“It’s a total surprise”

by Daniel on October 13, 2008

And indeed it was – Paul Krugman has won the Nobel Prize for Economics[1].

The citation says he got it “for his analysis of trade patterns and location of economic activity” – ie for new trade theory. Which certainly did pretty much light a bomb under the subject when he published it in the 1980s, but if this is all it’s for, it’s frankly surprising that Krugman got it all to himself; there were plenty of other people who might have felt they deserved a share.

I can’t help thinking that this is actually Krugman’s reward for being the public voice of mainstream sensible Keynesianism for the last fifteen years, starting with the use of the liquidity trap to explain the Japanese slump, going through his prediction of the Asian crises and onward to today. In which case, well done the Nobel[see note 1 again] committee – Krugman’s NYT column has been more use to the public standing of economists than more or less anything published in the journals.

And, of course, congratulations to Prof. Krugman himself, who might very well have believed that he’d done his professional status irreparable harm by taking such an aggressive line against the government of the day; he now gets the double pleasure of receiving the highest reward in economics, just as all of his detractors see their repuations ruined. There is probably some pithy epithet from Keynes or JK Galbraith to be inserted here on the general subject of honesty being the best politics, but I can’t think of it just at this instant.

Update: Hey, have you seen the new Guinness advert?

[1] blah blah blah Sveriges Riksbank. Nobody cares, you know.

{ 250 comments }

1

John Quiggin 10.13.08 at 12:56 pm

Snap!

2

Oryx 10.13.08 at 1:00 pm

Well done Paul!

But — Daniel, *what* Guiness ad???? Or am I missing something here?

3

Bloix 10.13.08 at 1:07 pm

“Nobody cares, you know.”

Repeat a lie often enough and it becomes the truth, is that the idea? It seems to work pretty well as long as you have money and power on your side. But many people actually do care that a political ideology masquerading as a science has hijacked the prestige of genuine sciences.

Krugman didn’t win a Nobel Prize. If you want to call a four-legged animal with a trunk a “cow,” go right ahead. That doesn’t mean it’s not an elephant.

4

Kieran 10.13.08 at 1:11 pm

The comment thread over at Marginal Revolution is fucking hilarious.

5

DRDR 10.13.08 at 1:13 pm

I honestly believe the reason why Krugman is getting the prize to himself is because he contributed to economic geography in addition to trade. Economic geography is more popular in Europe than it is in America from what I’ve seen. That to me is a more plausible explanation for the solo award than his role as a public intellectual.

6

Lex 10.13.08 at 1:15 pm

@2: Name 10 of those ‘many people’, right now – go on.

It’s just a prize. It’s not canonisation. Like you can win the Peace Prize and still be Henry Kissinger.

7

engels 10.13.08 at 1:18 pm

Reading the MR comments is the most fun I have had since… well, reading the NRO’s analyis of the presidential race five minutes ago.

8

Daniel 10.13.08 at 1:39 pm

But many people actually do care that a political ideology masquerading as a science has hijacked the prestige of genuine sciences. [sic - and genuine literature and genuine peace, presumably - dd]

I’m sure you’re right, but among the ones who don’t care are the Nobel Foundation and HM Carl XVI Gustav of Sweden, and this is why they list Economics winners on the Nobel website, the winners call themselves Nobel Laureates, they go to Nobel Awards ceremonies and so forth and so on.

9

Eszter Hargittai 10.13.08 at 1:42 pm

Also, the press and the public don’t seem to care, which is most important in how the word spreads. So while I personally think it’s worth remembering this distinction, given that all of these important players (including the ones Daniel mentioned) don’t seem to draw much of a boundary, the distinction loses its significance.

10

lb 10.13.08 at 1:43 pm

the truth is, I am glad Krugman won, since I enjoyed learning from his articles in my trade lectures.

the thread at marginal revolution is funny- never thought so many people can be so angry and so vocal over this prize (on the other hand, the 50o congratulations on PK’s blog are also impressive).

11

Scott Martens 10.13.08 at 1:57 pm

You’re right Kieran, I’m still laughing. Thank you, it’s like watching the Colbert Report without having to remember that it’s a parody.

12

Eszter Hargittai 10.13.08 at 2:04 pm

never thought so many people can be so angry and so vocal over this prize

You should’ve seen the outrage from some Hungarians when in 2002, Imre Kertész won the Nobel Prize in Literature. Instead of being happy that for once a Hungarian won this award, they were furious that it was this Hungarian and not X Y or Z.

13

tom s. 10.13.08 at 2:10 pm

I can’t help thinking that this is actually Krugman’s reward for being the public voice of mainstream sensible Keynesianism for the last fifteen

What is this with second guessing the motives of the committee? First Yoichiro Nambu gets given a Nobel for symmetry breaking and some people say it’s “really” about string theory. Now Krugman gets it for trade and you think it’s “actually” about his public writings.

Seems like a slippery slope to me. Why not just say they got it for what the committee said? Next thing, we’ll hear that Roald Hoffmann “really” won a chemistry Nobel for his unimpressive poetry.

14

Bob B 10.13.08 at 2:31 pm

“It’s just a prize. It’s not canonisation. Like you can win the Peace Prize and still be Henry Kissinger.”

Even so, congratulations, Paul Krugman. Like most other economists hereabouts, I also believe that his prize is well-deserved.

Expanding on the amazing fact that Henry Kissinger was awarded the Peace Prize – as Tom Lehrer remarked at the time, satire came to an end then – I think the banks in Sweden would provide a universal service if they endowed an Ignobel award for outstandingly incompetent political leaders. There are some worthy candidates lining up.

15

arthur 10.13.08 at 2:45 pm

The comment thread over at Marginal Revolution is fucking hilarious.

Is it just me or does comment quality vary across disciplines? My impression is that economics blogs (regardless of their political orientation) tend to have angrier and more incoherent comments than, say, the philosophy/poli sci blogs. Is there anything in economics which attract people who overestimate the extent of their knowledge?

You should’ve seen the outrage from some Hungarians when in 2002, Imre Kertész won the Nobel Prize in Literature.

