Hating on Econ
My favorite section in Diane Coyle’s The Soulful Science: What Economists Really Do and Why It Matters tries to figure out why economics enrages as often as it bores:
Mechanical, mathematical, removed from the “real world,” reductionist, autistic – why do so many people, even so many economists, insist that these descriptions characterize the subject, which they portray as unchanged in more than a generation?
Her four main “mutually reinforcing reasons”:
1. The Public Face of Economics. “What the nonspecialist sees of economics is largely the kind of macroeconomic debate covered in the news programs and newspapers.” She avers that most of this econ is (a) “of poor quality and spuriously precise”; (b) “jargon-ridden and possibly not understood even by the person… spouting the jargon on television”; (c) partisan or business P.R. In short, “When a critic charges economists with only caring about money, it’s easy to believe, as that’s all we’re seen to talk about in public.”
2. The Use of Mathematics. Mathophobes overestimate how important the math really is. “We use the mathematics for clarity and to ensure logical consistency.” Move on, nothing to see here…
3. The Scientific Method and Literary Culture. “Economics is a science not because it mimics the same specific techniques or equations as natural scientists, nor because it consists of falsifiable statements which would keep Karl Popper happy, but because it tries to model human behavior in general statements (or equations) with relatively few variables and seeks to bring the models face to face with empirical evidence.” And lots of people hate this idea. “[M]any of the critics of economics, especially those working in the humanities, simply do not accept that it is appropriate to study human culture and society with this methodology…”
4. The Politics of the Critique. “[M]any if not most of the legion of critics of economics are left of center in their politics.” But “There are economists of all political persuasions, for economics is a method of thinking about issues, not a set of conclusions.”
I have two reactions to Coyle’s list.
First, after two decades in econ, I’m convinced that #4 inspires 90% of the hate. Sociology is almost as bad by measure #3, but humanities professors bear it no ill will. In any case, if leftism were true, leftists should despise our profession. For Coyle to protest that econ “is likely to cut across conventional political orthodoxies” is scant comfort to all the intellectuals who swear by conventional left-wing orthodoxy. Even worse, self-styled leftist and moderate economists typically accept an array of specific contrarian pro-market positions. I’ve even talked to Marxist economists who favor a free market in human kidneys! In the face of leftist displeasure, then, self-respecting economists have no choice but to stand our ground and tell them, “It’s not us, it’s you.”
Second, contrary to Coyle, critics’ complaints about excessive math are justified, and not reducible to opposition to “bringing models face to face with empirical evidence.” Especially in economic theory, math rarely “brings clarity.” Math more often leads to neglect of important facts and confusion about irrelevant mathematical issues. Indeed, Coyle’s book strikingly confirms my position here. Almost all of the advances of the last thirty years that she hails are empirical, and almost none of these empirics even hinge on technical econometrics. Yet during these decades, economist theorists enjoyed great status and published vast numbers of “top” papers that Coyle damns with faint praise. Even worse, these theorists have emotionally taxed more empirically-minded economists with soul-crushing coursework and faux incredulity (e.g. “I can’t take your claim seriously without a formal model”).
Unlike Austrian economists, I have no principled objection to mathematical econ. I just think that we should evaluate mathematical econ empirically – and admit that in hindsight, the vast majority of it fails the cost-benefit test. While many complaints about econ are unjustified, this one is, and it’s time to clean house.