Neoclassical Economics. Best before: 1500AD
May 23, 2018 8:26 AM   Subscribe

“A lot of economics professors, especially the more junior ones who are more focused on research and really trying to develop new ideas and process new data, there’s an escapism to a large extent, in that their career depends so much on getting published in high ranking journals,” he says. “That deviates from the practical problems of understanding the economy as it truly is and trying to address the policy questions that truly exist, because they’re confronted with the pressure in their own careers to develop these journal articles and the game of getting these journal articles written and published is truly a game in itself that involves so much more from observing reality and trying to make things better.” How economics professors can stop failing us.
posted by Juso No Thankyou (21 comments total) 11 users marked this as a favorite
 
“Economic theory is based so much on mathematical impressiveness, what so often happens is that a lot of political leaders have just looked upon economics, not as a science that actually tells us what’s going on in the world, but as just another form of advocacy for whatever policies they want to promote.

Yeah, pretty much.
posted by The_Vegetables at 8:41 AM on May 23, 2018 [3 favorites]


“Economic theory is based so much on mathematical impressiveness, what so often happens is that a lot of political leaders have just looked upon economics any form of study, not as a science that actually tells us what’s going on in the world, but as just another form of advocacy for whatever policies they want to promote, often independent of the conclusions drawn by the study.

FTFY.
posted by lalochezia at 9:00 AM on May 23, 2018 [4 favorites]


So this seems to be almost entirely about macroeconomics.

Also, this slight modification applies:

“A lot of ABC professors, especially the more junior ones who are more focused on research and really trying to develop new ideas and process new data, there’s an escapism to a large extent, in that their career depends so much on getting published in high ranking journals,” he says.

“That deviates from the practical problems of understanding ABC as it truly is and trying to address the ABC questions that truly exist, because they’re confronted with the pressure in their own careers to develop these journal articles and the game of getting these journal articles written and published is truly a game in itself that involves so much more from observing reality and trying to make things better.”


Also, its not the point. Applied policy is for applied applied policy researchers, empirical and theoretical research whose primary goal is advancing knowledge is for academics. Economists have studied important issues like, what are the health and income effects of receiving state-sponsored healthcare? Seems pretty relevant to me.
posted by MisantropicPainforest at 9:06 AM on May 23, 2018 [1 favorite]


Some economists could stop "failing people" if they started giving a shit over the impact of their flawless models (well, until they are disproven and then they blame excel errors or "unforeseen circumstances") on actual living people, or admitted they are monsters who only care to get their next book deal and luxury vacation package/conference paid by banks and the people their agenda helps.

The moment I've decided most economists are essentially astrologers or grifters was seeing the austerity hawks here shocked VAT income fell well below predictions after cutting purchasing power and increasing taxes. Either they were being disingenuous, or, citing Gene Wilder.
posted by lmfsilva at 9:33 AM on May 23, 2018 [5 favorites]


In my undergrad (CS/geography) I'd always wished that they'd spend more time on the philosophy of models. What is it? What is its purpose? How does it relate to the world? How strong should your inferences be? There's something you often hear from highschool students experiencing math of physics for the first time: "the universe is made of math!" Reader, it isn't. Models are the blow-up dolls of reality.
posted by klanawa at 9:34 AM on May 23, 2018 [4 favorites]


I hate this article. It reads like weird intellectual dark web piece in the New York Times - some stuff is wrong, and the stuff that isn't wrong is being framed as "brave truth telling" when it is commonly discussed in the field. Before I explain why, a quick qualifier: I am a professor and an economic sociologist - sociologists have lots of complaints with economists (unrelated to the stuff in the article), but I work with macro- and micro- people all the time, and have coauthored with some as well. Qualifier ends.

First off, it is a caricature of a small field in economics, not the whole field. As MisantropicPainforest pointed out - this is all about macro economics, and even more so about specialized forms of neoclassical macro economics. Based on my conversations, I think that even in those subdisciplines people know that many of the assumptions and models are theory, and differentiate them from empirical results. To be clear, all of us in the social sciences use neoclassical stuff as a punching bag or straw-man when we want to contrast our work with something unrealistically theoretical, so it is hardly a brave revolution to point this out.