I was quite surprised to see him win too. His body of literary work is really quite small, and although Fatelessness is brilliant, quite a number of people would find the themes better developed in (for instance) Primo Levi’s account.

16

Eszter Hargittai 10.13.08 at 2:50 pm

I was quite surprised to see him win too. His body of literary work is really quite small, and although Fatelessness is brilliant, quite a number of people would find the themes better developed in (for instance) Primo Levi’s account.

It’s fine to be surprised or to disagree. But like you just did, it’s possible to express those opinions without getting into a yelling match.

17

Lex 10.13.08 at 2:54 pm

No it’s NOT!!

18

Daniel 10.13.08 at 3:09 pm

Is there anything in economics which attract people who overestimate the extent of their knowledge?

short answer – yes. It’s a field which (a characteristic it shares with, for example, evolutionary biology) has a few simple propositions which can be used to derive a politically palatable view about nearly anything, as long as you’re prepared to only explain a very superficial version of the stylised facts (which in turn are constructed in order to fit in with a politically convenient explanation). For this reason, it’s like a magnet for the intellectually insecure.

Evolutionary biology also works this way, but in economics it’s basically the purpose of the subject (I mean, of course, the subject as it exists as a social entity).

19

Giles 10.13.08 at 3:20 pm

About Henry and the Prize: Many people refuse to grok that the Nobel Peace Prize isn’t a lifetime achievement award for being a nice guy. It’s given out for a specific contribution to peace. In other words, someone could well deserve it for some specific effort, whilst also deserving to hanged, drawn, and quartered for every other thing he did after the age of 15. If the respective heads of state of the U.S.S.R. and Germany had agreed on a lasting negotiated truce in, say, early 1942, this might well have merited a trip to Oslo (which one of them were occupying at the time).

The 1973 prize wasn’t misguided because Henry Kissinger happened to be a more bloodthirsty successor to Metternich — although he was that — but because the Paris Agreement turned out to not really end the Vietnam war, as Tho acknowledged in declining his share. By the same logic, M. Begin deserved his Nobel despite being a former terrorist, a warmonger, and a lifelong general scumbag. Arafat? Probably not. But if you’re going to award an annual prize for over a century, there will be a few dubious calls. So it goes.

20

PHB 10.13.08 at 3:22 pm

Complaining that the Nobel Prize in Economics is bogus and thus Krugman’s is illegitimate is to miss the point.

The original reason that the prize was created in the first place was wingnut welfare, in praticular to award it to Hayek and Friedman. Friedman’s prize particularly annoyed the Nobel family because he was a supporter of dictators and built his career giving them advice.

However these days the prize is awarded in the same way as the other prizes and for the same purpose – promotion of peace. It is no longer wingnut welfare, if you discount the pre-1980 recipients it is as representative of the top of the economics world as the science prizes are.

From a practical point of view though the prize does not lend any more credibility to Krugman’s arguments against Bush. His criticisms have all been proven by events. Krugman was right that Bush would create an enormous deficit, he was right that the privatization of Social Securty would have been a disaster, he was right that the tax cuts were sold on lies, he was right on the Iraq war, he was even one of the people who predicted both the housing price bubble and the consequences of the bust.

Krugman was not the only person who made the same predictions, but he made the predictions prominently and in a form most people (who wanted to) could understand. And he gave the rest of us cover.

21

JRoth 10.13.08 at 3:33 pm

We all know that Kissinger’s “Peace” prize was really for unprecedented achievement in dating out of his league.

22

Anon 10.13.08 at 3:46 pm

Kiernan,

Thanks for reminded me to look at Marginal Revolution. Steve Sailer, Barkley Rosser, and head-asploding all in one convenient place.

Anon

23

Bloix 10.13.08 at 3:52 pm

#6 – Brad Delong cares. See http://www.j-bradford-delong.net/movable_type/
Also Gunnar Myrdahl cared. And the Nobel Foundation is very careful not to call the Econ Prize the Nobel Prize in Economics. http://www.nobelprize.org.

24

PHB 10.13.08 at 3:56 pm

Daniel,

I think that the problem is that there are a lot of people who want to think that they have an absolute understanding of the world. And they get mighty angry when anyone suggests that the simplistic theories they have attached themselves to might not be entirely true.

There are plenty of economists who have conflated Pareto’s simplification assumption with the categorical definition of ‘optimal’. And suggest to the average rational choicer that rat-choice is a justifiable simplification assumption to make a model tractable and they will denounce you as an imbecile – in their view everyone always acts exclusively in terms of their own best interests. Lets ignore the fact that most people would have severe difficulty defining their best interests let alone forming a coherent strategy to maximize them.

The cardinal sin that rather too many economists commit is the conceit that their subject is so complex that only they can possibly understand it. That they have no responsibility to explain their theories in terms the rest of us can understand. I think that what is most appealing about Krugman, and indeed the thing that most angers the wingnuts is his insistence that it is possible for economists to explain themselves.

25

Bloix 10.13.08 at 4:04 pm

PS- Daniel himself doesn’t fully believe that Krugman got the award on the merits of his scientific work, and thinks that it is fact due his role as a popularizer: “I can’t help thinking that this is actually Krugman’s reward for being the public voice of mainstream sensible Keynesianism for the last fifteen years…”

That is, he suspects that the Royal Swedish Academy is being disingenuous in explaining the reasons for the award, and is actually making a political gesture in favor of a specific economic ideology – “mainstream sensible Keynesianism.” Which is my point exactly.

26

Slocum 10.13.08 at 4:20 pm

And, of course, congratulations to Prof. Krugman himself, who might very well have believed that he’d done his professional status irreparable harm by taking such an aggressive line against the government of the day.

Well, now that is kind of funny — academics imagining they’re being courageous for ‘taking an aggressive line’ against a Republican administration. Now taking an aggressive line against an Obama administration — yes, that might be a professional risk for an American academic (unless, of course, it’s an attack from the left — which would be professionally safe and which I’m certain we’ll be seeing often enough once the ‘honeymoon’ is over).

