The New Astrology
April 17, 2016 11:35 PM   Subscribe

Surveys indicate that economists see their discipline as ‘the most scientific of the social sciences’. What is the basis of this collective faith, shared by universities, presidents and billionaires? Shouldn’t successful and powerful people be the first to spot the exaggerated worth of a discipline, and the least likely to pay for it? In the hypothetical worlds of rational markets, where much of economic theory is set, perhaps. But real-world history tells a different story, of mathematical models masquerading as science and a public eager to buy them, mistaking elegant equations for empirical accuracy.
posted by Alterity (70 comments total) 29 users marked this as a favorite
I wish that there were different names for the different kinds of economics. It would be helpful to know what you're about to read, someone trying to draw scientific conclusions from the messy data of the real world, or someone who's trying to figure out the will of the market-god.
posted by Kattullus at 12:09 AM on April 18, 2016 [5 favorites]

Filed under "yep."

One easy way to distinguish possibly-science from probably-not-science is convergence. If, after hundreds of years, the factions are still knocking each other's brains out over the most basic ideas, there's probably not a lot of science going on. Either because the universe isn't deterministic in the way they wish it was, or because they don't want it to be.
posted by klanawa at 12:19 AM on April 18, 2016 [16 favorites]

I've said this before (again and again and again)
"Economics is less of a "dismal science" and more of a Pseudoscience."

I'm delighted to have someone scholarly publicly agreeing with me; I just regret possibly losing the honor of origination.
posted by oneswellfoop at 12:22 AM on April 18, 2016 [8 favorites]

"In the history of human thought, science has often come out of superstition. Astronomy came out of astrology. Chemistry came out of alchemy. What will come out of economics?"

-- Bernard Lewis, quoted in Peter Berger's Adventures of an Accidental Sociologist

posted by Harvey Kilobit at 12:26 AM on April 18, 2016 [56 favorites]

There's an old joke about a man hanging out by a lightpost obviously looking for something lost. A policeman happens by, and asks him what he's doing. The man says "I lost my keys over in the alley." The policeman asks "Why are you looking by the light pole, then?" The man responds "it's a lot easier to look over here."

Models, theories, and even entire disciplines are pretty much lightposts.

I think it's interesting that some people don't seem to figure that out by the time they get out of college. It was my math undergrad itself that took the shine off "the enchanting force of mathematics" the article mentions. I'm still amazed at its unreasonable effectiveness and respect it as a tool and an intellectual jungle gym, but wonder how it is that people can't see its limits.

I wonder if it's kindof like inherited wealth. If you really have to prove enough of it, you understand the assumptions it's riding on, the possible alternatives, places where there may have been analytical messes you had to wrangle with, tradeoffs, boundaries. If somebody hands you the keys to a shiny new model, you might just feel cool driving it around.
posted by wildblueyonder at 12:44 AM on April 18, 2016 [9 favorites]

Lots of huge problems here

1) none of our social sciences do well at prediction, largely because we aren't concerned with them as much

2) formal theory is use in a subset of economics. I would venture most articles published in the AER or QJE are not primarily formal theory

3) mathematics != formal theory

4) if economics is a pseudoscience (even though it's a discipline) then so is sociology and political science
posted by MisantropicPainforest at 12:47 AM on April 18, 2016 [12 favorites]

BTW, I saw this article a day ago and was temped to FPP it myself (but backed off to avoid too much "SEE? I SAID THAT.")
I did look into the author, Alan Levinovitz, an "assistant professor of religion at James Madison University [whose] academic work focuses on classical Chinese thought, the philosophy of play, and the intersection of religion and medicine." Of course, he has been criticized for this along the obvious lines of "How could a 'Theologian' Criticize 'Mathematical Economists'?" But his published writing has covered a lot of interesting not-much-related topics, from the role of big-time sports from American higher education (spoiler: he's against it) to a defense of his profession as Professor of Philosophy against an debate talking point from a now-withdrawn Presidential candidate. And he has also written a lot about other "pseudosciences", like "Alternative Medicine". In fact, his first book is about the not-his-official-specialty subject of Food Fads with the mildly attention-getting title "The Gluten Lie". An interesting author who I look forward to more from, whatever he decides to write about.
posted by oneswellfoop at 12:48 AM on April 18, 2016 [6 favorites]

To reiterate, if someone says that economics is only concerned with abstract mathematical theories and has nothing to say about the real world, then they're really just revealing their profound ignorance about the huge field of applied econometrics
posted by MisantropicPainforest at 12:49 AM on April 18, 2016 [10 favorites]

On my reading, he readily admits that other fields of sociology aren't all that scientific, but Economics' claim to be VERY Scientific is not backed up by anything truly factual. "The huge field of applied econometrics" apparently does as good a job predicting Economic trends as Alternative Medicine does at curing disease.
posted by oneswellfoop at 12:55 AM on April 18, 2016 [2 favorites]

Which is fine, because that's not the goal.
posted by MisantropicPainforest at 1:02 AM on April 18, 2016 [3 favorites]

Agree that this can be filed under "yep". Economics has value other than as a means to predict things, and economics can get it REALLY right, but as currently practiced in political systems, many people are clearly getting it wrong as often.

I wish that there were different names for the different kinds of economics.

Are there not?

"Economics" - Generally assumes people are rational actors. This assumption often goes unnoticed.

