What is economics’ breakthrough of the year?
frm Merijn Knibbe
Some of the more important economic studies are never published in journals – let alone A+ journals. They stay within the walls of the Statistical Institutes, like Eurostat. Or they are published, anonimously, in the Bulletins of Central Banks. See Box 1 on p. 22 of the Bulletin of the Central Bank of Ireland, 2011, first quarter.. That’s a problem, as such publications do not count when economists apply for jobs at universities – which means that people working at for instance the Statistical Institutes will have problems when they apply for a university job. Which means that Universities do not employ people with first hand experience with the construction of economic statistics… That’s bad. And it’s also rather daft – people like Friedrich Hayek, Jan Tinbergen, Milton Friedman and John Maynard Keynes did do this kind of work, for an extended time!
Also, on this site, complaints about the (small) world of university economics are sometimes posted. Who ares! But it seems to be increasingly important that an economist can show a track record of publications in ‘important’ journals (i.e. when they want to apply for a job), prices and comparable tokens of prestige. But ‘prestige’ nowadays seems to have a rather ‘old school’ definition… Time for a change. Maybe this an idea for the World Economics Association:
‘Science’ every year publishes the ‘breakthrough of the year’. Economics are, however, absent from this list. .The newsletter of the World Economics Association might, every year, publish the ‘economic breakthrough of the year’. Possible rules:
1. Any of the 7.000 members of the Association can nominate either one (and only one) article from whichever journal in whichever language, or a book. The reason to include non-english articles and books is simple: these seem to fall outside the scope of the average Anglo-Saxon economist, which means that there will quite some low hanging fruit for the picking.
2. The articles or books are allowed to be anonimous, or to be the work of an institution.
3. The nomination has to include a ‘letter of recommendation’.
4. Selected members of the Association will make up a shortlist. As the Association has a world-wide membership, this committee can ask members to rate articles and books not written in english.
5. Nominations can of course include business economics, consumer science, evolutionary economics, the history of economic thought, economic history and whatever.
6. The focus will be on ‘empirical discoveries’, not on ‘method’.
7. Either a committee can choose the ‘breakthrough’ or an online ‘beauty contest’ might lead to the election of the ‘breakthrough’.
8. Special categories might include: ‘Ph.D.’s of the year’ or a ‘lifetime achievement award’.
Any comments?
“Only empirical discoveries.” If I’m not wrong, this means that out of the box thinking type of breakthrough is out of the contest… Foundations of the science are untouchable, aren’t they?
I strongly agree. Focussing on empirical breakthroghs means finding even more evidence on how wrong the neoclassical explanations are. There´s already enough evidence and remember, empiricism is always about the past and in turbulent times the past isn´t a very helpful guide.That´s like trying to win a race by looking into the rear-view mirror all the time. Instead, in my opinion, we need to focus on theoretical breakthroughs, because this is the only way to “win the race” and more importantly, find a way out of the crisis. Theory is the key.
Stefan,
Apostolis Serlesti, a staunch neo-classical economist, states about monetary statistics while musing about the GFC and why neo-classical models didn’t predict it:
“The problem is that the Federal reserve and other Central Banks have not been producing data consistent with neo classical micro-economic theory”.
And he is right. The Central Banks don’t. After a century or so of neo-classical economics, these ‘scientists’ still have not designed a statistical system consistent with their own concepts…The Central Banks do however produce the flow of funds data which enable people like Koo to show the macro-flow of money, streaming through the economy, powered by the spending decisions of consumers, the government, business and ‘abroad’. Koo’s empirical analysis is of course also based upon a lot of theory – but this theory is based upon definitions consistent with the data produced by the Central Banks. That’s were we should be headed.
By the way – Serlesti is of course ahead of the neo-classical pack, as he understands that there is a fundamental dichotomy between neo-classical concepts and ideas and observable reality (the divisia index proposed by him and Barnett of course does not solve the problem – it’s just a weighted average).
Serletis, A. (2012), ‘Foreword. Macro-economics as a science’ in, Barnett, W.A.’(2012), Getting it wrong. How faulty monetary statistics undermine the Fed, the financial system and the economy pp. , XXI. MIT
Susana,
I stated: “the focus will be on ‘empirical discoveries’”, not: “only empirical discoveries”.