Just to give you a sense of the range of economics, take a look at a couple of papers in top econ journals by economists, for example:
Here is a key paper on unilateral divorce "An 8–16 percent decline in female suicide, roughly a 30 percent decline in domestic violence for both men and women, and a 10 percent decline in females murdered by their partners."
Disruptive peers in elementary school have lifetime effects

There are also lots of weird attacks in the article that suggest that these folks have a chip on their shoulder (they also seemed to have not gotten tenure at some places and are very bitter). They attack the University of Chicago repeatedly (including the sociology department), and are angry at various Deans, journals, etc.

There are cool critiques of the field, but this isn't one.
posted by blahblahblah at 9:44 AM on May 23, 2018 [11 favorites]


Some economists could stop "failing people" if they started giving a shit over the impact of their flawless models (well, until they are disproven and then they blame excel errors or "unforeseen circumstances") on actual living people, or admitted they are monsters who only care to get their next book deal and luxury vacation package/conference paid by banks and the people their agenda helps.


Oh god.

Most academic economic research is not primarily theoretical and does not use formal theoretical models. Most of it is applied empirical work, trying to answer very narrow questions because valuing causal identification is more important than answering interesting questions.

Whenever professional economics gets discussed here I always scratch my head---my experience talking to academic economists, working with them, reading their work, is that they are asking less interesting questions but answering those questions pretty well.

For example, many critics say things like, "duh models are not reality and people act different from how their models say they should!!!". Which is why there's a whole subfield called behavioral economics.

For example, many critics say things like, "economists don't care about politics!", which ignores the whole subfield of political economy.

For example, many critics say things like, "economists don't care about history!", which ignores the whole subfield of development economics.

Ditto for empirics and applied econometrics...
posted by MisantropicPainforest at 10:06 AM on May 23, 2018 [6 favorites]


In my undergrad (CS/geography) I'd always wished that they'd spend more time on the philosophy of models. What is it? What is its purpose?

I went back to school for accounting about a decade ago, and ended up leaving with a degree in economics instead because I simply couldn't put it down. I did not end up working in the field, but it was all I could pay attention to for several years.

Speaking just for my program: we talked about this a ton in every course, at least once I got past the 101/102 business prereq stuff.

I'm mostly with blahblahblah: many good critiques of the field exist, but this one isn't on the list.

Upon preview:
Whenever professional economics gets discussed here I always scratch my head---my experience talking to academic economists, working with them, reading their work, is that they are asking less interesting questions but answering those questions pretty well.

Yeah, that matches my recollection.
posted by mordax at 10:16 AM on May 23, 2018 [3 favorites]


as one of these young assistant professors trying to publish in high ranking journals (I've not watched the 30 minute video, but I'm assuming the pull quotes are generally representative)
1) Yes, this is basically about macroeconomics, and not even all macroeconomics, just a particular type of business cycle modeling. Plenty of macroeconomics is not at all about this or the esoteric math, and the vast majority of economists are neither macroeconomists nor doing the kind of derivatives pricing financial economics that also gets mentioned in the article. And it's *just not true* that even the kind of macroeconomists who do that stuff (me included) have not reacted to the financial crisis or thought about it, or that we've gone back to doing exactly the same stuff as before.
2) It would be nice if there were greater incentives in economics departments to do work-person-like analysis of policy, and it's true that I probably won't get tenure for doing that kind of applied policy research. But, again, this arguably applies to the vast majority of academia, where tenure is rewarded to some people for doing very innovative policy research, but the majority of people with tenure are studying highly specific proteins or particular 17th century authors; these are worthy areas of study, and we can relate them to Big Questions, but that's also true of the esoterica in economics. Economists didn't invent impact factors or citation counts as a method for evaluating tenure.
3) To emphasize point (1), I glanced at the ToC for the most second-to-most-recent American Economic Review, the journal they mention specifically (the most recent one is a conference proceedings volume). I haven't read every article, but I think exactly one of the eight articles is specifically related to the critique of DSGE models they're making, and it in fact is a model that allows for lots of heterogeneity in wealth and consumption in order to realistically understand how the financial system and wealth evolve over the business cycle and how monetary and fiscal policy work in such an environment; arguable a more 'real world' approach to modeling. It's also quite complicated, because you need lots of esoteric math to talk about those issues with the level of rigor that was needed to think about those kinds of issues sometimes!
4) The economists you disagree with politically are not necessarily the entire economics profession, and people who criticize the mainstream economic consensus are not necessarily shoved into obscurity. Dani Rodrik writes frequently against free trade agreements and is at Harvard. Piketty, Saez, and their various coauthors are well regarded, their work on inequality is influential and debated on the merits, and they have perfectly nice jobs within research departments. Sometimes people have contrarian ideas and are able to succeed because they do good work with rigor. There are plenty of reasons people don't succeed in academia; it's not a pure meritocracy. There are critiques of the profession-qua-the-profession, and there are critiques of economic research that are valid. But the know-nothingism of this kind of interview is so, so tedious and not actually productive.