"Reaganomics" or "Supply Side Economics" or "Trickle-down economics," all also known as "voodoo," or "wrong"

"Chicago school" or "Milton Friedman Economics" - Republican orthodoxy on economics

"Reinhart & Rogoff" - Goofed on excel and won't admit to making a mistake

"Laffer Curve" - Pulled this concept out of our ass

Keynesian economics - Just pay people to work and worry about the debt later on (so far, seems to work more often than not)

Macroeconomics - whole markets, nations, etc.

Microeconomics - hyper focused on smaller things, the basic supply/demand and "taxes as deadweight loss" - oversimplifications in the first year of college most people don't get past and politicians apply with disastrous results. Do you actually know people who refuse to sell a product and make more money just because the government might tax it a LITTLE more? There's way more to it than that, but that's as far as most people get :(

Obviously this list betrayed some of my biases, but if you look at history and the more reasonable economists, there are definitely names for some of these things.
posted by Strudel at 1:03 AM on April 18, 2016 [13 favorites]

... they're really just revealing their profound ignorance about the huge field of applied econometrics

Also behavioral and experimental economics, right?

I'm not sure what to make of the article. On the one hand, I think the admonishments to think carefully about the assumptions and commitments of mathematical models is well-taken. On the other hand, the essay seems to (1) ignore a lot of what goes on in economics, and (2) misunderstand the point of a lot of what goes on in economics.
posted by Jonathan Livengood at 1:04 AM on April 18, 2016 [4 favorites]

His critique isn't really an indictment of the entire field of economics. It's more about the interpretation of economic model projections as prophecy, especially in the political sphere, especially after the crash of 2007/8, and especially given the conflict of interest issues he mentions. I certainly wasn't aware that economists were subject to quite so many overt political influences and incentives: Every economist I interviewed agreed that conflicts of interest were highly problematic for the scientific integrity of their field – but only tenured ones were willing to go on the record. ‘In economics and finance, if I’m trying to decide whether I’m going to write something favourable or unfavourable to bankers, well, if it’s favourable that might get me a dinner in Manhattan with movers and shakers,’ Pfleiderer said to me. ‘I’ve written articles that wouldn’t curry favour with bankers but I did that when I had tenure.’ Some of that happens in other scientific fields, but it certainly isn't the norm, nor is it quite as direct as all that.

Which is fine, because that's not the goal.

But projections about different policy scenarios are one of the most important and common ways that people encounter economic analysis. It would be one thing if these projections weren't reported as absolute truth, but they are often presented as if they are the result of a perfectly objective ideology-free process, just simple math, when in fact there are any number of ideological factors involved in model selection and parameterization (at least in deterministic macro models; speaking less about econometrics). Whether they are intended as prophecy or not, that's generally how they're reported and used in the political discourse - no ideas are serious until we see the projections from some wonk's model, regardless of the massive uncertainty involved in those projections (which is seldom reported, at least in the press), not to mention subjectivity in e.g. multiplier choices. The ideological choices are buried so far under convoluted detail that they can pretend these are certain, rational, bloodless numbers. I'm unsure how much of the blame for that falls on the press vs. the economists, but I'm comfortable saying that economists could stand to be much more forthcoming about foregrounding the uncertainties and assumptions associated with their projections.

When these guys ended up driving the economy into the ditch after we were all told they were the technocratic ideology-free geniuses who would save the world, it shouldn't be too surprising that people might say that economic projections might be better served with a pretty big grain of salt. The field did seem to go through some sort of a reckoning in the wake of Greenspan's fall from grace, but I'm not sure how much of that stuck, and I'm not sure how much of it was visible to the public. Given the increasing role of technocrats in our political discourse, it's even more important that we have a realistic idea of what their projections really signify and how well their projections perform.
posted by dialetheia at 1:19 AM on April 18, 2016 [17 favorites]

Economics isn't any better or worse than other social sciences in terms of the precision of its tools, its theories and its subject matter.

Where it falls down is at the social-level as a scientific community. Many economics departments are funded by wealthy donors (George Mason's Mercatus Center, Florida State University's econ dept., etc.) and function closer to an advocate/client model than a scientific discipline.

Economists do not lose prestige when they make bad predictions if those predictions serve the interests of the very wealthy. Economists who correctly predicted the housing bubble, financial crisis, low growth in Europe b/c of austerity, and low inflation and low interest rates post-recession were not, as a rule, elevated within educational and political institutions.

Following the careers of the top economists serving in the Bush and Obama admins, they're from the top institutions, they return to them, and they mostly have either records of political hackery or no significant records of predictive success. They function like lawyers advocating for maintaining the wealthy's interests, not scientific researchers.

The US's National Academy of Sciences should kick out Economics until the discipline at a social-institutional level starts resembling a functioning scientific community.
posted by airing nerdy laundry at 1:21 AM on April 18, 2016 [52 favorites]

"Economics" - Generally assumes people are rational actors.
So Economists have never come in contact with REAL people?

the point of a lot of what goes on in economics.
...which is to provide their Political and Corporate Masters "scientifically based" excuses to screw over the most people they can. When 99% of the Economic Growth goes to the top 1%, Professional Economists are one of the very few professions that anything trickles down to.

And the "Laffer Curve" actually is a valid concept, in that taxes that are high enough will discourage production. But the reason it is always illustrated without any numbers on its X or Y axes is that taxes in America have never reached that level (except for that 15 minutes when the top rate was 90%, and then only for the very few of the very rich). That is why tax cuts have almost never done anything but increase the government's deficit and debt.
posted by oneswellfoop at 1:28 AM on April 18, 2016 [7 favorites]

What will come out of economics?

