as acceptable costs in achieving a redistribution of economic surplus
toward these farmers.
In advocating these kinds of policies, ones that redistribute economic
surplus but also reduce the total amount of economic surplus available,
policymakers are making normative judgments regarding which groups in
society deserve to be helped at the expense of others. These judgements
may be informed by a careful study of which groups are most genuinely
in need, and they may also be driven by political considerations that the
current government deems important to its prospects for re-election. In
either case, there is nothing necessarily “wrong” about the government’s
decision to intervene in these markets, even if these interventions lead to
inefficiency. Not surprisingly, however, decisions like this are often
controversial and hotly debated.
The job of the economist is to carefully analyze the effects of such
policies, taking care to identify both the distributional effects and the
implications for the overall amount of economic surplus generated in the
market. This is positive analysis, emphasizing the actual effects of the
policy rather than what might be desirable. These analytical results can
then be used as inputs to the decision-making process, where they will be
combined with normative and political considerations before a final
policy decision is reached. In many parts of this text, we will encounter
policies that governments implement (or consider implementing) to alter
market outcomes, and we will examine the effects of those policies. A full
understanding of why specific policies are implemented requires paying