27

Steve 10.13.08 at 4:20 pm

> for his analysis of trade patterns and location of economic activity” – ie for
> new trade theory. Which certainly did pretty much light a bomb under the
> subject when he published it in the 1980s,

Unfortunately I have not read Krugman’s work in this area, which I must now do. Could anyone explain how Krugman’s analysis of the economic effects of location compares to Jane Jacobs’ work on that topic in the 1970s/80s?

sPh

28

roger 10.13.08 at 4:34 pm

Bloix is, I think, right about the politics. When the bogus economics Nobel prize was established, it was used as a hammer to hit the socialist government of Sweden – thus, the award to Hayek, who, though a philosopher of a sort, is no economist, and the awards to a stream of University of Chicago dittoheads. When Friedman won the prize in 1975, Gunnar Myrdal, who had shared the prize with Hayek, wrote an open letter calling for the dissolving the prize. As Myrdal pointed out, there is no reason to privilege economics among the social sciences. Far better to have a general social science prize, one that could go to linguists, anthropologists, sociologists or economists. The period from 1945 until the present is a sort of golden age of economics, like the 1550s were a golden age of alchemy and astrology – which is what economics becomes when it purports to be anything more than a social science. Alas, economists are secretly convinced they are physicists or something.

Just as the nobel prizes in the seventies presaged the deluge of Reaganism, the prizes now – to Stiglitz a few years ago, and now to Krugman – might well presage the end of the neo-classical era. Good riddance!

29

nick s 10.13.08 at 4:37 pm

blah blah blah Sveriges Riksbank.

Are their deposits guaranteed? That’s the only thing people care about right now when they hear the word ‘bank’.

30

engels 10.13.08 at 4:38 pm

One of the commenters on Krugman’s post suggested iirc that the prize was to be awarded as stock options in Lehman Brothers.

31

Jim Harrison 10.13.08 at 4:40 pm

Back in 2002 and 2003, I’m sure lots of economics professors made snarky comments about Bush over lunch. Making a case against the administration on the op/ed page of the New York Times was an entirely different enterprise. Krugman was subjected a tremendous amount of abuse during those years, some of which amounted to swift boating. That’s when he acquired the nickname, the Shrill One, which is pretty remarkable considering his rather diffident personality. “Just another beardy professor” is his own self evaluation.

32

MarkUp 10.13.08 at 4:45 pm

”risk for an American academic (unless, of course, it’s an attack from the left”

Is there another, perhaps more Patriotic side to academics shielded from our eyes by some elitist group like the liberal media, or shutter, a full on Democrat conspiratorial cover-up?

33

Walt 10.13.08 at 4:52 pm

Slocum’s comment is as high quality as always. God forbid we have a whole thread without his trolling.

Steve: Now that I think about it, on the subject of location Krugman and Jacobs are not really all that far apart, though their respective works have much different flavors. Krugman works in the tradition of economic theory — he writes down a mathematical model and shows that it explains certain facts about the world (though he is a clear expositor in words, as well). But the idea that cities arise from economies of scale in production is a conclusion that I’m sure Jacobs would agree with.

34

Clay Shirky 10.13.08 at 4:52 pm

Daniel,

I think its not a question about economics per se, but rather about economics _now_.

From time to time, practitioners in some field of inquiry make a bid to push it well beyond its historic borders, in an attempt to Explain Everything. There was a time, in the middle of last century, when psychology Explained Everything, which led to the same histrionic denunciation of challengers.

For example, rather than regarding behaviorism as a loopy set of counter-factuals that would not hold up under the weight of empirical examination, the defenders of psychology as a way to E.E. suffered a collective head asplosion, largely because behaviorism challenged not just psychological observations but background assumptions as well, and subjecting those cherished assumptions to empirical study was _more_ threatening to psychology than Skinner et al were.

Instead, it was all “La la la I can’t HEAR you”, because when someone attacks one of your prior beliefs that you can’t defend in any reasonable way, doubling down on faith is the next best thing.

So with economics now — for economics to Explain Everything, certain assumptions about both human nature and the logic of collective action have to hold true. Now, there has always been good evidence that they don’t hold true (Mancur Olson FTW), but that evidence wasn’t within the mainstream of economics, at least not in its “DJ Hayek Extended Dance Re-mix” form.

Events, though, are different from theories, because they have the enormous inconvenience of actually having happened. Because the driving engine of attempts to E.E. is faith in the assumptions by a certain body of practitioners and a certain point in time, the only strategy when events overtake you is either to deny that the events are landscape-altering (“Nothign we haven’t seen before. Buy on the dips!”), or to note that they take place in such a compromised environment that they “don’t count” somehow, as is now the argument in its “Well, we never really had a free market, so we can’t regard this as a test of one” form.

35

Slocum 10.13.08 at 4:54 pm

Krugman was subjected a tremendous amount of abuse during those years

Oh, indeed he was — but not from people who had any influence over his professional success. And years of bashing the Bush administration certainly can’t have hurt him with the prize committee.

But I like Byran Caplan’s take on Krugman. Krugman’s Bush-bashing may have been shrill partisan hackery, but his clear defenses of free trade is very useful right about now. And if the former makes the latter palatable to lefties, that’s OK with me.

Perhaps in the current climate Krugman now regrets some of his clear defenses of global trade, but the award makes it rather awkward to try to disown his older work, “You know that stuff I was given the Nobel for? Never mind…”.

36

John Emerson 10.13.08 at 4:57 pm

I hope I don’t need to tell anyone here about the problems with HM Carl XVI Gustav, I hope.

Barkley Rosser verges on the grumbly, but pulls out at the last moment.

If enough economists have their reputations ruined and are stuck up in the attic where Galbraith is now, and if Galbraith and a few others are freed from the attic and returned to places of honor, I will quit trolling the CT econ threads and you people can go about your lives untroubled.

O, and also, Econ 101 has to be blown into tiny pieces. No more lifelong freemarket ideologues forever recapitulating their one term of freshman year neoclassical orthodoxy.

Otherwise, the Dude abides.