For most people, bewilderment, misery and a sense of betrayal. For most economists, the opposites of those things.
posted by Kirth Gerson at 1:46 AM on April 18, 2016 [4 favorites]

His critique isn't really an indictment of the entire field of economics.

I'm not so confident about that. But I'll accept it for the sake of argument. In that case, his target isn't economics, and he shouldn't say in such a blanket way that "the discipline of economics ... is presently so blinkered by the talismanic authority of mathematics that theories go overvalued and unchecked" or that the "foundations of modern economic science" are shaky or that the ubiquity of mathematics "imbues economic theory with unearned empirical authority." He isn't carefully separating out one part of economics and holding it up to criticism. He's even explicit in saying that "the mathiness critique isn't limited to macroeconomics." And the message that several thoughtful readers here have taken away is not that there are parts of economics that are problematic but, like the title says, "By fetishising mathematical models, economists turned economics into a highly paid pseudoscience." That looks like an indictment of the entire field of economics, even if it isn't supposed to be or isn't in its true heart of hearts.

There are many important points made in the article. Those points seem to me to be weakened or obscured by a lack of care in fixing the target.
posted by Jonathan Livengood at 1:53 AM on April 18, 2016 [3 favorites]

There are many important points made in the article. Those points seem to me to be weakened or obscured by a lack of care in fixing the target.
That sounds SO MUCH like the way Economists work.
posted by oneswellfoop at 1:56 AM on April 18, 2016 [4 favorites]

For most people, bewilderment, misery and a sense of betrayal. For most economists, the opposites of those things.

You sure about that?

Anyway the people I've known personally with an academic econ background are actually extremely circumspect about promising anything for sure about the past, let alone the future. Which leads me to believe that when an economist does promise something for sure they're probably trying to sell you something.
posted by atoxyl at 2:00 AM on April 18, 2016 [2 favorites]

noah smith's response, fwiw: "econ diss article by @AlanLevinovitz is very good, but ignores the empirical revolution in micro..."

there are any number of ideological factors involved in model selection and parameterization

"data is never neutral. It always exists in a framework that is laden with ideology"* [1,2,3,4,5]

also btw...
The dirty little secret that data journalists aren't telling you :P
"Numbers carry a veneer of authority and objectivity that words can seem to lack. But communicating with numbers is, in many ways, just like communicating with words. You make decisions about what to emphasize and what to downplay, and about how to convey a full understanding of the subject at hand. Ideally, those decisions lead to presenting the numbers in the clearest possible light. But as with words, inarticulate framing can lead you to muddle rather than clarify."

*'the market' too!
posted by kliuless at 2:11 AM on April 18, 2016 [13 favorites]

oh and...
Noah Smith on Whether Economics is a Science
posted by kliuless at 2:13 AM on April 18, 2016 [1 favorite]

My sophomore microecon theory professor at [famous US institution] warned us at the start, "These models we will study in class will have NO connection to reality." He didn't say because are "approximations", he didn't say because we were not yet skilled enough to use them: he outright emphasized, they are not applicable because their scientific validity is not known. He might have even hinted, if you are not comfortable with this, then studying economics may not be for you.

It's a funny disparity, because economists' ideas are reified in society at large. It's like nobody else got that professor's message. His caveat left an impression, one that doesn't seem to be heeded much elsewhere.
posted by polymodus at 2:23 AM on April 18, 2016 [8 favorites]

I've been reading Economics: A User's Guide by Ha-Joon Chang and it is an excellent way for non-economists to get to grips with what media and politicians present to us as economics. It covers a range of topics, and what each major school of economic thought (including historical types) says about each one. I haven't finished it yet but I'm learning heaps. Chang writes for people with inquiring minds but no formal training in economics, with the goal of educating the public about something our politicians claim to use as the basis of major decisions affecting our lives.

Chang does a kind of damning-with-faint-praise of the currently ascendant neoliberal flavour, and I bet he chuckled when he read this economics-as-astronomy article. He writes like a guy with a good sense of humour.

Mathematics is important to economics, so it's important to get it right instead of presenting a kind of "mathiness". But maths isn't the only important aspect of economics - assumptions about how people behave need to be replaced with real facts, and the public ought to be informed of what each economist Is trying to achieve.
posted by harriet vane at 2:27 AM on April 18, 2016 [11 favorites]

Anyway the people I've known personally with an academic econ background are actually [some things]

But are they bewildered, miserable, or feeling betrayed? Or were you questioning that most people do receive those gifts from economics?
posted by Kirth Gerson at 2:29 AM on April 18, 2016

Surveys indicate that economists see their discipline as ‘the most scientific of the social sciences’.

If I expressed how I feel about this sentence here, the H and A keys would be worn out fast, or the L and O keys (particularly the L).

Most economists repeat a mantra they fancy or matches their political outlook, regardless of practical results. That's religion, not science. Can be argued that the most outspoken economists know very much the policies they are advocating won't work and have their own selfish reasons to push them, but then it's not science or a faith-based system, it's a scam.
posted by lmfsilva at 2:37 AM on April 18, 2016 [1 favorite]

if economics is a pseudoscience (even though it's a discipline) then so is sociology and political science

Political science is a misnomer. Political theory isn't a science, it's philosophy. That's not pejorative. It's possibly the most important branch of philosophy; Aristotle thought so.
posted by justsomebodythatyouusedtoknow at 2:44 AM on April 18, 2016 [3 favorites]

Hmm, I can't help but feel a lot of the dismissals here are coming from people with limited exposure to economics, and that through a distorted lens of mass media.

