Philosophical Issues in Economics

A narrow definition of fact

In its narrow definition fact has been defined as pure sense datum (Popper 1959:423 & Putnam 2002:28). Based on this narrow definition both Popper (1959) and Myrdal (1958) have claimed that it is impossible to describe the world purely objectively. According to Popper, defining theory as a universal statement based on deductive logic, all facts are made expressible by our understanding of the world in the context of theories and expectations (Popper 1959:94). Popper thus claims that all facts and judgements are theory-laden.

Myrdal considers a scientific fact to be “a construction abstracted from a complex and interwoven reality by means of arbitrary definitions and classifications” (Myrdal 1958:153). In line with Popper, Myrdal asserts that these ‘definitions and classifications’ are guided by theories (Myrdal 1958:153-4). Myrdal however takes this a step further by claiming that the selection and systematisation of theories inherent to the process of constructing scientific facts is directed and given meaning to by an individual’s values (Myrdal 1958:54). Hence, Myrdal argues that all judgements, theories and concepts are inevitably value-laden (Myrdal 1958:1-2). According to this view, values are not necessarily moral or ethical, but are more broadly defined as to include all human ideals that give direction to our thoughts and significance to our inferences (Myrdal 1958:xiii).

Following this broad definition of value, it is difficult to distinguish a clear boundary between Popper and Myrdal’s claims. Myrdal assumes that to express a scientific fact there always is a choice in theories to be made and that in choosing, values necessarily come into play. Popper does not ignore this decision-making process and asserts that the choice of theory is “decisively influenced by the application of the theory and the acceptance of the basic statements in connection with this application” (Popper 1959:109). He adds that “the testing of a theory depends upon basic statements whose acceptance or rejection, in its turn, depends upon our decisions,” explicitly stating that, “this choice is in part determined by considerations of utility” (Popper 1959:108). Unlike Myrdal, Popper does not claim that it necessarily follows that due to these decisions, theories themselves are value-laden. Moreover, many other philosophers, who limit the definition of value to moral or ethical human ideals, would disagree with Myrdal’s claim that every choice is inevitably value-laden.

There appears to be an agreement that based on the narrow definition of fact, facts and judgements are theory-laden in which a decision-making process is involved. Depending on ones definition of value it could be claimed that this process is necessarily value-laden. A more narrow definition however, leads to the conclusion that this process does not necessarily have to be value-laden in the sense of being driven by moral or ethical considerations. Furthermore, it should be pointed out that while facts can be value-laden that this does not imply that they are value judgements nor values themselves.

An expanded definition of fact

The narrow, absolute definition of fact can be rejected and replaced with a more relative definition, which includes descriptions of reality described in light of a situation, time and place. These factual judgements are entangled with values, which can be regarded as truths in a particular culture, at a particular time and place (Putnam 2002:44). The extent that these facts are intertwined with values varies. A five-pound bank note and a promise made for example can both be regarded as facts in a particular culture, time and place. The extent to which values play a role in these facts differs. In the case of the five-pound bank note, the extent to which values are involved appears less than for example their role in determining the fact of a promise made. It can therefore be asserted that following this expanded definition of fact, facts are to varying degrees value-laden. Moreover, one can arguably claim that theories and values in this sense can be fact-laden in direct contrast to Popper’s position, which is based on the assumption that theory pre-exists fact (Popper 1959:106 & Putnam 2002:137).

It is so far clear that theory, value and fact interact much more than often made explicit. How these concepts and their interaction, as discussed above, relate to judgements of poverty in specific is our next concern.
Poverty judgements
Poverty judgements are descriptions dependent on a particular place, time and situation as well as on the definition of poverty. The definition of poverty is itself a relative concept with varying definitions. In the table below, several different definitions of poverty have been selected.

Approach:	Basic Needs	Capability	Income	Human Development (measured by HPI-1)	Personal
	Theoretical				Personal
Poverty judgement described in terms of: (informational base)	Quantities of food, shelter, water and sanitation that are necessary to prevent ill health, under nourishment, etc.	Level of capability deprivation.	Level of income determined by poverty line.	The percentage of the population with access to health services and safe water, the percentage of children underweight and the percentage of adult literacy.	‘Lies in the eye of the beholder’ (Orschansky cited in Sen 1980:366).
Poverty judgements show:	Whether a person fails to fulfil their basic needs, which in themselves are a matter of debate.	Whether a person is capability deprived, which in itself is a matter of debate.	Whether a person is below a defined poverty line or the percentage of a population below it.	A percentage of a population below a threshold level in basic dimensions of human development.	What lies in the eye of the beholder.

* Sen 1999:76-9 and www.undp.org
Poverty Definitions