Ouch!

It isn’t often that economics makes the pages of Science, but I finally got around to taking a look at E. Roy Weintraub‘s review of Steve Marglin‘s The Dismal Science: How Thinking Like an Economist Undermines Community. (Gated copy here.)

The prophet Jeremiah is alive and well and teaching economics at Harvard. It is not often that a scholar with no particular historical or philosophical expertise trashes the Western Enlightenment in order to stomp on the discipline of economics as a manifestation of all that was lost in creating the modern world.

And one suspects, Weintraub doesn’t think that this is a particularly good idea. He provides some useful history of economic thought:

The professionalization of economics was a late 19th century phenomenon. Cambridge’s Alfred Marshall, in attempting to construct a scientific economics, was not able to establish economics as a separate discipline until the death of Henry Sidgwick, the university’s professor of moral philosophy, under whose direction lectures in political economy had been organized. In the United States at that time, economics was growing from different sources. One stream followed from individuals who had obtained Ph.D.’s in Germany, where social policy issues — labor unions, socialism, the nascent welfare state, etc. — were galvanizing the universities. But a second stream nurturing the American progressive economists grew from the social gospel movement, which sought to promote the kingdom of God on Earth through enlightened social policy and the kind of market interventions that Adam Smith in fact quite welcomed.

The kind of economics from which Marglin recoils is, however, not of the sort that was present in writings of individuals (e.g., Smith, Ricardo, John Stuart Mill, Marshall, and John Commons) who have been claimed as ancestors by modern economists. It is instead what developed in the post-World War II stabilization of economic discourse and the final professionalization of the discipline. It was during that postwar period, not in the Enlightenment, that economic science became normal in Thomas Kuhn‘s sense.

Marglin’s account appears confused by this history. Moreover, he appears to believe that the ideas he engages and then casts aside (ideas about the economic agent, preferences, equilibrium, models, and markets) all grew up not in the 20th century but hundreds of years earlier — and that those ideas have had stable meanings ever since: “For four hundred years, economists have been active in the enterprise of constructing the modern economy and society, both by legitimizing the market and by promoting the values, attitudes, and behaviors that make for economic success. No apology is due for this — except for the pretense of scientific detachment and neutrality and the unwillingness to confront the ideological beam in our collective eye.”

The ahistoricity of such a statement is startling; for instance, it assumes wrongly that there were individuals called economists 400 years ago and that science in 1600 meant the same thing as it does in 2008.

But do you really want to know what Weintraub thinks about the book?

I note in closing that the lead dust-jacket blurb for this volume was provided by the noted economist and social theorist Bianca Jagger (sic).

To be fair, her ex-husband, Mick Jagger did (briefly) attend the London School of Economics.


Ms. Misunderstood Scientist at- large

Dear DJ;

Am haVing a bit of difficulty with your assumption of "plunder". Prefer to call it a case of helping people to help themselves- the only way we humans seem to learn. Countless times, I offer free advice to my daughter- she never takes it- needs to learn for herself and by her own mistakes. I make mistakes all the time in my work and then learn from them. I try my best to keep an open mind and don't always succeed (especially when my emotions are in the way of my separating fact from fiction). That's when I make a mistake- so lately I have been practicing keeping "calm." I recommend this technique. And admit- sometimes it takes me a while to come around to seeing things for what they are.

Thomas Duggan

Perhaps Bianca Jagger could have helped Weintraub write his review as well. As a student of politics and philosophy she would likely at least have had the sense to correct his misuse of Thomas Kuhn and explain the critique of economics as a stable, value neutral discipline.

Y'all Missed the Boat

sorry to have to say this- but reading is an important aspect of learning- I won't tell you how many times I have read a number of classics again and again and again before coming to terms with the author's message i.e., practiced not relying upon secondary sources for my material.

I understand that this takes time which you full timer academics don't have-

PS- the surprising discoverer of the science of economics "was" an economist by training....hint, hint... And the winner is....stay tuned........to where it was found........
2008, all rights reserved.......

Admiral

If I had a dollar for every time a member of the Economics faculty at Harvard deigned society worthy of hearing either endless self-promotion or worthless tripe -- I'd have enough money to publish my own. That would make me rich indeed.

Michael F. Martin

Jay Levitt wins this thread.

PaulK

I think it is perhaps a mistake to suggest that Economists directly shape social systems (including markets), but it is true that some of their theories and conclusions are used by by both governments and capitalists (for lack of a better word) to affect behavior. So, we see regulations shaped by economic theory (rightly or wrongly), we see marketeers adjusting their approaches to match what they are told fits how people behave/react, and we see more subtle uses of such information. In many cases, governments take only bits and pieces, so it the effect is probably even more indirect (and often counter to the theory).
Of course, it is also hard to separate out policies that simply hide under the guise of some economic theory. How much of Reagan's policies had anything to do with Laffer and Supply-side theories per se, vs. just being terms used to sell the concept already planned?