37

Righteous Bubba 10.13.08 at 5:06 pm

Krugman’s Bush-bashing may have been shrill partisan hackery

Who agrees with this but shrill partisan hacks?

38

Walt 10.13.08 at 5:16 pm

Krugman’s selection is the result of a committee, so I’m sure the secret meaning of his selection is that of committee dynamics. Krugman was obviously deserving. I suspect that his political activities prevented him from winning, but that now that the Bush administration is almost out the door the pressure to keep him out of the winner’s circle started to fade. It’s surprising that it’s a solo award, since there are other plausible candidates in the same area, but it’s a pretty long list so maybe they couldn’t agree on anyone additional.

39

John Emerson 10.13.08 at 5:21 pm

A lot of non-partisan people over at Marginal Revolution say that krugman is too partisan and also very stupid. Certainly this is something we’re going to have to think about.

Unfortunately, no one knows who George Chuvalo was any more. He was a pretty good fighter who couldn’t beat anyone, but who no one could knock down, much less knock out. He just kept taking punch after punch. The Slocum of boxing, in short.

Sarah Palin is the new Slocum of politics. She claims to have been vindicated by a bipartisan report accusing her of ethics violations, but she also claims that the report is partisan and biased against her.

We wil never understand the conservative mind.

40

dsquared 10.13.08 at 5:41 pm

#34: yes, I’ve often commented that somewhere inside economics is a nice, sensible branch of control engineering struggling to get out from the thicket of strange and woolly political, philosophical and psychological beliefs that somehow became attached to it between 1875 and 1975. Krugman has actually done more than most to begin to unpick the knot and deserves a prize for that.

Slocum: If Bush-bashing was so easy, then why didn’t more people do it, since it was so obviously the correct thing to do? I mean, the main premis of your argument here appears to depend on reminding us of a whole raft of issues on which Prof. Krugman was undeniably right, and on which you and your political compatriots were equally undeniably wrong. Just out of interest, how does this argument (to recap: Krugman right, Slocum wrong) get twisted round into your mind as something that would argue against giving a prize to Krugman?

41

john b 10.13.08 at 5:43 pm

“Perhaps in the current climate Krugman now regrets some of his clear defenses of global trade”

…OK, so I’m puzzled as to why the fall-out from poor regulation of financial services institutions’ liquidity risk should be seen as saying anything at all about the desirability of free trade…

42

Uncle Kvetch 10.13.08 at 5:59 pm

I mean, the main premis of your argument here appears to depend on reminding us of a whole raft of issues on which Prof. Krugman was undeniably right, and on which you and your political compatriots were equally undeniably wrong.

Now comes the part where Slocum reminds us that he’s no fan of George Bush. It’s just that, in contrast to shrill partisan hacks like Paul Krugman, he’s never allowed his dislike of Bush to blind him to more fundamental truths, like the stupidity of liberals, the smelliness of hippies, and the fatness of Michael Moore.

43

John Emerson 10.13.08 at 6:08 pm

DeLong and Krugman both seem to now be a bit more aware of the down side of free trade, which they supported viciously while the ball was still in play.

They also both now say that maybe high productivity without wage increases may be the result of something called “power”. I don’t know what “power” is in economics; it doesn’t even seem like an economists’ term. Having actively anti-labor leadership in control at the federal level for 20 or 28 years might have something to do with it, especially given that Clinton wasn’t very friendly to labor either.

44

john b 10.13.08 at 6:26 pm

You mean, downside in the sense of it being bad form to raise overall incomes and significantly raise the incomes of the poorest globally by (effectively) taxing the poorest in rich countries?

45

Slocum 10.13.08 at 6:30 pm

“We will never understand the conservative mind.”

A good start would be to understand minds that are neither conventionally left nor right. I’m not sure why this seems so to be hard — it’s a pretty straightforward position, after all. I mean what’s so hard to grasp about ‘Free Minds and Free Markets’, for example (Reason Magazine’s tagline)?

46

John Emerson 10.13.08 at 6:32 pm

S/B “We will never understand the glibertarian mind”.

We regret the error.

47

Krugman's Nobel: A Bad Joke 10.13.08 at 6:33 pm

I’ve often thought that, in the interest or promoting his ideas as superior, pointing out the fact that Hayek got a Nobel prize in economics was treading on shaky ground, because of the unabashed statism of several of the other economists who were also Nobel prize recipients.

But this clinches it: Paul Krugman has been awarded a Nobel prize in economics. And what perfect timing! Interventionist policies have brought the U.S., and the world, to their knees financially. Who better to be lauded than a champion of leftism! Oh, the sweet irony.

I know the Swedes have had their challenges with socialism, but how far left can they go before they’ve completely stripped a Nobel prize award of all its legitimacy? What’s next, a posthumous Nobel for Marx? Playing “a big role in shaping the discourse in economics” is the central criterion for the Prize, after all.

How much would you bet that Hayek would list his Nobel on eBay now if were alive? The Nobel in economics is now, officially, a bad joke.

48

notsneaky 10.13.08 at 6:38 pm

“Bloix is, I think, right about the politics. When the bogus economics Nobel prize was established, it was used as a hammer to hit the socialist government of Sweden – thus, the award to Hayek”

Oh please, the first seven prizes awarded all went to essentially left wing and even somewhat socialist economists, from Tinbergen, to Leontief, to Samuelson and Arrow. Even the Hayek one was split with Myrdal to be followed by one to Kantorovicz and Koopmans, hardly icons of the free market crowd.
How anyone can see any kind of bias in the list of laureates is beyond me, aside from some deep ideological biases.
Almost all of them (can’t think of an exception off the top of my head but there may be one. Myrdal, in fact, may be one) were well deserved, as is this particular one. Very much.

Daniel’s statement that there’s a “sensible branch of control engineering struggling to get out from the thicket of strange and woolly political, philosophical and psychological beliefs that somehow became attached to it between 1875 and 1975. Krugman has actually done more than most to begin to unpick the knot and deserves a prize for that.” is a bit strange. In what way has Krugman moved economics more towards control engineering? His methodology, approach and style is mainstream through and through. Utility functions, optimizing agents, etc. etc. It’s great work but let’s not kid ourselves that it’s “heterodox” in any way.

