Economics is an empirical science. Okay, yeah, I realize many econ papers simply consist of logical deductions from mathematical models. However, as soon as you attempt to use these models to explain real world phenomena, you make an empirical claim. Saying “Firms in perfect competition are price takers” might be a priori, but it is an empirical claim to say that any actual business in any actual market behaves like or can be modeled properly as a firm in perfect competition.
Since economics is in that sense empirical, it’s logically possible for it to be wrong. We live in a world where standard neoclassical economics is much closer to the truth than, say, heterodox Marxist economics. But, as a matter of logic, it could have been otherwise, just as it could have turned out that no gases can ever been approximated by the ideal gas law. You generally need to leave the econ department to find a person who believes in Marxist economics, but nevertheless, it could still turn out that the Marxists are right. Like any science, economics is open to disconfirmation. There’s some possibility, and perhaps even some non-zero probability, that most of your empirical economic beliefs could be disconfirmed in the future.
With that in mind, I have a thought experiment for you.
This is directed at libertarians who 1) advocate a purely negative rights-based theory of justice, but 2) who also believe that under ideal libertarian institutions, markets would work really well at making most people better off.
Imagine that your empirical beliefs about economics have been disconfirmed. Imagine that a bunch of economists provide compelling evidence that life in a strictly libertarian polity would be a disaster. Imagine that they show conclusively that if people everywhere were to live in a Nozickian minimal state or a Rothbardian anarcho-capitalist civil society, with everyone strictly observing property right rules, that 10% of people would starve, 80% would be near subsistence, and only 10% would prosper. However, imagine that they also show that in a liberal social democracy with significant redistribution or social insurance, most people would prosper, just as many people living in such welfare states are doing pretty well right now.
If economists and other social scientists were to provide compelling empirical evidence that you are wrong about how economies work, and that libertarian society would be a humanitarian disaster, what would you advocate and why? In particular, would you think it would be morally right for states to provide social insurance? How much and why?
The purpose of this exercise is to see how your moral commitments interact with your empirical beliefs about how economies actually work.
N.B.: If you post a response of the form "You're constructing a Krugmanesque straw man! Markets do work!," you misunderstood me.
By the way, if you aren’t a libertarian, try changing this thought experiment around to deal with your views.