Paul

That's not a very good review. First an "ad hominem" attack, then a "straw man"; the author may have made a few mistakes, but it doesn't mean that his basic thesis isn't sound, or relevant. Surely it is true that economics as a discipline is losing its authority, as more and more gaps are appearing in the way it explains the world. Here is a counter-review (although it's not that great, either): http://www.timeshighereducation.co.uk/story.asp?storyCode=401252&sectioncode=26

Ray Gardner

Yes, he means that thinking like an economist undermines - perhaps not Communism in its proper form - but definitely it undermines the collective mindset.

EconTalk or Cafe Hayek are the places you can find his podcast interview with Professor Roberts from GMU.

Jay Levitt

I think you're intentionally neglecting to mention Jagger's well-known hierarchy of wants and needs - which at the time was considered a bold counter to Maslow.

Chesapean

Not sure how Mr. Wolfers connects Mr. Weintraub to the review of Mr. Marglin's book, since there's no attribution in the ungated link...

Still, it seems Mssrs. Wolfers, Weintraub and Marglin are all of a piece in assuming the "dismal science" is, well, science. They just differ on the details to justify it.

Fill in the blank: The law of gravity is to physics as BLANK is to economics.

If economics had a "law of gravity," the Wolfers/Weintraub/Marglin kerfuffle would be empty.

(My answer? The law of gravity is to physics as the law of money is to economics. Only problem is, economists have yet to define the law of money. As a result, Marglin can sell a book claiming economics is social policy-making by another name, Weintraub can sell a review saying Marglin is a Jeremiah, and Wolfers can sell the word 'Ouch!' Everyone makes money, but there's not one bit of food, clothing and shelter in any of it; no gravity.)

Read more...

Jim McQ

"For four hundred years, economists have been active in the enterprise of constructing the modern economy and society, both by legitimizing the market and by promoting the values, attitudes, and behaviors that make for economic success. No apology is due for this - except for the pretense of scientific detachment and neutrality and the unwillingness to confront the ideological beam in our collective eye."

I can't vouch for the 'four hundred years' piece of this statement, but there is a body of work that argues that economics reshapes the market as it generates research. In that sense, economics doesn't study what 'is,' but actively creates the market, as well as attitudes towards the market, as economists work. Search for the 'performativity of economics' if you're interested.

hanmeng

I'll wager Marglin means thinking like an economist undermines Communism.

re y'all

Heh Dave-

gettin close. good work-

now the proof of the pudding is in the eating

roger

Actually, Say's law, and the notion of equilibrium, is far from a twentieth century invention. Try early 19th century. Too bad Weintraub is so historically ignorant he doesn't know that. Maybe he should read Philip Mirowski's More Heat than Light and educate himself about the history of economic models. As for thinking John Commons was more influential than, say, Fisher or Knight in American economics - maybe Weintraub inhabits an alternate America. He certainly seems too radically uninformed about economic history to cast too many stones.

William

The law of gravity is to physics as the law of demand is to economics-not too hard really, Chesapean.

Dave

Per Jim McQ's comment:

If the study and understanding of economics itself effects the market, is there a sort of economic Heisenberg (sorry for the spelling) Uncertainty principal? I.e. the very act of observing changes that which we are trying to passively observe?

DJH

Being cognizant of how the economy works, affects how the economy works. For instance, it's now possible to create and exploit bubbles in commodity markets. The effects of the ongoing crude-oil bubble are devastating, but at the same time, it shows no sign of collapse any time soon. It can be sustained indefinitely.

So the science of economics does allow the few to exploit the many, to the detriment of all, and thus undermine "community."

I can't help but find a similarity to the fictional science of psychohistory in Isaac Asimov's "Foundation" series. It worked only so long as the population being evaluated was ignorant of its workings (they could know it existed, but not much more). The "Seldon Plan" to limit the post-Imperial interregnum could be manipulated by those who knew the psychohistory upon which it was based.

Something similar is happening now. Those who are well-connected and "in the know" are using their connections and knowledge to plunder the world. Economics has helped them do that.

Read more...

echoclerk

"I think it is perhaps a mistake to suggest that Economists directly shape social systems (including markets), but it is true that some of their theories and conclusions are used by by both governments and capitalists (for lack of a better word) to affect behavior."

hmm, well I can think of a number of emerging markets that a particular bunch of Chicagoan Economist played a VERY large part in manipultaing.... Chile, Indonesia, Brazil, Poland, etc....