49

Slocum 10.13.08 at 6:40 pm

DeLong and Krugman both seem to now be a bit more aware of the down side of free trade, which they supported viciously while the ball was still in play.

I would say that DeLong seems to have made the calculation that he can stave off a wave of protectionism with a combination of incessant shrill thrashing of Republicans (to establish his ‘street cred’) combined with gentle persuasion aimed at those on the other side, for example:

http://delong.typepad.com/sdj/2008/07/china-and-walma.html

I hope he’s right — but, we’ll see.

50

nick s 10.13.08 at 6:42 pm

The Graun writeup suggests that Eugene Fama was a pre-race favourite, but that rewarding the efficient markets hypothesis might not be ideal right now.

And the side-discussion with Clay reminds me of Newton’s response to the 1720 crash. In some regards, that behaviourist strain in economics is a reprise of the half-century of British moral/political philosophy which served as the fertiliser for Adam Smith.

51

Walt 10.13.08 at 6:49 pm

Now I’m sad. It would be hard to top the comic value of Fama winning this year.

52

dsquared 10.13.08 at 6:50 pm

In what way has Krugman moved economics more towards control engineering?

In the sense that he’s always stuck to simple, comprehensible models, visibly in the Keynesian tradition, rather than sticking bits and pieces of mathematics together to backward-justify a conclusion already reached. I don’t actually agree with a lot of Krugman’s work or methodology (and a lot of the policing-the-boundaries stuff he did in the 1990s was quite destructive), but it’s obvious that he’s an honest person attempting to do science, in a way in which an awful lot of macroeconomists really quite visibly aren’t.

53

notsneaky 10.13.08 at 8:09 pm

And it’s actually kind of funny how much Bloix sounds like some of the nuttier commentators of on MR, except of course that they’re raving that it’s a left wing conspiracy, while he’s convinced that it’s a right wing one.

54

notsneaky 10.13.08 at 8:20 pm

“The comment thread over at Marginal Revolution is fucking hilarious.”

Actually, I managed to get to about half of it. Sure, there’s some nutzoid peoples, but hey, there’s some here too. I don’t see where the ‘hillarious’ part starts. Is it towards the end? Or is it the other Krugman thread?

There is however, a very excellent comment by Barkley Rosser on that thread that’s worth reading.

55

John Emerson 10.13.08 at 8:30 pm

I thought that the comments explaining that Krugman is stupid, wrong, and not an economist of any importance at all were hilarious. I didn’t see anyone saying “I’d flunk an Econ 101 student who wrote what Krugman did on this topic”, but it came pretty close.

Trolling done well is a good thing, of course.

56

notsneaky 10.13.08 at 8:43 pm

Re:51
He stuck with the simple Keynesian models when doing Macro related stuff, like the exchange rate crisis etc. But when doing the trade stuff he stuck with general equilibrium, representative agents and stuff from IO. And every model has it’s conclusion stuffed in at some point else the conclusion wouldn’t follow from the premises. I’m guessing that when you’re referring to ‘sticking bits of math together’ you’re talking about something like RBC. But it’s modern version, DSGE really isn’t all that different from old school Keynesian stuff (and that’s sort of the real problem).

57

notsneaky 10.13.08 at 8:45 pm

Yeah yeah ok, I got to that timcat fellah.

58

John Emerson 10.13.08 at 9:14 pm

And every model has it’s conclusion stuffed in at some point else the conclusion wouldn’t follow from the premises.

Isn’t that how econ works?

59

dsquared 10.13.08 at 10:19 pm

Re 55:

Krugman on economic geography: He clearly did take some quite heterodox approaches here, including quite a lot of reinventing the wheel with respect to computational economics. This was the substance of Barkley Rosser’s complaint linked in that MR thread.

Krugman on Keynesian macro: I think we’re agreed here, though worth emphasising how utterly Keynes-Keynesian he was; nearly all of his simple models could have come straight out the General Theory or Essays in Persuasion, none of them depended on New Keynesian assumptions.

Krugman on trade theory: This is what he was most famous for, and here I agree with you that he was totally neoclassical-orthodox. But, among that benighted school, he was unusually honest – he clearly found the conclusions of new trade theory to be totally politically embarrassing, and spent most of the 1990s trying and failing to stop the likes of Robert Reich from picking up that ball and running with it. But nonetheless, he didn’t adjust his modelling approach to try and come up with something more politically useful. Compare to, for example, the well-known macroeconomist with the last initial F, who can take whatever approach you like, but will always come up with the conclusion that Social Security is bust and needs to be privatised.

I wasn’t referring to any specific techniques when talking about “sticking bits of math together” – there are plenty of post-Keynesians who can stick bits and pieces of post-Keynesian maths together to come up with a spurious rationalisation for a conclusion already decided on. I was referring to the kind of economics which is best described as being a family relation of Christian apologetics, designed at providing the equivalent of a higher moral justification for selfishness. (And the kind of evolutionary biology that always seems to end up showing how it’s natural for women to do all the housework). Neoclassical economics is lousy with this kind of stuff, as is a lot of Marxist economics, as was a lot of classical economics, and the reason why is, historically, that the whole subject got mixed up with a bunch of ideas called “Political economy”, somewhere between Edinburgh and Manchester in the 19th century. Krugman is and was an unusually honest economist, which is why my view is that the future of econ. as a science rather than a branch of apologetics has to rely on people like him, rather than the F’s and B’s (actually I have a lot more time for B) of this world.

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Forgot About Big George 10.13.08 at 10:19 pm

Actually, Chuvalo was TKO’d by George Foreman, although it’s true that he wasn’t knocked down in the process. Referee stoppage.

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John Emerson 10.13.08 at 10:34 pm

B. F. Skinner? I’m not good at riddles.

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notsneaky 10.13.08 at 11:03 pm

Krugman on economic geography: But that’s sort of the point. There was an older non-typical-economics literature out there and Krugman took the research question and cast everything in terms of fairly standard, mainstream methodology – Barkley had a problem because he seemed unaware of the earlier non-typical strain.