Like any discipline, it has strength and weaknesses. Some great proponents and some terrible ones. Rather than generalise about an entire field of study, which will almost always be facile, I prefer criticisms that focus on particular failures.

here's what a great Australian economist has to say about the way his field is used and abused, it's internationally relevant.

Harriet, though Chang aligns to me politically, I thought his book about neoliberalism had just as much cherry picking in its examples as those he criticised, unfortunately. His examples were correct, but not the whole story.
posted by smoke at 3:12 AM on April 18, 2016 [4 favorites]

Smoke, I'm not surprised. This book is more of an overview and history of what the field involves, so there's not much room for criticism apart from the general idea of "hey we should all learn about economics which are not neoliberal, just saying". And what is there generally lines up with what I've read from Denniss (that's a great article, btw, so glad you linked it!) and John Quiggin. But I can easily imagine that in a book specifically about neoliberalism he'd stick the boot in and in the process cherry pick to fit his viewpoint. I'm ok with opinionated takes as long as they don't pretend to be detached and rational :D
posted by harriet vane at 4:01 AM on April 18, 2016 [1 favorite]

4) if economics is a pseudoscience (even though it's a discipline) then so is sociology and political science

Political science perhaps, but not sociology or politics, as neither of them attempts to be a science. They're effectively humanities subjects, and of great worth as such. If people treated economics in the same way, it'd be awesome. Instead, people try to put equations to things, quantify it, hunt for objective truth, something that makes little more sense than attempting to do the same for literature or architecture and urban planning.
posted by Dysk at 4:25 AM on April 18, 2016 [1 favorite]

Political science is a misnomer

This is a hand wavy dismissal. Is political science a pseudoscience? Is economics? If the answers to those questions are different, why?

"Economics" - Generally assumes people are rational actors.
So Economists have never come in contact with REAL people?

You're fundamentally misunderstanding the justification for and use of the rationality assumption.

Anyway, can we list economics as a thing mefi doesn't do well? Unless of course it's many of the papers by economists that report positive effects of the minimum wage or negative effects of free trade. Again, not a lot of experience with actual economics research or knowledge of the discipline on display here. Just economics =bad.
posted by MisantropicPainforest at 4:26 AM on April 18, 2016 [3 favorites]

I guess you haven't opened up the pages of the American Sociological Review lately? Sociology is heavily quantitative.
posted by MisantropicPainforest at 4:31 AM on April 18, 2016 [1 favorite]

I have not. I do however read the BSA journal, and while there is indeed a lot of quantitative data gathering, there is less of a tendency to draw conclusions that imply any sort of general quantified causality.
posted by Dysk at 5:03 AM on April 18, 2016

Do modern economists study Marx at all these days?
posted by Artw at 5:38 AM on April 18, 2016

posted by MisantropicPainforest at 5:53 AM on April 18, 2016

posted by Artw at 5:55 AM on April 18, 2016 [4 favorites]

Do modern economists study Marx at all these days?

Piketty did, but so far it seems like he's studied basically everything. (I'm halfway through Capital in the 21st Century now.)

Piketty seems to say that Marx is right in that rising inequality is basically inevitable in capitalism, and only policy or revolution can fix it. But Marx didn't have a lot of data to work with and was writing based on conditions and fears at the time, and didn't foresee that (A) high growth rates mitigate inequality and (B) two world wars and the political waves they caused temporarily lowered inequality a lot in the 20th century.

Piketty has things to say about "fairy tale" economic theories based on cherry-picked data sets or no data at all. It's part of why I'm enjoying such a big nerdy book on economics.
posted by Foosnark at 6:05 AM on April 18, 2016 [1 favorite]

I feel duty-bound to say, since that Business Insider link bukvich just posted is about something I did, that the Business Insider headline doesn't actually describe what I did. Or is that implicit in the phrase "Business Insider headline?"
posted by escabeche at 6:07 AM on April 18, 2016 [3 favorites]

"hunt for objective truth".

I have a feeling objective truth will survive the best attempts of sociology to not look for it very hard.
posted by cromagnon at 6:18 AM on April 18, 2016

escabeche the Business Insider headline does not actually describe the Business Insider article!

I was actually trying to find, and could not, some supposedly Amazon employee who looked at the kindle tracking data and was quoted anonymously as saying that way over ninety percent of the people who bought the kindle edition could not get past page 10 or so before giving up.

Do you happen to know if many economists have read Pikkety's book? There was a NYTimes thing that said around half of them claimed to have read it.
posted by bukvich at 6:27 AM on April 18, 2016

People make sweeping philosophical statements about Economics as a science, and presume that the failings of Economics must be somehow integral to the conceptual basis of the discipline. Alternatively people seem to believe that economists have somehow fallen into some moral trap that better scientists would have avoided and that if the discipline were razed to the ground the problem would go away. The first seems to make much larger assumptions than is necessary to explain what we see and the second seems to me to underestimate the problem.

The problem with Economics is that it is almost always directly relevant to public policy (and so to corporate concerns) and to the ideologically motivated. Economics is often defined as the study of the creation and distribution of resources under scarcity - it is inevitable that possible answers to questions in this area will have implications for the distribution of wealth and income and implications for the structure of production.

Look at what happens when the 'hard' sciences encounter a problem with answers that have actual direct political or financial effects for existing actors. Climate change. Nuclear Energy. Smoking. Nutrition Science. Genetic Modification. Pollution impacts. Drug effectiveness. (Evolution might be relatively non-ideological now, but the genetics research programme of half the world was thrown off course for decades by Lysenkoism.)

