A Mythical Micro Meeting
By Bryan Caplan
I recently discussed the teaching of Ph.D. Microeconomics with a noted professor in a top five econ department. His bottom line: The curriculum is virtually the same as it was when I took Ph.D. Micro a quarter century ago. Among active researchers, the status of pure theory has dramatically fallen during that period, but pure theorists retain a stranglehold over the first-year curriculum. This surpasses even my pessimistic expectations for the education system; I would have thought that top schools would have at least marginally decreased pure theory in favor of empirical work. But at least according to my source, this hasn’t happened.
Rather than decry this stasis, however, I thought it best to write a dialogue.
Meeting room at a prestigious university
Professor Proof, old-school micro teacher
Professor Raze, radical curriculum reformer
Professor Well, swing voter on the curriculum committee
Prof. Raze: I just reread your Ph.D. Micro syllabus, Prof. Proof. Frankly, it’s ridiculous. You haven’t changed the content in a quarter century. You make zero effort to introduce students to any of the great empirical work that’s been done in the meanwhile. Instead, you waste a year of their lives on useless math. Enough is enough!
Prof. Proof: Relax, Raze. Students have plenty of time to learn empirical work later on. The point of Ph.D. Micro is to train economists in the fundamental ideas of their discipline. That’s what I set out to do when I wrote the syllabus 25 years ago, and that’s what I’ll continue to do.
Prof. Well: Let’s take it down a notch. We’re the curriculum committee, so we have to work together, Raze. And the chairman appointed us to reach a consensus, Proof. You can’t just stonewall.
Raze: [sullenly] Fine.
Proof: [snottily] Fine.
Well: Let’s start with Raze. What exactly is wrong with Ph.D. Micro as it is?
Raze: We spend the whole year teaching mountains of irrelevant math and theory. The opportunity cost is high, because we could spend that time teaching promising young minds about how the economy actually works – not to mention basic economic principles. And it’s a needless entry barrier for students who care about the real world.
Proof: “Irrelevant math and theory”! So we should just become sociologists?
Raze: I never said that. I’m all for teaching math that students are likely to use in their research, and theories that actually shed light on the real world.
Proof: [harumphs] That’s already what I do.
Raze: [mock incredulously] Oh really! Students are likely to use topology in their research?
Proof: Many do.
Raze: Name one.
Proof: Well, two years ago my student Chloe used topology in her dissertation.
Raze: And for her sake, all her classmates had to spend weeks suffering through the subject?
Proof: Suffering? It was their privilege. Topology is one of the most beautiful branches of mathematics.
Raze: See what I’m talking about, Prof. Well? This is all about micro theorists’ bizarre aesthetics; it’s got nothing to do with training future economists.
Well: Here, I’m inclined to agree. If you want to teach math because of its intrinsic beauty, Proof, you should do it in a math department.
Proof: [exasperated] Even so, you need topology to grasp basic economic theorems, starting with general equilibrium theory.
Raze: [annoyed] Theorists need topology to prove the theorems, but that hardly means that students need to actually learn topology. Why not just give the intuition behind the theorem, point the rare future theorists to some reference works, and move on? A single lecture would suffice.
Proof: [outraged] A single lecture? This is a top five economics department – and you want us to turn out a generation of ignoramuses?
Raze: Just tell me this, Proof: How empirically relevant is general equilibrium theory anyway?
Proof: There are many applications…
Raze: How many rely on more than a quick intuitive version of GE theory?
Proof: That’s hardly the point.
Raze: Uh-huh. More importantly, how many of our students realize that the sparse empirical applications of GE rely on no more than a quick intuitive version of the theory?
Proof: That would hardly motivate them to study the topic.
Raze: In other words, you keep your students in ignorance of the deep irrelevance of what you’re teaching them, because otherwise they’d be less motivated to study it.
Well: Surely you’re not proposing that we cut theory altogether, Raze?
Raze: Far from it. I think we should teaching empirically relevant theory, using as much math as empirical researchers need to know.
Proof: And according to you, what would qualify?
Raze: Basic supply and demand for starters. Game theory. Information economics.
Well: Doesn’t sound too different from what we already do.
Raze: Actually, it is. First, I wouldn’t teach any more math than you actually need to grasp the intuitive idea. And second, I would immediately follow any theoretical topic with relevant empirics.
Proof: But often the “relevant empirics” directly contradict the theory. See much of behavioral economics.
Raze: That’s a bingo. Our students ought to learn the extent to which standard economic theory correctly describes the real world. I don’t mind teaching influential flawed theories, as long as students realize the severity of their flaws.
Well: I’m worried that our students will barely remain economists if we follow your advice.
Raze: Look, what’s intellectually distinctive about economists isn’t our knowledge of math. It’s our rejection of Social Desirability Bias.
Proof and Well: [in unison, skeptical] What?!
Raze: You know how economists are always saying, “Look at what people do, not what they say”?
Raze: Well, psychologists have empirically confirmed that we’re on to something. When the truth sounds bad, people tend to say – and often believe – falsehoods. Psychologists call this “Social Desirability Bias.”
Proof: What in the world does this have to do with Ph.D. Micro?
Raze: Plenty. One of the main goals of Ph.D. Micro should be to root out Social Desirability Bias from our students. It’s central to “thinking like an economist.”
Well: What, stuff like, “If you put an infinite value on life, you’d never cross the street”?
Raze: Exactly. Some of the wisest words ever said.
Proof: You want to replace general equilibrium theory with a bunch of trivial slogans?
Raze: They’re deep truths, not “trivial slogans.” Yet many of your students have barely heard them.
Well: Could you name some others?
Raze: Sure. I’ll express them as slogans, though each deserves multiple lectures of elaboration.
“If you’re right, why hasn’t anyone gotten rich using your idea?”
“What’s are the relevant elasticities?”
“What precisely is the market failure supposed to be?”
“What are the regulators’ incentives?”
“Immigration is trade in labor.”
Proof: So you want to politicize Ph.D. Micro. [sarcastic] Great!
Well: I have to admit that I share Proof’s concerns, Raze. This isn’t science.
Raze: If it’s true and important, who cares if it’s “science”?
Proof: See, Well? Raze doesn’t even believe in science.
Raze: [losing his cool] Fine, I misspoke. Yay, science! My point remains: We should radically overhaul our Ph.D. Micro curriculum. Proof should stop wasting our students’ time with irrelevant math and theory. He should teach them how the economy actually works, delving into math and theory only insofar as it serves that goal. None of this will “turn our students into sociologists” as long as he instills the deep truths of economics along the way.
Well: I see…
Raze: Actually, since we could never trust Proof to do any of this, you should hand his class over to me.
Proof: [glares daggers at Raze]
Well: Very well. I think I have enough information to make my recommendation to the chairman.
Raze and Proof: [in unison] Namely?!
Well: You both make good points. I’m going to ask the chairman to ask Proof to update his syllabus in light of the last quarter century of research.
Well: That should do it.
Raze: But that will change next to nothing! Proof will be the sole judge of what “needs to be updated”!
Proof: [smugly] I promise I’ll do a scrupulous job.
Well: [self-satisfied] Please see that you do. We’ll revisit this issue again in three years to see how things are going. Until then, colleagues!