Self selection. On Wed, Feb 10, 2016 at 5:34 AM, Louis Proyect <[email protected]> wrote:
> THE CHRONICLE REVIEW, Feb. 10 2016 > Why Are Economists So Small-Minded? > By Jefferson Cowie > > After reading through a policy speech prepared by John Kenneth > Galbraith, President Lyndon Johnson addressed the economist. "You know, > Ken," he said, "the trouble with economics is it’s like peeing in your > pants. It feels hot to you but leaves everyone else cold." One only has > to go to an economics seminar to know that Johnson was right. > > Yet in an era in which markets have become the method of justifying and > adjudicating all things, we cannot afford to have economics leaving us > feeling cold and wet. Economics has become the benchmark for other > intellectual endeavors; its practitioners rule policy debates; and, > sadly, its mathematical modeling has become a closet form of > anti-intellectualism — mathematically abstracted, as it tends to be, > from real-world problems — that is creeping into other disciplines. > While fewer people care that much of the lit-crit crowd stopped talking > humanities to humans, economics is too central to political life for > such shenanigans. It is time for the "queen of the social sciences" to > get off her throne and start speaking to some of the lesser subjects in > the kingdom of academe. > > My "J’accuse" is this: The field of economics practices the very sin it > preaches against — protectionism. That is to say, economists are > protectionists of the intellectual sort at a time when the need for > trade in the market of ideas has never been more pressing. > > In a recent article, "The Superiority of Economists," in the Journal of > Economic Perspectives, we learn a number of things that are truly > impressive about the field: Its graduates have higher standardized-test > scores than political scientists and sociologists; they tend to find > places higher up in policy and advisory circles; they are the best at > math; and they earn more money and tend to have better career prospects > than other graduates do. It’s no surprise that economists also seem to > have more intellectual self-confidence than those in other fields. > Economics, after all, is the only social science to have its own Nobel > prize. Grounded in the present, they look toward the future and only > rarely to the past. > > The more economists agree among themselves, the further they drift from > everyone else. On the other hand, smug in their security, economists are > the least likely to cite other disciplines. Perhaps the most disturbing > thing is the remarkable extent to which graduate training in the field > is similar across institutions and departments — a stark contrast to > other disciplines. And most of that graduate education is driven by > textbooks and textbooks alone. To other social scientists and humanists, > that is an astonishing proposition, and evidence of the field’s range of > ideas. > > As that survey of economic training shows, economics demonstrates more > internal control over its own labor market, hiring only those who follow > the prescribed formulas. The study of economics appears to be an > exercise in the affirmation of orthodoxy. > > Economists also have less regard — or perhaps greater disdain? — for > other disciplines, as well as much more tightly wound methods, unified > frameworks, and core principles that appear unchallengeable from within > or outside the field. All of this condemns economists to a distinct > epistemological insularity, a unified worldview that demarcates them > from the rest of the academy. The more economists agree among > themselves, the further they drift from everyone else. > > As for that Nobel prize? Perhaps it is an example of the problem. It was > created not by Alfred Nobel himself, as part of his project to > recognize those who have created "the greatest benefit to mankind," but > was endowed some 70 years later by the Swedish national bank in an act > of propaganda — what one wag called "a marketing ploy to celebrate the > Bank of Sweden’s 300th anniversary." > > The insularity of economics prompts an enormous irony: Rather than a > market, economics borders on a command economy. From inside its > fenced-in monocultural landscape, students are taught that they have > arrived at the land of objectivity, that they have passed beyond the > ideological and into the scientific. Not only is this protectionism, but > it creates a rub with democratic theory and practice. It is, > essentially, an invitation to opt out of the greater intellectual > struggles in which the rest of us are engaged. By protecting itself from > the contagion of outside ideas, economics offers up a more extreme > version of the Balkanization and creeping anti-intellectualism that are > apparent elsewhere in the academy. Its hegemonic role, however, makes > all the more important the need for the field to open up and transcend > its preoccupation with the blackboard fictions of economic modeling. > > As the Keynes scholar Robert Skidelsky has put it, the methodological > presumption of economics is that "a good car [called economic modeling] > has been built: Students must learn how to drive it." But economics > should not be a course in driver’s ed; it should empower students to > think critically and creatively about the whole system of > transportation. We should be inculcating curiosity, a sense of > adventure, a greater range of ideas, not shutting them down. After all, > it’s not as