Krugman on Keynesian macro: For the most part I agree, though he did use things like Rational Expectations – and in fact that’s what drives the crash in his BOP crisis model.

Krugman on trade: sure.

“I was referring to the kind of economics which is best described as being a family relation of Christian apologetics, designed at providing the equivalent of a higher moral justification for selfishness.”

There must be a better way to describe this since I only have a vague idea of what you’re talking about. Yeah, yeah, sure, F always wants to privatize Soc Sec. And Joe Stiglitz always wants to regulate and nationalize. But a particular school? That is a “kind of economics”?

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dsquared 10.13.08 at 11:07 pm

Yes, it’s the most common style – what you might call the “Bought and paid for style” of economics. Krugman doesn’t do it. James Heckman doesn’t do it. John Q doesn’t and Dani Rodrik usually doesn’t. Nearly all of the rest of them do it, and that’s why Bloix is substantially correct to say that there’s something really quite screwed up about the state of economics today.

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dsquared 10.13.08 at 11:14 pm

To put it more clearly, and to adapt a joke I originally made about evoluionary psychology, a crude version of expected utility theory would suggest that economists would write whatever they thought it was in their financial or professional interests to write, and this would have nothing but the occasional point of contact with the truth. A slightly more sophisticated theory would suggest that economists gain some small degree of utility from writing things they believe to be true, so that when the financial profit/loss calculation was nearly evenly balanced, they’d write the truth for the sheer fun of it.

The economics profession seems to base itself on neither of these assumptions, but rather of a somewhat curious and entirely unscientific folk-psychological theory that economists write what they write because they believe it to be true.

As an empirical statement of social science which would be in principle testable through cleverly designed natural experiments, I would guess that 1) fits the data better than 2), and 3) doesn’t even past the laugh test. Krugman, etc etc, strike me as rare exceptions to the general rule.

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John Emerson 10.13.08 at 11:38 pm

59: Chuvalo was probably pissed. Being able to take punishment and remain standing was his forte, and the referee took that away from him.

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John Emerson 10.13.08 at 11:44 pm

After about 40 years of leftist ranting against economics, during the last 10 years or so I’ve had my worldview shaken by increasingly frequent encounters with cornucopian free-market fanatics who also hate economics because it wants to put some small restrictions on their fantasizing. Theoretically I should form an alliance of convenience, but that would be too hard and not much fun.

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roger 10.14.08 at 12:32 am

Notsneaky, although Hayek was no great shakes as an economist and a poor poor historian – the laughable Road to Serfdom being item number one in the indictment (a book that has spawned approximately zero historians following in its wake in it bogus and reference challenged explanation of classical “liberal” England – he did have the sense, when he won the prize, to explain, in his toast to the king, that there shouldn’t be a nobel prize for economics. According to Feldman’s history, Myrdal, who was instrumental in getting the bank to award the prize, came to feel the same thing when Milton Friedman won it in 1975.

The prize is an expensive joke, but if it were expanded to include all the human sciences, it would be a good idea. Friedman and Hayek, of course, would never have won in that case – not to mention the utterly rancid award to Scholes and Merton, in the year before their theories brought down Long Term Capital Management. Bourdieu might have received an award, however. Habermas, Foucault, etc. It would be easy to come up with a list of ten names right off the bat that are of infinitely more importance than, say, Gary Becker. Or, as much as I like his column, Paul Krugman. Of course, Chomsky. Levi Strauss. Etc.

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notsneaky 10.14.08 at 12:39 am

“Nearly all of the rest of them do it”

Uh, like who? Sticking with Blogging Economists, does Brad DeLong do it? Does Tyler Cowen do it?
And the way of defining at as “bought and paid for” pretty much means that you get to put anyone you disagree with in the category if you wish, occasionally feeling generous and leaving someone like Heckman out.

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Walt 10.14.08 at 12:44 am

Scholes and Merton invented the most successful piece of applied social science ever. If they don’t deserve a Nobel, then no social scientist does.

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John Emerson 10.14.08 at 12:45 am

Roger, whether it’s a science or not economics is ten times more influential than all the rest of the social sciences put together. The Chairman of the Federal reserve Board may be more powerful than the President, and the President has both a Council of Economic Advisers and a Treasury Secretary, and if the President gets out of line the bond market slaps him down immediately, as Clinton found.

Political scientists and sociologists have a wee bit of influence, and history, anthropology, linguistics, psychology and whatever other social sciences there are have virtually none.

International relations doesn’t even pretend to be a science.

So the econ prize is a very, very realistic prize, like the Kissinger Peace Prize.

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notsneaky 10.14.08 at 12:47 am

“a crude version of expected utility theory would suggest that economists would write whatever they thought it was in their financial or professional interests to write, and this would have nothing but the occasional point of contact with the truth.”

This maybe would be true if economists – the kind that come up with theories and do most of the serious work – were hired by politicians or corporations. But they’re not, they work for universities. And again, look through the list of the laureates to “test” your 1) and 2) against the supposedly laughable 3). Also as a test of the contention that “nearly” all of them are “bought and paid for”.

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John Emerson 10.14.08 at 12:52 am

How many university economists are on the revolving door with private business or government, and how many consult and lecture on the side?

Where to Merton, Scholes, and Schleifer fit into this idealistic scheme? Merton and Scholes weren’t the only reputable economists involved in the semi-criminal LTCM fantasy money-coining scheme, just the only Nobelists.

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John Emerson 10.14.08 at 12:52 am

Merton’s dad wrote a fun book “On the Shoulders of Giants”, but he was a sociologist. Poor man.

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Walt 10.14.08 at 1:02 am

Merton and Scholes lost all their investors money fair and square; they tried applying their theories, and got it wrong (according to some descriptions, they were not central decisionmakers, but the decisionmakers were animated by the same basic theory). Shleifer is a crook; his academic work could be paraphrased as “legal institutions are important, otherwise a crook like me can steal everything that’s not nailed down”.