I guess I'm just restating a little bit off what blahblahblah and Misanthropic Painforest have talked about, because (1) I got hung up writing an overlong comment and (2) I had to meet with my students to discuss their term papers (incidentally, which are nice pieces of applied policy analysis, with nary a derivative in sight).
posted by dismas at 10:23 AM on May 23, 2018 [6 favorites]


Whenever professional economics gets discussed here I always scratch my head---my experience talking to academic economists, working with them, reading their work, is that they are asking less interesting questions but answering those questions pretty well.

As someone trained as a socioeconomic historian, this is my experience as well: the maths are right, but the questions are not the right questions. Like: what does economic development mean for living standards, rather than just GDP/capita? Or how does power and status distort markets? What do you do about goods with inelastic demand?

That said:

For example, many critics say things like, "economists don't care about history!", which ignores the whole subfield of development economics.

and also historical economists

But the neoclassical economists are more influential in public policy and they really, really don't understand history - not even Adam Smith.
posted by jb at 10:30 AM on May 23, 2018 [5 favorites]


Whenever professional economics gets discussed here I always scratch my head---my experience talking to academic economists, working with them, reading their work, is that they are asking less interesting questions but answering those questions pretty well.


Good for you. You know what my experience is? Economists on television and newspaper opinion pages saying a bank is solid, austerity is needed and maybe even further austerity is on the horizon, our country would collapse under a left-wing coalition, and months later that bank crashing and some rumblings from the EU that some measures that brought suffering to hundreds of thousands of people were unnecessary, and hey, we're still here, left-wing coalition and all.

If your class is so concerned about being called "astrologists", publicly denounce the grifters in it.
posted by lmfsilva at 10:34 AM on May 23, 2018 [15 favorites]


Sometimes people have contrarian ideas and are able to succeed because they do good work with rigor. There are plenty of reasons people don't succeed in academia; it's not a pure meritocracy.

I think if you don't acknowledge the huge incentives for economists to argue, one way or another, in favor of increasing the wealth of those already wealthy, you can't be honest about the effect economics has on society.
posted by praemunire at 11:14 AM on May 23, 2018 [3 favorites]


I've said this before but the problem with economics is if you have a degree in it there will always be a rich guy willing to pay you to tell them what they want to hear. My impression of the people I've known in academic Econ is also that they are generally doing more nuanced and empirical things than you see from the talking head/political advisor type of economist.
posted by atoxyl at 11:48 AM on May 23, 2018


In my one required Econ course in college over 40 years ago, my personal bullshit detector was pinned (partly as the lecturer considered himself a 'personal friend' of Milton Friedman). But since then, I've seen the entire field declining from "the dismal science" to "economics is to the humanities as astrology is to astronomy", and basically becoming the testing ground for those who want to make academia a slave to power instead of speaking to power. As a group, I trust Science Fiction Authors more than Economists (especially since some of the better ones are MeFites).
posted by oneswellfoop at 2:58 PM on May 23, 2018 [1 favorite]


Pundits on the TV claiming to be economists are like pundits on the TV claiming to be climate scientists, or concerned mothers, or small business owners. It's a pose.