if economists are simply correct. When the queen asked the > faculty members of the London School of Economics and Political Science > why they did not foresee the 2008 financial crisis, they said they would > get back to her. They later admitted in a letter that they had no answer > and that their promise to provide one was an example of "wishful > thinking combined with hubris." > > The training of an economist encourages a sense of difference from > others. The economist Robert Frank joined in performing a telling > experiment involving the prisoner’s-dilemma game with undergraduates at > Cornell University, in which two players had to decide whether to work > together or advance their own interest at the expense of their > partner’s. Economics students, the study found, behave less > cooperatively than others do. Economics students were 42 percent more > likely to predict that their partners would defect rather than cooperate > in the game. > > As students in general wind their way through four years of college, > they tend to become more cooperative. But as economics students move > toward graduation, Frank and his colleagues found the trend toward > cooperation to be "conspicuously absent." In short, undergraduates who > went through economics training became less cooperative and more > suspicious of the cooperative impulses of others. Perhaps the principle > of self-interest is taught as much as it is intrinsic to human nature. > The final irony is that such behavior prepares aspiring economists for > the very world they are seeking to create. > > People are shaped by history and social experience. And the market > changes people. To quote Alan Greenspan on recent social changes: The > problem is "not that humans have become any more greedy than in > generations past," but rather that "the avenues to express greed had > grown so enormously." Even Greenspan thinks that context matters, that > change over time matters, and that political culture shapes economic > behavior. > > His remark leads us to the vast and varied terrain of economic history. > History is valuable, and, if the education of economists were more of an > intellectual endeavor than a pipeline to careers in finance, it could be > one intellectual component in a basket of approaches to get students to > think more widely. Unfortunately, economic historians tend to be busy > reducing history to the application of contemporary models to old data > sets. And they don’t like to talk with people in the history department > very much. > > Perhaps Thomas Piketty’s immodestly thick compendium of theory, data, > and narrative, Capital in the Twenty-First Century, promises a comeback > for a broader range of ideas. Piketty is a rare voice willing to call > out economists for their protectionist methods. As he boldly states in > one of the most intellectually liberating passages in the book: > > The fetishization of mathematical modeling is little more than a barrier > to keep out the competition. To put it bluntly, the discipline of > economics has yet to get over its childish passion for mathematics and > for purely theoretical and often highly ideological speculation, at the > expense of historical research and collaboration with the other social > sciences. Economists are all too often preoccupied with petty > mathematical problems of interest only to themselves. This obsession > with mathematics is an easy way of acquiring the appearance of > scientificity without having to answer the far more complex questions > posed by the world we live in. > > The book is more important, of course, for its argument about how the > economy works. Piketty’s basic premise is as heroic as it is succinct: > The rate of return on capital outstrips economic growth, making > capitalism an engine for inequality unless there are countervailing forces. > > As powerful and persuasive as Piketty’s work is, truth be told, he is > not much of a historian. As much as I admire his data — and use it > myself — the American history in his book, where it exists, is often > just wrong in both fact and interpretation. He wields history like a > chef with a heavy hand on the salt — it’s there every time you taste the > dish but it doesn’t really help things. Balzac keeps popping up in > Piketty’s book, but there are no unions, the New Deal is not especially > significant, and there is not much labor-market policy at all. Taxation > and war seem to be the only levers of change and, by association, the > only solution to problems. Social history — the history from below — > seems like an unknown land. > > In the past several years, there has been a resurgence of interest in > the history of capitalism. What once might have been called the study of > "political economy" is an emerging intellectual framework combining an > array of methods and questions with a return to putting capital at the > center of the historical narrative. The hope of those engaged in the > history of capitalism is to challenge the clinical modeling of social > life. There is not one thing we can call "capitalism," after all, but a > contingent historical assemblage of work, investment, production, > politics, and trade from the 15th-century spice trade through slave > cotton to today’s digital labor. > > The new historians of capitalism tend to be more consciously ecumenical > in their research and interpretive methods. Their strength is the > opposite of mainstream economics. As the historian Louis Hyman has put it: > > > > "When