poor, and you try to debunk those claims with quantitative data, whether GDP-per-capita or real purchasing power measures, you are engaged in a kind of circular reasoning. The only reason we think these should be welfare measures is because they sometimes seem to work at capturing qualitative intuitions about relative welfare.

If qualitatively they seem to cease to work well as welfare measures, then there is no reason to think they are good welfare measures. When you debunk widespread qualitative claims about welfare with this "data", you are really debunking the quality of your measures!

That's not to say unevidenced claims about qualitative welfare must be taken as gospel, at face value. The claims could still be wrong! Welfare is unobservable, hard to measure. This is economics' foundational demon as a "science".

The moments when there is consensus that any quantitative measure maps to welfare are fleeting and precious. During those exceptional moments, it may come to seem plausible that we might maximize welfare "scientifically".

But that is only hubris. When that consensus flags, like now, we have to cop to the fact that human welfare is not a scientific observable. Welfare, by which we mean "prosperity" or "thriving", is something we experience qualitatively, we construct normatively, we strive to achieve politically. Those who think they have it as fact are only imposing elaborate fictions.

← Running on democracy hasn't been tried
↑↑↑
When is the economy good or bad? →

Subscribe to this blog (`drafts.interfluidity.com`)

E‑mail:
Display Name:
😎