A positive economics is a body of systematic knowledge concerning ‘what is?’
It helps to studies the cause and effect between different economic variables.
It deals with ‘what is’ or ‘what was.’
For example, demand increase due to fall in price and demand decrease at the increases in price.
Here, increase or decrease in demand is effect and decrease or increase in price is the cause.
Most of all economic theories are based on the facts.
Therefore, economics is the positive science in the view of Robbins, Stonier and Hague.
According to Robbins, “The function of economists is to explore and explain and not to advocate or condemn.”
It means economics is the positive science which deals with facts.
Normative economics gives moral lesson.
It helps to make the ethical decisions.
It deals with ‘what should be’ or ‘what ought to be.’
Welfare economics is related to the poverty alleviation, equal distribution of income or reduction of income inequality and reduction of unemployment etc which are of normative nature.
Alfred Marshall and his followers made normative science to the economics.
Policy formation, budgeting and plan formation body held welfare oriented decisions rather than facts.
Therefore, economics is not a positive science but a normative one in the view of Marshall.
SN |
Positive Economics |
Normative Economics |
(i) |
Positive economics deals with what is or what was. |
Normative economics deals with what should be or what ought to be. |
(ii) |
It is based on facts. |
It is based on ethics. |
(iii) |
It is regarded to the actual or realistic situation. |
It is regarded to the idealistic situation. |
(iv) |
Positive economics is verified with actual data. |
Normative economics cannot be verified with actual data. |
(v) |
Value judgment is not given in positive science. |
Value judgment is given in positive science. |
(vi) |
It deals with how an economic problem is solved. |
It deals with how an economic problem should be solved. |
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