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from Peter Radford

I want to note, with sadness, the death of Alan Krueger who was one of those economists undaunted by the existence of the real world and all its complexity, and had the courage to present conclusions based on empirical work rather than on pure theory.

Others will write more cogently than I can about his impact on the profession, so I will simply note that his work, with David Card, on debunking the notion that a rise in the minimum wage will always cause higher unemployment ended the anti-social grip of textbook economics on a very key issue for tens of millions of his fellow citizens.  And ended that grip on a positive note.

So much did that research roil the ideologically pristine waters of mainstream economics that no less a character than Nobel prize winner James Buchanan wrote in the Wall Street Journal (where else?), that Krueger and Card were undermining the very credibility of economics as a discipline and that they and their allies were nothing but “a bevy of camp-following whores.”

Such is the sensitivity of the mainstream to criticism.  Such is its devotion to data driven thought.  Such is its commitment to scientific discovery.

It is the likes of Buchanan that drag the reputation and standing of economics into the mud.  The willful ignorance that such erstwhile experts propagate in the name of intellectual rigor and in defense of economics “as a discipline” is in sharp contrast to the refreshing and humane work of those, like Krueger, who dare to think and respond to real world data.

Economics is a social science.  It is not an empty pursuit of an ideologically determined logic, despite whatever Buchanan and his confreres might assert.  The mainstream has forgotten, or more likely abandoned, the “social” in the social science in order to pretend the science.

And a pretense it is in the absence of real world data.

I am more familiar with Krueger’s work on inequality.  His efforts at calling attention to what he called the “Great Gatsby Curve” is another instance of his daring to throw dirt into the wheels of the mainstream.  That higher inequality is associated with lower inter-generational socio-economic mobility radically undermines the idea that inequality does not matter.  Recall the infamous and insensitive comment by arch-villain Robert Lucas, who’s said in 2004:

“Of the tendencies which are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on the question of distribution.”

There are few more succinct statements of the utterly anti-social stance of mainstream economics than that.  Damn the evidence. The preservation of something called  “sound economics” simply does not allow certain topics into the discussion.   Why not?  Because the intrusion of facts might undermine central assumptions needed to prop up the logic.  And logic matters above all else, especially reality.  Lucas has always been, in my mind, the archetype of what Keynes was describing when he said: “how, starting with a mistake, a remorseless logician can end in bedlam.”

Krueger will be remembered very differently.  He tried to begin in facts.  He then applied his logic.  He rarely, if ever, arrived in bedlam.

He will be missed.

  1. ishi
    March 21, 2019 at 1:59 am

    The famous Krueger and Card study is still being debated since in USA alot of people are promoting a 15$/hr minimum wage (which is actually just a living wage if you live in an urban area) . I heard he died ( on the radio) at age 58 .Most men in USA live longer than that. I dont have problems with purely mathematical toy models like Lucas’ RE or Buchanan’s ‘public choice’, but they applied them to ‘public policy’–and both were vile people. I read Lucas’ noble prize speech. Physicists use alot of toy models but they do not assume their tinkertoy models represents reality –unlike Lucas , who thought his tinkertoys could create everything from humans to skyscrapers. Buchanan was similar — dressed up his biases into very basic mathematics (if it can be even be called that) , and sold it as economics. Koch brothers bought it.

  2. Robert Locke
    March 21, 2019 at 9:35 am

    Be careful, Peter, what you say about the Mont Pelerin Society, Wilhelm Röpke was its President, 1961–1962, Ludwig Ehard a member, and they were involved with many others in creating Germany’s social-market economy after WWII. Respecting free markets never meant that the society in which they operate was of no importance. On the contrary, Ropke said that free markets succeed in societies with a large middle class, and it was the obligation of government to pursue policies that would create the right social conditions in which free markets could thrive.

  3. Helen Sakho
    March 22, 2019 at 2:58 am

    Economics is neither a science nor social. It is a mishmash of self promoting positions that cause confusion with a domino effect. The kind of confusion that is exported globally and keeps generations of students hoping to survive to find their way out in the hope of gaining a degree and job.
    RIP all those who made a contribution in some way.

  4. Ken Zimmerman
    March 29, 2019 at 8:09 am

    James Buchanan over years of ideas not working and hundreds of setbacks morphed into a shill for both billionaires and racists. The worst of all possible worlds. After his surrender to the forces of evil, imagine how he felt when some economists, including Alan Krueger began to “blow his cover.” Not responding as he did to Krueger’s research would have not only accelerated his academic decline but would have cost George Mason University millions of dollars in contributions from folks like the Kochs.

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