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The Problem with Economists

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As has bothered some of you, I think the field of Economics is largely intellectually bankrupt, a field specializing in mathematical formulas that tell us almost nothing about human behavior, a field serving as intellectual hacks for free-market global capitalism that provides justification for the exploitation of the world’s workers without actually caring about those workers, a field that intellectually uncurious and that is only comfortable with policymaking from 30,000 feet, yet a field that has an enormously inflated view of its own importance to the world, often looking down on other academic disciplines. This is not true of all economists of course, but it is true of far too many.

The historian Jefferson Cowie explores these these problems with economists in this Chronicle piece. A couple excerpts.

After reading through a policy speech prepared by John Kenneth Galbraith, President Lyndon Johnson addressed the economist. “You know, Ken,” he said, “the trouble with economics is it’s like peeing in your pants. It feels hot to you but leaves everyone else cold.” One only has to go to an economics seminar to know that Johnson was right.

Yet in an era in which markets have become the method of justifying and adjudicating all things, we cannot afford to have economics leaving us feeling cold and wet. Economics has become the benchmark for other intellectual endeavors; its practitioners rule policy debates; and, sadly, its mathematical modeling has become a closet form of anti-intellectualism — mathematically abstracted, as it tends to be, from real-world problems — that is creeping into other disciplines. While fewer people care that much of the lit-crit crowd stopped talking humanities to humans, economics is too central to political life for such shenanigans. It is time for the “queen of the social sciences” to get off her throne and start speaking to some of the lesser subjects in the kingdom of academe.

My “J’accuse” is this: The field of economics practices the very sin it preaches against ­— protectionism. That is to say, economists are protectionists of the intellectual sort at a time when the need for trade in the market of ideas has never been more pressing.

In a recent article, “The Superiority of Economists,” in the Journal of Economic Perspectives, we learn a number of things that are truly impressive about the field: Its graduates have higher standardized-test scores than political scientists and sociologists; they tend to find places higher up in policy and advisory circles; they are the best at math; and they earn more money and tend to have better career prospects than other graduates do. It’s no surprise that economists also seem to have more intellectual self-confidence than those in other fields. Economics, after all, is the only social science to have its own Nobel prize. Grounded in the present, they look toward the future and only rarely to the past.

On the other hand, smug in their security, economists are the least likely to cite other disciplines. Perhaps the most disturbing thing is the remarkable extent to which graduate training in the field is similar across institutions and departments — a stark contrast to other disciplines. And most of that graduate education is driven by textbooks and textbooks alone. To other social scientists and humanists, that is an astonishing proposition, and evidence of the field’s range of ideas.

As that survey of economic training shows, economics demonstrates more internal control over its own labor market, hiring only those who follow the prescribed formulas. The study of economics appears to be an exercise in the affirmation of orthodoxy.

First, that is classic LBJ. God bless him. Second, as Cowie points out, the Nobel in economics is a ridiculous joke that only exists because the Bank of Sweden wanted to promote itself.

The insularity of economics prompts an enormous irony: Rather than a market, economics borders on a command economy. From inside its fenced-in monocultural landscape, students are taught that they have arrived at the land of objectivity, that they have passed beyond the ideological and into the scientific. Not only is this protectionism, but it creates a rub with democratic theory and practice. It is, essentially, an invitation to opt out of the greater intellectual struggles in which the rest of us are engaged. By protecting itself from the contagion of outside ideas, economics offers up a more extreme version of the Balkanization and creeping anti-­intellectualism that are apparent elsewhere in the academy. Its hegemonic role, however, makes all the more important the need for the field to open up and transcend its preoccupation with the blackboard fictions of economic modeling.

As the Keynes scholar Robert Skidelsky has put it, the methodological presumption of economics is that “a good car [called economic modeling] has been built: Students must learn how to drive it.” But economics should not be a course in driver’s ed; it should empower students to think critically and creatively about the whole system of transportation. We should be inculcating curiosity, a sense of adventure, a greater range of ideas, not shutting them down. After all, it’s not as if economists are simply correct. When the queen asked the faculty members of the London School of Economics and Political Science why they did not foresee the 2008 financial crisis, they said they would get back to her. They later admitted in a letter that they had no answer and that their promise to provide one was an example of “wishful thinking combined with hubris.”

To put it bluntly, the discipline of economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of historical research and collaboration with the other social sciences. Economists are all too often preoccupied with petty mathematical problems of interest only to themselves. This obsession with mathematics is an easy way of acquiring the appearance of scientificity without having to answer the far more complex questions posed by the world we live in.

The book is more important, of course, for its argument about how the economy works. Piketty’s basic premise is as heroic as it is succinct: The rate of return on capital outstrips economic growth, making capitalism an engine for inequality unless there are countervailing forces.

As powerful and persuasive as Piketty’s work is, truth be told, he is not much of a historian. As much as I admire his data — and use it myself — the American history in his book, where it exists, is often just wrong in both fact and interpretation. He wields history like a chef with a heavy hand on the salt — it’s there every time you taste the dish but it doesn’t really help things. Balzac keeps popping up in Piketty’s book, but there are no unions, the New Deal is not especially significant, and there is not much labor-market policy at all. Taxation and war seem to be the only levers of change and, by association, the only solution to problems. Social history — the history from below — seems like an unknown land.

Neither Cowie nor myself think the field of Economics is irredeemable. Obviously we need people studying the economic system. But as currently constructed, the field causes more problems than it solves and in doing so, directly contributes to the inequality of the modern world. Economists need to do better. Stopping the fetishization of mathematics is a good place to start. Study real people doing real things. Read the work of people in other disciplines. Come off the mountaintop and understand the people you theorize about. Talk to them. Speak to their concerns.

Cowie by the way is one our leading historians. Capital Moves was foundational in the study of capital mobility as a historical phenomenon and was the book that inspired Out of Sight. Stayin’ Alive may be the most important book written on the decline of working-class America in the 1970s. And his new book on the New Deal anomaly promises to be transformational in how we think about social change and inequality in American history.

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