For each of these questions, the affected industry throws up clouds and clouds of misinformation. They sponsor rival studies, give grants to reputable universities in a presumed bid to influence conclusions, set up new institutions altogether, initiate a myriad of think-tanks and seek power over government funding. The hard sciences still manage to police their discipline, but at least part of that stems from the presence of uncontroversial research areas that enable comparatively simple assessment of the skills and scientific honesty of the large majority of the field's practitioners.

Imagine if pretty much _every research question_ your discipline encountered generated this sort of response. Not only would the problem be quantitatively worse but it would be qualitatively different because the persistence of your discipline's relevance to vested interests would justify long-term investment over decades and the lack of neutral questions would make identifying (beyond simply corrupt but also ideologically biased) practitioners much more difficult. And that's the difficulties that working scientists would have - the difficulties the general public would have discerning the genuine research conclusions from everything else, honest practitioners from the biased, would be much worse.

That doesn't mean that economists in academia can't do a better job or that institutional arrangements can't be improved. But the disputatious appearance and lack of public trust for economics as a discipline is inevitable given the questions it attempts to answer. This would be true regardless of how closely economists could hew to some sort of philosophically objective empiricism and it would be true if economics were supplanted with some other discipline that attempted to answer the same questions.
posted by Ktm1 at 6:30 AM on April 18, 2016 [19 favorites]

I'm kind of amazed to hear people say things like "this is not a true or false discussion". After some back and forth, it turns out they have a PoliSci degree and that was the preamble to their claim that their opinion carries more weight than puny facts. This is what worries me about political science and economics' roles in our political discourse.
posted by sneebler at 6:30 AM on April 18, 2016 [1 favorite]

"If you laid all the economists in the world end-to-end you still wouldn't reach a conclusion." (I forget where I heard that, but I think of it every time I here an economist present his opinions as facts.) Also, they don't even get a real Nobel prize.

(I felt bad about coming here to join in the pile-on, but then I read the article, especially the part where academic economists are raking in money while other disciplines are being cut out all together, and I felt better about it.)
posted by TedW at 6:39 AM on April 18, 2016 [2 favorites]

Has anybody else read the first two volumes of Deirdre McCloskey's political economy trilogy:
The Bourgeois Virtues: Ethics for an Age of Commerce
and Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World?
Is anybody else eager to read the concluding volume?
posted by bukvich at 6:46 AM on April 18, 2016

Models, theories, and even entire disciplines are pretty much lightposts.

I think that most economists know this. It's basically another way to say, "ALL models are wrong, some models are useful." The problem is that most of the people who talk and write about economics DON'T know that they're light posts.

In other words, the problem with science is when people who don't understand science try to talk about it like they do.

The economist Paul Romer at New York University has recently begun calling attention to an issue he dubs ‘mathiness’ – first in the paper ‘Mathiness in the Theory of Economic Growth’ (2015)...

I mean, here we have a paper published last year that is about exactly the same thing as the article and the paper was written economist.

I never see articles about any other discipline along these same lines of, "People sometimes do shitty science in their discipline, therefore that discipline is not science."
posted by VTX at 6:49 AM on April 18, 2016 [5 favorites]

KTM1's comment is a terrific one. If research affects your bread and butter, you're going to try to affect that research first. But I'd tend to say that economics is among the least captured of the social sciences. I'd far rather be an economist up for tenure review with service on Bernie Sanders' policy advisory team on my CV than an assistant professor of education up for tenure review with some op-eds in favor of school vouchers and test-selected GATE schools on my CV.
posted by MattD at 7:08 AM on April 18, 2016 [3 favorites]

It's the axioms of economics that can be problematic. It really is true that the discipline of economics began as a specialization of ethical philosophy, not the natural sciences. The valid point some critics of the field (as it's used to shape and sell public policy) have is that there are all kinds of unpacked moral judgments and cultural values based on assumptions of resource scarcity and desirable consumption patterns that don't necessarily align with reality. It is also true that many economists do understand that, and also understand that economics can provide useful models for achieving particular goals but the maps aren't the territory, etc. But people rightly object to characterizing economics as an objective science because, at bottom, it isn't. The study of natural systems teaches us, for example, that inefficiency in the form of redundancy can have major benefits in terms of promoting the resilience and long-term stability of natural systems. Our economics take as axiomatic that efficiency gains are always virtuous. It's little points of disconnect between the values implicit in the practice of economics and the observable scientific realities of the natural world that IMO justify the critics' skepticism.

The field is valuable and useful, absolutely. But more and more people understand it's not a hard science, despite policy makers' frequent attempts to close contrary discussion off with reference to the technical authority of economic models. It's not that the field is inherently a sham or fraud, but it's employed in service to shams and frauds by political interests hoping to exploit people's deference to scientific authority to advance their particular economic agendas. Those criticisms seem pretty valid coming out of the financial crisis and after so many years of disastrous policymaking driven and sold almost entirely on the basis of economic theory.
posted by saulgoodman at 7:13 AM on April 18, 2016 [16 favorites]

"Economics is false because it assumes people are rational actors" is a criticism about 50 years out of date. You'd need to go back a few academic generations (your advisor's advisor's advisor, if you will) before you'd find an economist not obsessed with irrationality and nuanced notions of rationality at both the individual (cognitive error) and communal (collective action) problems.
posted by MattD at 7:14 AM on April 18, 2016 [5 favorites]

Can those more in the know comment on the truth (or truthiness) to this comic?