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roger 10.14.08 at 1:08 am

Influence is an interesting criteria for a Nobel Prize. If the prize was for influence outside of the world of economics, than surely, say, Miliken would be a winner. Or Ivan Boesky.

However, influence is about a number of things. For instance, Foucault had a direct influence on rewriting the penal code concerning “moral crimes” in France. He had an indirect but very visible influence – not always to the good – in the de-institutionalization of the mad. He certainly had an influence in Queer culture. Like, say, Montesquieu or Weber, the influence a figure like Foucault has can’t be measured the way you could measure Merton and Scholes. And, of course, if one is that concerned about influence, than the person who has had the most influence on economics in the last thirty years is certainly the guy or gal who invented spread sheet software – that truly did revolutionize finance.

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John Emerson 10.14.08 at 1:09 am

Couldn’t Schleifer’s thievery be redefined as an experiment on the Russian experimental-subject economy, sort of like the Tuskegee experiment? Scientific but of questionable ethics, and don’t do it again.

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notsneaky 10.14.08 at 1:11 am

Uh… what exactly was “semi-criminal” with LTCM? You play the stock market sometimes you loose. In fact, I don’t know all the details but I think they were betting in the ‘right’ direction and would’ve done quite good (they did in fact do quite good before they started diversifying into areas outside their expertise) had they not run out of capital – I mean, yeah sure, should’ve factored in that crisis happens but what exactly makes this criminal?

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Walt 10.14.08 at 1:26 am

Dan Bricklin and Bob Frankston invented the spreadsheet.

It’s true, LTCM’s bets would have paid off if they hadn’t run out of capital. Ironically, not too long before they had sent a bunch of capital back to their investors to keep more of the upside for themselves. Oops.

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John Emerson 10.14.08 at 1:26 am

They did have a $140 million judgment against them. I suppose it wasn’t actually fraud, just normal pushing the envelope.

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roger 10.14.08 at 1:27 am

LTCM was a very legit hedge fund. Their only crime was against the gods of chance – it is called hubris. They had a very nice model that made money when markets went up, which is when every investor is a genius, and failed to predict spreads that their model told them would happen only once every ten thousand years. There’s an entertaining book about it by Roger Lowenstein. The same complacency was at work in the recent rise of Credit Default Swaps – another use of the Black-Scholes model that we are all very grateful for.

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John Emerson 10.14.08 at 1:28 am

Perhaps the $140 million dollar judgment against LTCM wasn’t for fraud but for something else quite normal and good. IANAL.

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Walt 10.14.08 at 1:29 am

For LTCM, I recommend the book Inventing Money by Nicholas Dunbar. It does a good job of explaining derivatives, leverage, even banking regulation. Since in some ways LTCM was a dress rehearsal for our current crisis, it’s still somewhat timely.

John, that’s very funny.

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Walt 10.14.08 at 1:31 am

Nick Dunbar’s book is more more informative than Roger Lowenstein’s.

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Walt 10.14.08 at 1:36 am

roger, their “very nice model” was a piece of social science research. Let me put it this way. If there were a Nobel prize for social science dating back to the nineteenth century, should Karl Marx have won it? Why or why not?

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notsneaky 10.14.08 at 1:44 am

Well, IANALE, but I think that judgment was in a civil suit involving some shady tax reporting, “quite normal” shady tax reporting in fact I think (though there’s actually such a thing is a completely different can of worms) – i.e., completely unrelated to the fact that they failed. Might be wrong on this one.

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John Emerson 10.14.08 at 1:50 am

See, these were all successful scientific experiments on human subjects and should be written up that way. I’m sure that Schleifer, LTCM, and the most recent fiasco all provided strong evidence against, if they did not entirely refute, certain hypotheses about economic organization.

As the Great Depression indeed did too.

I’m proposing a new experiment with a post-prosperity economy in which a standardized turnip is the monetary unit.

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John Emerson 10.14.08 at 2:00 am

Life itself is, indeed, and enormous uncontrolled experiment on human subjects who are, in turn, sometimes experimenters themselves.

Though usually the poor motherfuckers are just subjects — that is to say, objects.

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Cranky Observer 10.14.08 at 2:04 am

> Uh… what exactly was “semi-criminal” with LTCM? You play
> the stock market sometimes you lose.

When your bets start the threaten the financial stability of entire nations then they are no longer just a matter between you and your investors; those of us who face the consequence with none of the upside get a say. And taking on such bets without notifying the government agencies who will be expected to clean up your mess does strike me as criminal, yes.

Cranky

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roger 10.14.08 at 2:04 am

Walt, of course Marx should have won – as well as Tocqueville. Durkheim, too, even Mill – but the the eminently forgettable inventors of marginal utility theory, Jevons and Menger?

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Walt 10.14.08 at 2:15 am

Scholes and Merton’s theory is much closer to an established empirical fact than the work of anyone you mention. It’s as close to a quantitative theory that social science as ever produced. It works so well that after a while people forget it doesn’t work perfectly, and then it imperils the entire world economy. So unless you want to rule it out because its real-world effects (which is why I picked Marx as an example), I don’t see how you can say that the theory is unworthy of such a prize. (In its totality, the theory is the work of a bunch of people, so I suppose you can argue that Scholes and Merton don’t deserve their centrality.)

Since Jevons and Menger are not, in fact, forgotten, “forgettable” seems arguable.

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roger 10.14.08 at 2:41 am

Walt – Well, ask the next 12,000 people that you meet if they have ever read any Jevons or Menger. Then ask them if they have read any Marx, Mill or Tocqueville. Tally the answers – after all, we want an empirical fact! I would bet all the money I have that even if your selection was made at a meeting of the AEA, there would be a ratio of say 100 people who had read those three, compared to the .03 who had read any Jevons or Menger.

I think that is a pretty safe bet. I will call this Roger’s theory. If we can establish this as an empirical fact, I’m on my way to a Nobel. I could definitely use the money.