the story calls for linear regression, they use linear regression. > When the story calls for the backstory of the commodity, they > de-fetishize and figure out the story. When gender is the dominant force > in the archive, they use feminist theory. Leveraging the ease of data > analysis, the historians of capitalism display a return to numbers that > has been lacking in historical scholarship of late. While math is widely > used, its models are not lionized. Data does not displace the human > element in history, but complements it. It is used to clarify and > explain, but not be so complex that it can’t be conveyed to normal humans." > > > For the most part, the historians of capitalism are engaged in the > subjectivity of the matter rather than the objectivity of the model. > They privilege facts over theory, the personal over the impersonal > forces, the specific over the universalist claim, the implicative rather > than the explicative, the narrative over the analytical, and the thick > description over the compression, precision, and mathematical parsimony > of the economist. What could be a better complement (I’m not looking to > overthrow the discipline) to the insularity of economics than the > subjectivity of real people? > > To historians, it is clear that markets are less natural or specific > than temporally, spatially, and culturally specific. They operate in a > given moment created by social actors. It is difficult to look at the > historical record and see the past as shaped by perfect competition, > perfect information, and minimal interference by the government, let > alone to see that markets always provide "fair" outcomes. Moreover, > people trained in history, sociology, or anthropology would never > believe that you could remove "market distortions" like unions or > regulations without both affecting the course of democracy and > strengthening the power of already dominant groups. > > A 2014 study by Martin Gilens and Benjamin Page shows that regulatory > capture has actually become regime capture, the power of wealth enjoying > its near-complete conquest of the political process. The researchers > conclude that the rich and powerful control the country, not the > majority of its voters. In contrast, "mass-based interest groups and > average citizens have little or no independent influence." How then can > the study of economics become divorced from the study of politics? > > In chiseling their intellectual enterprise down to its narrowest > terrain, economists ironically reflect the fate of the hapless workers > in Adam Smith’s Lectures on Justice, Police, Revenue and Arms. He argued > that the "commercial spirit" "confines the views of men." "Where the > division of labour is brought to perfection," Smith argued, "every man > has only a simple operation to perform. To this his whole attention is > confined, and few ideas pass in his mind but what have an immediate > connection with it." By separating economics from the rest of the > intellectual world, by posing models that few understand or accept, > economists’ part in the intellectual division of labor has become more > refined and less useful as a way to understand the world. Confined, indeed. > > The textbook fundamentals of economics are important to us all — and > important for people in all disciplines to be familiar with. Many > economists are among the smartest people on campus, and I enjoy > listening to them reason. But the fetishization of mathematical > modeling, wrapped around the assumption of perfect markets and rational > behavior, ends up being little more than a barrier to keep out the > competition rather than an opening to the intellectual cooperation and > collaboration that are sorely needed. > > Here we must hail the rise of behavioral economics, with its creative > experimentation, connection to sociology and psychology, and, to > paraphrase Dan Ariely, its investigations into the predictability of the > irrational. What economists can learn from other corners of the campus > is that people live subjective, historically contingent lives, and that > many of their core values and pursuits lie outside the tyranny of the > cash nexus. > > If we break down protectionist barriers, perhaps we can replace the > study of Homo economicus with that of Homo sapiens. Let’s not forget > that paradigmatic breakthroughs don’t come from supersmart parrots with > the best math skills. Education is not technical training. New ideas > come from energetic, youthful, rebellious intellectuals like John > Maynard Keynes, who, with his protégé Hubert Henderson, wrote that we > should feel "free to be bold, to be open, to experiment, to take action, > to try the possibility of things. And over against us, standing in the > path, there is nothing but a few old gentlemen tightly buttoned up in > their frock coats, who only need to be treated with a little friendly > disrespect and bowled over like ninepins." While the target of their > impatience was politicians, perhaps the same might be said of what needs > to happen in his profession today. > > Come on, economists, the rest of us really need you. > > Jefferson Cowie is a professor of history at Vanderbilt University. His > latest book, The Great Exception: The New Deal and the Limits of > American Politics (Princeton University Press), was released in January. > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Cheers, Tom Walker (Sandwichman)
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