(My exposure to economics comes from leaving snarky sticky notes all over my friend's intro textbook in college, except to know that people are not rational actors and there is a significant desire for revenge/equality in people even when it is not in their interest.)
posted by Hactar at 7:16 AM on April 18, 2016

It's a funny disparity, because economists' ideas are reified in society at large. It's like nobody else got that professor's message. His caveat left an impression, one that doesn't seem to be heeded much elsewhere.

My career has transitioned over the years from being in academia in a "hard" science to working alongside economists. When I was a chemist, I worked in an at-that-time fairly new field of research, and in general the literature surrounding the study of a particular physical property of molecules focused on a fairly high-order equation (fourth? fifth? it's been a while) that had been found to empirically describe various materials - but the variables in that equation were themselves at best approximations of other physical properties...and often assigned based on the best-fit equation to the data set in question, with no obvious way to independently approximate the value of that variable for a given substance. So you'd do that for one material, then someone else would come along and design a distinct yet similar material with different values, and hey presto! we must have changed a fundamental property! Or maybe we just have equations that are a pretty shitty approximation, but our variables are so fuzzy that we can ignore the equations' lack of predictive power.

So, coming from that, when I first started working with economists, I was pretty disenchanted to find many of their models looking like more of the same. But then I discovered a difference between economists and (some of, at least) my previous colleagues - they knew that's what they were doing! They completely understood that the assumptions needed to be heavily caveated, that the variables they were using may or may not match up to any real-world property of the system being described, and that the error bars would be huge.

Now what frustrates me is what seems to me to be the way they willfully ignore that no matter how much of that they put on paper, as long as they put it beside an equation and a point estimate, 90% of the non-economists reading will ignore the caveats and the error bars and the acknowledgement that the model being used might possibly be completely divorced from reality - and they will treat the number and the equation as the sole takeaways.
posted by solotoro at 7:36 AM on April 18, 2016 [9 favorites]

Guess How Many Pages Of Thomas Piketty's 700-Page Book On Inequality Most People Actually Read

I'm not surprised. About half the book is "but first I need to briefly explain..." It's like the Silmarillion of economics.

On the other hand, how seriously would people have taken it if he did 15 years of research to write something with the depth of a Buzzfeed article?
posted by Foosnark at 7:55 AM on April 18, 2016 [4 favorites]

I think people on the left can be too quick to dismiss the whole of economics as tarnished by over-reliance on simple models.

The actual discipline of economics does not bear out its use as right-wing propaganda.

Marxist economics exists. Keynesian economics exists. MMT and other heterodox economic theories exist . There is plenty of economic theory and evidence supporting the value of redistribution; analysing market failures; validating the importance of public spending; looking at the role of institutions in development; emphasizing the role of the state in fighing recessionary cycles.

Right wing economists mainly promote their ideology mostly by being carefully selective about the evidence they bother to present. Tyler Cowen on Marginal Revolution is a good example. Whenever there's a study or a book out that helps the rich, they promote it uncritically. Whenever there's something the other way (Piketty for instance) they try to ignore it, or nitpick tiny details. When there's a political suggestion that helps the rich, a tax-cutting budget deal for instance, they announce that it's not perfect but worth supporting. When there's a proposal that would help the poor, a minimum wage rise for instance, they announce that it's not perfect so they must oppose it. They happily switch between theory and empiricism depending on which helps their cause.

Suppose someone suggests increasing the minimum wage. The process goes like this.
1. They point out that according to the simplest Ec 101 models, that would reduce employment by an unspecified amount, so it must not be raised
2. Someone else points out that most empirical evidence shows little or no effect on employment when minimum wages are introduced
3. They say that the process of job losses *might* be so slow that it doesn't show up in the studies

Even with things they admit, right-wing economists shout all the time about the things that help the rich, and whisper occasionally about things that might help the poor. Most of them agree for instance that food stamps are a bad idea and it would be better to give the poor money directly. But they hardly ever bother to mention it, and certainly don't bother lobbying the Republican or Conservative party about it. Of course, they constantly scream about the theoretical problems of taxes and deficits.

I think the danger on the left is being too willing to take right-wing economists at their word and believe that the discipline of economics itself supports right-wing ideology. It doesn't. It's useful to learn enough economics to fight its use as propaganda.
posted by TheophileEscargot at 8:09 AM on April 18, 2016 [19 favorites]

Really enjoying this conversation. I'll add a few tidbits.

I agree wholeheartedly with saulgoodman's mention that economics grew out of moral philosophy. And I'm reminded that many 19th century economists made similar attempts to "scientificate" political economy by embracing some of the ideas of Auguste Comte and what became known as positivism. Similar unsettled questions, too, much like this modern rehashing of the "is it a science or not?" debate.

Seems like a appropriate place to dredge up an oft-quoted bit of Marx from the German Ideology:
“The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is at the same time its ruling intellectual force. The class which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of mental production are subject to it. The ruling ideas are nothing more than the ideal expression of the dominant material relationships, the dominant material relationships grasped as ideas.”
And while I don't agree completely with Marx here (mostly because of his quasi-Comte-ian reduction towards pure materialism), I think there is something to this notion--as other folks have suggested similar ideas above. The ruling class does determine the menu of options for the most part, but the power of good ideas is such that even contrary hypotheses are occasionally the exception which proves the rule. And then they become part of the menu, too.

