Home > Uncategorized > Time for critics of economics critics to move on!

Time for critics of economics critics to move on!

from David Orrell and WEA Commentaries

There is a growing trend for economists to write articles criticising the critics of economics. These articles follow a similar pattern. They start by saying that the criticisms are “both repetitive and increasingly misdirected” as economist Diane Coyle wrote, and might complain that they don’t want to hear one more time Queen Elizabeth’s question, on a 2008 visit to the London School of Economics: “Why did nobody see it coming?”

Economist Noah Smith – writing in a blanket critique of an extract from a 140,000 word book by John Rapley – agrees that “blanket critiques of the economics discipline have been standardized to the point where it’s pretty easy to predict how they’ll proceed.” Unlike the crisis then! “Economists will be castigated for their failure to foresee the Great Recession. Some unrealistic assumptions in mainstream macroeconomic models will be mentioned. Economists will be cast as priests of free-market ideology, whose shortcomings will be vigorously asserted.” And so on.

The articles criticising critics then tell critics it is time to adopt a “more constructive tone” and “focus on what is going right in the economics discipline” (Smith) because “only if today’s critics of economics pay more attention to what economists are actually doing will they be able to make a meaningful contribution to assessing the state of the discipline” (Coyle). If the critics being criticised are not economists, the articles often drive their point on tone home by implying that they don’t know what they are talking about, are attacking a straw man1, or (not these authors, but a popular choice) are like climate change deniers (see also here and here).

Speaking as an early adopter of the Queen Elizabeth story (in my 2010 book Economyths, recently re-released in extended form), allow me to say that I agree completely with these critic critics. Yes, economists failed to predict the most significant economic event of their lifetimes. Yes, their models couldn’t have predicted it, even in principle, based as they were on the idea that markets are inherently self-stabilising. And yes, economists didn’t just fail to predict the crisis, they helped cause it, through their use of flawed risk models which gave a false sense of security.  read more

  1. Garrett Connelly
    September 10, 2017 at 1:27 am

    Yes. And the read more is a good expansion.

  2. Craig
    September 10, 2017 at 3:47 am

    Actually, it’s time economists started advocating specific policies that are pinpointed to resolve modern economy’s chronic and inherent problems. Good luck with that, because they’re almost entirely stuck in abstract theoretical and mathematical abstractions and hence miss very significant economic insights available by simply looking, that’s literally looking at… commerce, what occurs there and how fiscal and monetary policies could be best effective at certain points in the economic/productive process.

  3. September 11, 2017 at 12:08 am

    How about we make a deal? We’ll move on from critiques of failing to predict and helping to cause the 2008 crisis when economists move on from reciting the 1780s/1890s bugaboo about workers assuming there is only a fixed amount of work to be done — the so-called lump-of-labor fallacy that Noah Smith parroted yet again in a Bloomberg View column four days ago.

    The fallacy claim sure ain’t no “data revolution” or “behavioral economics.” It’s good old-fashioned colonialist snobbery dressed up as Econ 101 textbook dogma.

    Unfortunately, I am afraid the economists will not give up their festering hobby horse. Nor will they reply to the refutation of their bogus fallacy claim. The reason for this, I submit, is that mainstream economics is, at its heart, colonialist. The rationale for their supremacy as colonizers is expressed in their disdain for the child-like ignorance of the colonized. The lump-of-labor fallacy claim is the basis for their power/knowledge.

  4. Craig
    September 13, 2017 at 5:47 am

    We need to present a better set of policies that by actually looking at their effects will be irrefutably true, overwhelmingly more beneficial than present policies for both the individual and enterprise and resolve long standing deep systemic problems. Showing this repetitively to the general public and the small to medium sized business person will create a tipping point and rapidly developing consensus for such policies.

  5. September 13, 2017 at 12:21 pm

    Unfortunately, this discussion suffers the same over simplifications and lack of judgement as most critiques of economists and economics. It’s worth citing to Andrew Pickering one more time. In his book, “Constructing Quarks: A Sociological History of Particle Physics,” he says,

    In the scientist’s account, experiment is seen as the supreme arbiter of theory. Experimental facts dictate which theories are to be accepted and which rejected. There are, though, two well-known and forceful philosophical objections to this view, each of which implies that experiment cannot oblige scientists to make a particular choice of theories. First, even if one were to accept that experiment produces unequivocal fact [highly problematic], it would remain the case that choice of a theory is underdetermined by any finite set of data. It is always possible to invent an unlimited set of theories, each one capable of explaining a given set of facts. Of course, many of these theories may seem implausible, but to speak of plausibility is to point to a role for scientific judgment: the relative plausibility of competing theories cannot be seen as residing in data which are equally well explained by all of them. Such judgments are intrinsic to theory choice, and clearly entail something more than a straightforward comparison of predictions with data.

    Also, the conduct and results of experiments (observations) are always disputable. They are fallible. This fallibility arises in two ways. First, scientists’ understanding of any experiment is dependent upon theories of how the apparatuses/methods perform, and if these theories change then so will the data produced. More far reaching than this, though, is the observation that observational reports necessarily rest upon incomplete foundations. Here the issue of judgement arises again. A judgment by the scientist is required, that enough has been done by the observers to make it probable the results of the observations are workable and their reported meaning is correct. Such judgments can always, in principle, be called into question.

    So, the criticism of economists that they do not use data and theory to “falsify something important” misses the mark. The relevant criticism is that economists do not have and have no way to gain relevant experience to be able to make practical judgements about either plausible theory vs. implausible theory, or workable vs. unworkable observations and observational reporting. As Pickering notes this task is not easy in sciences such as physics, where the study matters are relatively stable exclusively physical relationships. The task is more difficult for the cultural and physical relationships that make up human collective life.

    All the social sciences suffer these same problems, not just economists and economics. The earliest theories and observational work of sociologists, political scientists, anthropologists, and psychologists were without a doubt often naïve and puerile. Unlike economists, however, these social scientists were forced into direct and often threatening contacts with the matters of their study (human culture). Like a barroom fighter, if they wanted to save themselves from inconsequence and beating after beating, they learned from hard experience which theories and ways of observing for their science made sense. And they learned this from the very people who created the matters they wanted to study. This symbiotic relationship not only made them better scientists, but also made their advice and recommendations more useful and relevant. Through several accidents of history, economists never had or have such opportunities. Most relevant I think among these accidents is first that economics is the most mathematized of the social sciences, second that economics tended to attract students with lesser intellectual curiosity, and finally that economists early on formed mutually advantageous relationships with the rich and powerful elements of society.

    Finally, like economists, social scientists in general have done a poor job of forecasting and planning. Anthropologists and sociologists failed to predict or provide any sensible interpretations of the American racial and political confrontations during the last 100 years. And psychologists have not improved much in either their interpretive theories or their action plans for dealing with serial killers since Jack the Ripper. Don’t believe all you hear about “profiling” on TV. And there’s no doubt that global political and economic development has not followed even slightly the theories of political scientists and anthropologists. Finally, the social science theories and observational studies regarding sexual predation and treatments literally create many more problems than they could ever solve. All social sciences are still nearer to soothsaying than to human-based science. Economics is without question the worst case for these problems.

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