The problem of pundits claiming expertise in a field and then advocating for either their own pet theory that's not been battered by the scientific process, or just straight up arguing for things that have been disproved, is a known problem that's wider than just economics. It's worse in economics than it is in, say, climate science, but that's only because climate scientists can point to a graph of average global temperatures and say 'fuck off'. It's harder to do in economics because climate scientists don't have people looking over their shoulder trying to work out how to take their insights and use them to break the climate.
posted by Merus at 7:31 PM on May 23, 2018


Despite all the attempts at dismissal, it still remains the truth that economics has a long way to go in refuting the lies of neoliberlism that it helped establish. If important other work is being done in economic theory, then why is it not filtering through more? That piece is very short on details granted, but tinkering around the edges is not going to cut it.
posted by blue shadows at 10:23 PM on May 23, 2018


These are people in think tanks. Lobbying firms. Expert witnesses writing reports in anti-trust cases. You can't put this off on TV happening to hire a few blow-dried posers. Any monster of late capitalism wanting to argue that it's really for the best that he pay no taxes and not be regulated at all is able to hire a squadron of economists with prestigious degrees and positions to advocate for whatever he wants advocated.
posted by praemunire at 11:43 PM on May 23, 2018


I've enjoyed the discussion here, especially from those with some skin in the game. Most of Renegade's output, at least in this article/30 min discussion format tends to suffer from similar problems those brought up here. You end up being a little over-reductive in places, or you don't have a voice on the other side of the fence, or you just can't go into enough detail. That's the nature of the beast. That said, I'd much rather have the output that gets people to think about these issues than not at all. I mean, can you remember hearing a similar discussion on the BBC, or whatever your country's analogue is? I can't.

It's probably worth mentioning here for those who don't know that Renegade Inc. came into being on the back of a film that won quite a few awards. Economists here will probably hate it for reasons similar to those above, but like this article, it's not really aimed at you.
posted by Juso No Thankyou at 1:09 AM on May 24, 2018


I think if you don't acknowledge the huge incentives for economists to argue, one way or another, in favor of increasing the wealth of those already wealthy, you can't be honest about the effect economics has on society.

Everyone has this incentive, economists included. My point is that, again, these guys just are posturing as the only brave truth-tellers in the profession that won't allow brave truth-telling, when the truth is more that there is plenty of healthy debate within the profession and that debate does spill over into the popular discourse, although perhaps not as much as one would like, and that most economists don't get the jobs we want or think we deserve because that's the nature of academia.

I understand why people are frustrated with economists given that there seems to be an economist behind every policy or business decision you don't like, and I'll concede that the profession is sort of uniquely positioned in that way moreso than, say, the median classicist. And believe me, I know that there are plenty of folks out there who had a shitty experience in their 101 class that made them think that the whole field wasn't worth exploring. But my point is that these dudes are capitalizing on that frustration by slinging bullshit themselves in an effort to sell a book, and it weirds me the hell out that people are taking what they claim at face value.

Economists here will probably hate it for reasons similar to those above, but like this article, it's not really aimed at you.

Okay but I guess I take issue with something not aimed at me, but that nevertheless is lying about what I do and/or believe, y'know?
posted by dismas at 10:10 AM on May 24, 2018 [3 favorites]


there seems to be an economist behind every policy or business decision you don't like, and I'll concede that the profession is sort of uniquely positioned in that way moreso than, say, the median classicist.

I love classicists - and any ancient history specialists. But I'm not sure I would get them to set policy. Not that they would re-institute classical slavery or gladiatorial games ... but maybe we'd end up with way too much money spent on chariot races or naked wrestling.

/blatant stereotyping
posted by jb at 10:15 AM on May 24, 2018


money spent on chariot races or naked wrestling.

finally a policy we can all agree on
posted by dismas at 12:54 PM on May 24, 2018 [1 favorite]


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