To me, the fundamental question of political economy/economics is this: "How does a society reproduce itself?" One would hope that a question like this could be a foundation for some real science, but many of the not-wholly-scientific stabs in this direction are worthy of consideration and are of importance, too. Math is part of the discussion but not all of it.
posted by CincyBlues at 8:35 AM on April 18, 2016 [1 favorite]

Economics is great; perfectly precise and accurate in its description of the world of rational actors. The "problem" here is just that you people are all irrational. So really you just have yourselves to blame. That's why we billionaires don't want to trickle down on you, you're always squandering our precious trickle on irrational things like "love" and "human rights" and your "children", or some such nonsense. Still, you make good cannon fodder, and one's cannons aren't going to fod themselves. Believe me, I've tried fodding them with all sorts of things, but they only want fresh human blood for their fod, the greedy little beasts. Delicious human blood! Ah, good times.
posted by the quidnunc kid at 8:55 AM on April 18, 2016 [8 favorites]

Our economics take as axiomatic that efficiency gains are always virtuous.

I'm not sure what you mean by "our economics," but this isn't true for academic economics. Most obviously, the theory of the firm going back to Coase is directly about how and why actual firms exist when they "should" be outcompeted by more-efficient virtual firms. Williamson and North are similar, IIRC, but I haven't read those in a while and made my poor grad students read Coase this semester.
posted by ROU_Xenophobe at 9:17 AM on April 18, 2016 [4 favorites]

Marxist economics exists. Keynesian economics exists. MMT and other heterodox economic theories exist .

But come on, it's clear and obvious that this is not an article/discussion about heterodox economics. In this kind of discussion "economics" clearly means "mainstream economics of the kind disproportionately institutionally rewarded and backed by a revolving door between academia, government power, and money from the private sector," not "the work of every single economics professor in the US including the approx. half-dozen tenured Marxists."

But I'd tend to say that economics is among the least captured of the social sciences.

Actual LOL.
posted by RogerB at 11:12 AM on April 18, 2016 [6 favorites]

RogerB: the economics that you are thinking of is a fraction of actual academic economists. Econ Phd students aren't sitting around citing Glenn Hubbard, they're citing Acemoglu.
posted by MisantropicPainforest at 11:21 AM on April 18, 2016 [1 favorite]

the economics that you are thinking of is a fraction of actual academic economists

I imagine we likely disagree about how large a fraction, but yes: Not all economists.
posted by RogerB at 11:27 AM on April 18, 2016 [1 favorite]

Nice using a quote from Lord Kelvin, who used mathematics to prove the earth was 20-40 million years old.
posted by MtDewd at 1:05 PM on April 18, 2016 [1 favorite]

This post and the Taxation post right after it prove that Economics is a subject that MetaFilter does VERY well. I've learned from these threads, as has anybody who isn't fully brainwashed by voodoo Economists.
posted by oneswellfoop at 2:43 PM on April 18, 2016

Yes all academic economists are brainwashed. Or the vast majority are. Or maybe just their students. But maybe only the ones that have pie in the sky models. Definitely not the empiricists that document rising inequality or the salutary effects of a minimum wage. Either way, there's very little engagement with what actual economics in the US academy is like.

The ushering in of campaign attacks from 1980 ("voodoo economics") and the knee jerk critique of rational actors betrays an engagement with a caricature of actual economic scholarship. How that caricature came to be is an interesting question it itself, but the ones who believe it to be accurate only betray their unfamiliarity.
posted by MisantropicPainforest at 3:16 PM on April 18, 2016

‘If somebody came and said: “Look, I have this Earth-changing insight about economics, but the only way I can express it is by making use of the quirks of the Latin language”, we’d say go to hell, unless they could convince us it was really essential. The burden of proof is on them.’
I think it's interesting how this is basically the flip-side of the argument routinely used to dismiss theoretical work in the humanities as self-indulgent and over-complicated. Scholarship that impresses more than informs is one thing, and it's easy in some cases to get very far away from things that are actually concretely known -- but at the same time, from my experience working in a field where a large number of practitioners have a pretty strong anti-math, anti-modeling bias, I think using formulas (or lit-crit jargon words, for that matter) as red flags is pretty misguided.
posted by en forme de poire at 3:39 PM on April 18, 2016

i'm not sure i'll go quite that far, MisanthropicPainforest, and apologies if this is too meta, but: as someone who is in the process of being brainwashed but has not yet received a check from monied interests to influence my scholarship (which incidentally is about the failure of full-information rational expectations; my department is fully within the mainstream), it is somewhat frustrating that any discussion of economics as a discipline on metafilter is half about substantive issues and half pithy remarks about what people imagine economics research to be like.

there are good criticisms of economics in this article and in the ensuing comments, and real reasons to be concerned about the role of badly-represented economic theory in political discourse but man some of the stuff posters in this thread say about economists and what they think really, really does not resemble reality. Most economists are not macroeconomists, and I would say the vast majority are usually doing something quite narrow like "measuring the size of markups in the yogurt industry" or "what sorts of estimators should we use when we're dealing with household-level data with a bunch of 0s." even the vast majority of macroeconomists are not studying fiscal policy or financial regulation, which I think people tend to (unfortunately, sometimes correctly) perceive hackery in the service of making money or appearing on television.
posted by dismas at 3:46 PM on April 18, 2016 [3 favorites]

I had a macro subject as part of a wider Masters degree, and the lecturer early on decided to state that economics was a science. Now he may know a shitload more economics than me, but he doesn't know any history and philosophy of science, so I, taking umbrage at his statement, proceeded to win an argument with him on the subject. To get his revenge, he set that question in the exam - "is economics a science?", and there was clearly only one correct answer. I failed to give that answer and was accordingly marked down.

