Home > Uncategorized > Dani Rodrik disses rethink economics students (IV)

Dani Rodrik disses rethink economics students (IV)

from Lars Syll

1390045613Economics students today are complaining more and more about the way economics is taught. The lack of fundamantal diversity — not just path-dependent elaborations of the mainstream canon — and narrowing of the curriculum, dissatisfy econ students all over the world. The frustrating lack of real world relevance has led many of them to demand the discipline to start develop a more open and pluralistic theoretical and methodological attitude.

Dani Rodrik has little understanding for these views, finding it hard to ‘understand these complaints in the light of the patent multiplicity of models within economics.’ Rodrik shares the view of his colleauges Paul Krugman, Greg Mankiw and Simon Wren-Lewis — all of whom he approvingly cites — that there is nothing basically wrong with ‘standard theory’ and ‘economics textbooks.’ As long as policy makers and economists stick to ‘standard economic analysis’ everything is fine. Economics is just a method that makes us ‘think straight’ and ‘reach correct answers.’

Writes Rodrik in Economics Rules:

Pluralism with respect to conclusions is one thing; pluralism with respect to methods is something else … An aspiring economist has to formulate clear models … These models can incorporate a wide range of assumptions … but not all assumptions are equally acceptable. In economics, this means that the greater the departure from benchmark assumptions, the greater the burden of justifying and motivating why those departures are needed …

Some methods are better than others … For some these constraints represent a kind of methodological straitjacket that crowds out new thinking. But it is easy to exaggerate the rigidity of the rules within which the profession operates.

Although Rodrik often likes to present himself as a kind anti-establishment economics iconoclast, when it really counts, he shows what he is — a mainstream neoclassical economist fanatically defending the relevance of standard economic modeling strategies.

So, all you young economics students that want to see a real change in economics and the way it’s taught — now you know where you have Rodrik, Mankiw, Krugman & Co. If you really want something other than the same old mainstream neoclassical catechism, if you really don’t want to be force-fed with mainstream neoclassical deductive-axiomatic analytical formalism, you have to look elsewhere.

Heterodox economics, in the first instance, is a rejection of a very specific form of methodological reductionism. It is a rejection of the view that formalistic methods are everywhere and always appropriate.

Tony Lawson

  1. Paul Schächterle
    December 24, 2015 at 11:51 pm

    I assume “benchmark assumption” are assumptions like:
    — people prefer to starve in their spare time if the wage rate gets low enough and
    — production gets less productive if large quantities are produced.

  2. December 25, 2015 at 1:48 am

    Part of the invention of the social sciences was substituting “formal” or “naturalistic” methodologies for “historical” or “humanistic” approaches to understanding human actions. After all the basis of the social sciences is that human actions are really “behaviors” resulting from “natural laws.” This sounds familiar because it is the same step the physical sciences (most notably physics) took early in their development. Later on the physical sciences largely rejected this approach as unproductive. But the social sciences just kept on that unproductive path. And economics prides itself on being the most “social scientific” of the social sciences. Still unproductive but at least consistently unproductive.

  3. December 28, 2015 at 8:56 am

    I have no problem with ‘benchmark assumptions’ if one is writing a rigorous paper. (if you are writiong poetry or humor or science fiction, or fantasy etc then i basically feel anything goes. ). As an english speaker, I would say benchmark assumptions include things like basic english grammar and spelling, and also basically all of accepted math based on ZFC set theory (ie arithmatic, calculus, de’s etc) For econ, there is micro and macro. I take the view that you start with micro, and can use that for some phenomena (eg people want to live, and they have preferences and a budget, so they spend their time and money as best they can according to those). One also tries to derive ‘macro’ from micro—when dealing with many people, or whole societies, or the world. Much of what I have seen in mainstream economics journals (which i rarely read these days) however include too many ‘benchmark assumptions’ (perfect rationality and information, no ‘menu dependence’, things like convex preferences, assumptions about ‘discount factors’, very little concern for ‘convergence to equilibrium’). Alot of this is theology–those benchmarks are actually biases. Also, those biases come from the way people are trained and employed—they learn one bag of tricks, and then make a living using them. (They can always find something under a streetlight without havijng to ever venture into the dark). (I’d add even using ZFC as a math benchmark is open to dispute.).

    Also, my perusing of economics has always led me back to my view is not that ‘formalism’ is the problem, but rather that they are using the wrong formalism. (I think this is also true for marxism, with its ‘falling rate of profit’, ‘organic composition of capital’ etc. and also even Piketty with his (r, g). . It seems like people are doing calculus using Newton’s theory of fluxions. (Noone even really uses Einstein’s tensor notion for general relativity—they use fiber bundles, etc. and you can say more in fewer lines—but economics is much easier).

    The last modern economics text i glanced at was by Mankiw—it seemed mostly defined by what it left out, and was almost a throwback to Samuelson’s 50’s text. I don’t think anyone thinks that way anymore, or writes that way—anymore than they read and write Latin and use as textbook excercizes fables of aesop or homer. Standard economic writing may go the way of other ‘vanishing languages’ or the world. Sure, keep them around, but they belong in museums or in isolated preserves. Alot of modern science is discussed even in places like Plato’s or Socrates dialogs, and i slogged through a few of them, but there are faster algorithms.

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