15 September 2009

Debating Economics

While the average person may not have noticed, there is an increasingly acrimonious public debate taking place among economists concerning the current state of economic inquiry, especially macroeconomics. You can find links to many of the interventions in this debate here. It makes for good reading (OK!, OK! I'm a nerd!). Having confessed, though, several things strike me as important about the debate:

(1) Especially in his contribution (from The New York Times Magazine a couple weeks back), Paul Krugman makes a point about economic research: it is shot through with "values." Here I do not mean political or moral values (although I think Krugman undersells the directly ideological nature of much of economics). What I mean is what we might call aesthetic values. He repeatedly notes the commitment of economists, when they construct models, to beauty and elegance and such things. This is a point that converges nicely with Hilary Putnam's claims regarding the entanglement of fact, value, and convention in social inquiry. He makes those claims in The Collapse of the Fact-Value Dichotomy.

(2) A second point is that economists seem to have a dangerous disdain for the history of their discipline. In that regard they are operating with an odd view of science. And, as Brad DeLong and Krugman both point out, many economists seem to be more or less wholly ignorant about arguments that have been made before - by economists. In my own neck of the words, I see such amnesia in the rush by modelers to work straight from textbooks instead of figuring out what had motivated various theoretical enterprises in the first place. My favorite example is the urge to sanitize 'the Arrow theorem' from the flatly political context that animated Arrow to work on it in the first place. I regularly advise graduate students to go back and read Arrow so that they will realize that the famous theorem is a rather small part of the initial book. Arrow does not treat it as a technical exercise. He is considerably more concerned with interpreting the result.

(3) Much of the current debate rides on technical arguments that are best worked out in the appropriate venues (i.e., academic conferences and journals). But the notion, floated by several participants, that somehow economists should not be arguing in public - in the press, blogs, and so forth - seems to me fundamentally misguided. In the first place it fundamentally misunderstands the nature of science - assuming that it is thoroughly disconnected from society and politics. Moreover, it neglects the political responsibility of economists who want to interject their work into the policy process or to consult with this or that player in economic markets. Once they do that, economists need to recall the inconvenient fact that we live in (something approaching) a democracy. And, having contributed to the formation of policy or some market experiement, they can surely expect to be held accountable - even where that simply amounts to being held up for public ridicule when they prove wrong. Moreover, if a prominent economist cannot explain to non-specialist readers what is at issue in some technical debate, how can he expect relevant politicians and policy makers to understand it? No economist - committed as she would be to 'science' - should expect her word to be taken on authority!

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