I could have protested all this, but it was the last subject of the degree, I got a credit, i didn't care any more.
posted by wilful at 4:35 PM on April 18, 2016 [3 favorites]

"Economics is false because it assumes people are rational actors" is a criticism about 50 years out of date. You'd need to go back a few academic generations (your advisor's advisor's advisor, if you will) before you'd find an economist not obsessed with irrationality and nuanced notions of rationality at both the individual (cognitive error) and communal (collective action) problems.

I took econ 101 a few years back from a guy who got his PhD from the University of Chicago. Judging by what we were all taught, I'm pretty sure the ideology of Homo economicus is still alive and kicking in some parts of the academy.
posted by Wemmick at 6:13 PM on April 18, 2016 [1 favorite]

Anyway, can we list economics as a thing mefi doesn't do well?

Well, I guess Metafilter has something in common with economists after all! Who knew?

(I kid...)
posted by klanawa at 7:07 PM on April 18, 2016 [1 favorite]

Wemmick: Yeah, I don't think that it's totally absent, but I think (and perhaps this is a triumphalist account) that there is an accumulating consensus that deviations from full-information rational expectations are pervasive and economically important. I mean, that stuff was always there but I think there's been developments in theory and computational power that have made it easier to convince even people who are very wedded to the baseline Rational Expectations paradigm that it's not the only one that we need to think about.

One thing that came up in the feminist economics thread, and I think is on display in this one, is that there is a real disconnect between economics research and how economics is taught at the introductory level. (I will say that some of these stories have a Marine Todd quality to them, but I also think that there are plenty of jerks out there so it's conceivable). For all the complaints about mathematical tools used in economics, there's really not much of that in introductory courses; instead, you get really, really simple models without any moving parts. Ideally, the point is to develop intuition and vocabulary; why prices and quantities might move in certain directions, ``all else equal'' type thinking, the notion of elasticities, that sort of thing. It's unfortunately not as informed by empirical research as it probably should be, but I think part of the reason for that is that a lot of empirical debates in economics take on a he said/she said quality because (1) they often revolve around technical issues that are beyond what even most undergraduate econometrics courses teach, and those course take place usually after a full introductory and even intermediate sequence in theory, and (2) for some pernicious policy questions, the consensus that was "settled" for a long time was challenged (see: Card and Krueger on the minimum wage, which is more than 20 years old at this point) and so there's no longer a straightforward consensus on what to present (I'm not a labor economist; I think Card and Krueger set of a lot of debate and I'm not sure if that debate was settled one way or another.) An additional issue is that you teach people the simple case first before you complicate it, but in my experience students have a tendency to remember only clean answers they can give for an exam, so even when I take the time to be like "oh here's this other stuff that is interesting if you care" they have tuned out. Noah Smith (whose blog I find pretty annoying, but I think he brings up some good points every now and again) had a discussion about this awhile back.

There's also this perverse thing which is that to introduce more interesting stuff into models (here I'm talking about macroeconomics and finance, which is what I know about), you need more math, not less, at least if you want to say anything specific. Like, just "oh I don't think people are rational" is not a particularly new insight (and I think 'rational' as an economist term of art is different from the usual usage); if you want to come up with a theory about why they act in an "irrational" way, how that changes your predictions for individual and aggregate behavior and outcomes, and most importantly testing those predictions with data in a rigorous way, it's not easy, and we're still working on it. It's not the kind of thing you can straightforwardly mention in a lecture and ask a test question about when students screw up calculating a percentage change or whether (in the simple model we teach them) supply curves tend to slope up or down.

My point is not that homo econonimus is not alive and well in the academy; we should do a better job teaching that economics is richer than the 101 model suggests. But we're not all shills for the Koch brothers.
posted by dismas at 6:54 AM on April 19, 2016 [2 favorites]

One thing that came up in the feminist economics thread, and I think is on display in this one, is that there is a real disconnect between economics research and how economics is taught at the introductory level.

Absolutely. I know there's much more nuance in the actual research, but I think one of the big problems is that public policy debates tend to occur at an econ 101 level. "Economics" is taken as a collection of definitive findings and normative prescriptions for society which can't be contested because "it's science". We have a public where many people who've taken introductory econ believe, for example, that science says markets are efficient, the minimum wage costs jobs (cuz microeconomics), free trade is unequivocally beneficial for all involved, that distribution effects are unimportant and GDP is a reasonable measure of a nation's well-being, contracts are complete and all parties have the same information, preferences are exogenous, and so on, despite the fact that one economist or another has questioned each. The econ 101 worldview conflates positive economics (what happens if we do this) with normative economics (e.g., a society ought to maximize economic output), which disguises a host of value-laden and simplified models as scientific truth. It's become a rhetoric for justifying and expanding the current wealth and influence of established power. If we had greater awareness that economics is a really, really messy discipline full of provisional findings closer in character to sociology and psychology than the clean world of math or physics, and that all kinds of political and ethical questions are independent of economic predictions, maybe articles like the one in the FPP wouldn't be written as often.
posted by Wemmick at 8:48 AM on April 19, 2016 [4 favorites]

> Again, not a lot of experience with actual economics research or knowledge of the discipline on display here.

Economists face a problem similar to linguists: everybody, absolutely everyone, has day-to-day experience with the subject they are studying, and often claim to know more about. And what is the subject of research to the economist is a matter of life-and-death to everyone else. Economists shouldn't be surprised they get so much push-back.
posted by benito.strauss at 9:05 AM on April 19, 2016 [2 favorites]

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