But: as the Science list shows, ‘empirical discoveries’ are much more important in other sciences than in economics. And empirical discoveries can shake the foundations of a science: if I’m well informed the physicists will have a problem when the Higgs particle turns out to be too heavy or too light.
To mention a little discovery of myself: Peter Graeber is right, when he states that market relations do not lead to money, as assumed by neo-classical and Austrian economists, but that money leads to market relations, when I investigated trade between the seventeenth century Dutch traders which colonized the Cape in South Africa with the different hunter/gatherer cq nomadic tribes which they encountered. The hunter gatherers (probably the San, they are described as beach dwellers) had no use for money at all and could only be paid for their labor in perishables like tobacco and gin, if at all, while the nomadic tribes were paid in copper wire which they used to adorn themselves as well as for some rituals and which, as the sources explicitly state, was not used as money by these tribes, as they had other ways to organize the division of labor. The very foundations of neo-classical and Austrian monetary theory are indeed, as Graeber states, wrong. ‘Money’ did not originate from trade – it was the other way around, when we look at the empirical record (and as far as we know. the original money was virtual, not physical, again according to Graeber, which again refutes the very foundations of neo-classical and Austrian monetary theory)
http://mises.org/journals/qjae/pdf/qjae3_4_3.pdf
http://dbnl.org/tekst/rieb001dagv02_01/rieb001dagv02_01_0002.php
If you need additional grist, you may want to get acquainted with my research on The Economic Process; it leads to a fundamental restructure of mainstream economics and to policy prescriptions that result in economic justice and freedom for all. My work has been published in peer-reviewed journals, but not in A+ journals.
The statement “The hunter gatherers (probably the San, they are described as beach dwellers) had no use for money at all and could only be paid for their labor in perishables like tobacco and gin” shows a misunderstanding of the Austrian-school theory of the origin of money. Austrian theory says that trade evolved indirect exchange using widely used commodities. This excludes modern currency for the San who don’t use it. Also contemporary Austrians understand that there were other origins of money such as by Temples. And of course money generates more trade.
Oke, I read a bit more than just the link I provided here, but I’ll check it out.
why should their be a breakthru of the year ?
the science magazine thing is partly std publicity stunt (over the years, you may have noticed that science and nature publish a lot of dubious papers, like arsenic in bacteria or the french antibody dilution crap; my thought has always been that these are publicity stunts)
also, science draws from a wide range of fields; altho it may make you sad, different disciplines move at different rates; over 5-20 year periods, a discipline may be fallow untill some new genius upsets things
this idea that there should be a breakthru is silly; re read Kahnemann’s thinking fast and slow
Right!
And this ‘thinking slow’ happens to a large extent within the walls of, for instance, all kinds of statistical institutes, completely outside the scope and the peer groups and the world of the journals of many academic pundits. They really do not know that many of their concepts does not match observable reality at all (though using these concepts does seem to be a kind of required ritual). This ‘slow’ work should come into the spotlights!
Jesse Frederik has assembled some quotes of Central Bankers about the ´money multiplier´ and, by implication, ‘loanable funds’: It’s crap, crap, crap and crap – according to people actually using the statistics to do something. And the Post-Keynesians (and Austrians too, in fact) are right about fiat money, according to them. But using the ‘money multiplier’ and ‘loanable funds’ idea still can get you published in an A+ journal…
http://www.luxetveritas.nl/blog/?p=1346
Thanks Merijn, Susana, Stefan, & Friends: Fred, unfortunately, there may be few if any more !Kung San who live the ancient way & don’t use money, etc. Also, Carmine (et al), united we may stand and deliver, but divided we shall surely fall, conquered & marginalized as usual.
I’d love to have some help with my deep fundamental revision of the basics, at least some feedback & suggestions if not outright collaboration. Since it is the applied science most married to professional corruption, I see no hope for economics without a thorough rehab & makeover from the seed concepts & basic principles on up, which is what “Awareness & Value: A fundamental theory of economics & natural values” is about.
You can review it at > mm-greenbook.blogspot.com < the time is over ripe, eh?