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notsneaky 10.14.08 at 2:50 am

Not many people – economists even – may have read Jevons or Menger but most economics today, for better or worse, has much much much more to do with Jevons and Menger (why you skipping Walras?) than with Marx, Mill or Tocqueville. It’s mostly cuz they just weren’t really good or entertaining writers in the way that the other three were. This of course doesn’t mean that they weren’t great thinkers. As Paul Krugman himself once wrote, “we’ve taken Economics away from the literati, and we’re not giving it back”.

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notsneaky 10.14.08 at 2:51 am

I might take Mill out of that above and put him in with the marginalists. I’m just biased against him cuz he was a good writer.

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Order of Magnitude 10.14.08 at 2:58 am

He was an economist, now is a socialist pamphleteer. The only Americans the Nobel committee seems to like are people like Carter, Gore and now PK.

This choice is clearly an attempt to influence the US elections.

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Walt 10.14.08 at 3:22 am

More people have read Tony Robbins than have read any of the authors you’ve listed. Does that make Tony Robbins the premiere social scientist of our day?

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metameat 10.14.08 at 3:36 am

I’m proposing a new experiment with a post-prosperity economy in which a standardized turnip is the monetary unit.

Oh Lord, this is giving me a flashback to Erskine Caldwell’s classic Depression-hicksploitation Tobacco Road, which kicks off with a fifty-page set piece about a bag of turnips.

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roger 10.14.08 at 4:07 am

Walt, no, Tony Robbins is not the premier social scientist of the day. However, as I am trying to evidence, the question of how one measures influence is much more subtle than you are making it out to be. In Marx’s day, more people read Samuel Smiles than Marx, or Mill, or Tocqueville. Who reads Samuel smiles today?

Myself, I think Marx is the greatest economist of the 19th century, partly because he didn’t think economics could be separated from its social context. notsneaky is suspicious of people who wrote well; I am suspicious of people who write badly. The reason is, I don’t at all think “conjectural histories”, which is what Adam Smith’s editor called the Wealth of Nations, can be separated from …. theoretical fantasy. Technicians within our accepted this or that theoretical fantasy might be worthy workers, but I don’t think they are on the same level, in any way, with the workers in natural sciences and literature.

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notsneaky 10.14.08 at 4:32 am

metameat, oh man, I remember that too now with that little girl dreaming about eating a turnip and all that. Can’t remember if I ever finished it. Though I sort of like the “God’s Little Acre” movie for reasons which I still don’t quite understand.

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Walt 10.14.08 at 4:50 am

How are you trying to make it out to be subtle? You offered a crude counting measure of influence. Marginalism is a fantastically influential idea, one which rightly or wrongly dominates economics, and colors both public policy-making and law. Marginalism is more influential than anything in Tocqueville. For whatever reason, economists tend to reduce their history to bite-sized chunks that they stick in textbooks, rather than having people read original sources. That doesn’t make Jevons and Menger uninfluential.

Likewise, economists don’t read Keynes in the original, preferring to read Hicks’ theoretical formulation in terms of IS-LM curves (which some people dispute is the real Keynes). Does that make Keynes not influential?

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roger 10.14.08 at 5:13 am

“Marginalism is a fantastically influential idea, one which rightly or wrongly dominates economics…”
In the U.S., you mean. Economics is not simply neo-classical economics and a neo-liberal version of Keynes that grudgingly concedes that Say’s law might not be right. It is institutional economics, marxist economics, behavioralist economics, etc. Dominant economic paradigmns change with the times. Now, of course, just to state that marginalism is a fantastically influential idea begs the question as to what dimension of social science we are talking about. I think in Political science, which is certainly every bit as strong as economics, Tocqueville is much more important than marginalism. The civil society movements that emerged in the 80s were much more “influential” than the classroom ideas of the marginalists.

You seem to assume what I dispute – that economics is somehow different from, more important than, and more influential than the other social sciences. I see no reason whatever to think that.

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Walt 10.14.08 at 5:20 am

roger: ? You want me to be assuming that since you’d rather have some other argument than the one we’re having. If Tocqueville is very influential within political science, I’m happy to be corrected. You’re the one who called Jevons and Menger forgotten. I’m happy to give the imaginary Nobel Prize in Social Science to all kinds of people. You seem to be saying that you wouldn’t give it to any economists, except those that meet some unspecified criteria.

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roger 10.14.08 at 5:32 am

Uh, Walt, look upstream. As I said, upstream, the idea of giving a prize in only one social science, economics, is silly – the prize should be extended to all of the human sciences. And you replied that pretty much none of the human sciences had the influence of economics. So we are, of course, back to the notion of influence and how to measure it. I think behind this is the notion that economics, more than the other social sciences, is somehow a ‘real’ science. I don’t think it is. I don’t think using “economics” to mean one form of economics, popular in the U.S., that assumes economics is about “free markets” helps, either.

In any case, I don’t think economists should NOT be given our imaginary social science Nobel. I don’t know what the mix of economists to, say, psychologists would be. Influence, elegance of the work, peer respect – these would be the factors that would decide such things, right? After all, why would an econometrician like Fogel get the Nobel prize? It is a mystery.

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Walt 10.14.08 at 6:23 am

I replied that if Scholes and Merton don’t deserve a Nobel prize in social science, then no one does, a claim that I stand by. This was in response to your claim that their prize was “rancid”. This has nothing to do with the broader status of economics — option pricing is unique even for economics. Scholes, Merton, and others developed the only area of social science that approximates a successful quantitative theory.

So if you’re looking for the heterodox/orthodox economics/sociology fight, you came to the wrong bar.

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dsquared 10.14.08 at 6:25 am

I merely note that my 1) above is, in fact, the theory of human behaviour assumed by nearly all neoclassical economics (including Krugman’s) and if Notsneaky is correct to say that it doesn’t work as a theory of the behaviour of economists doing economics in economics departments, that might be considered a problem.

And in answer to your direct question Radek, I’ve had dozens and dozens of arguments with BDeL on his blog when I thought he was putting his thumb on the scales in favour of some neoliberal plan or other (usually utilities privatisation or some such). As I’ve regularly noted in the context of Milton Friedman being a horrendous Republican hack at times, being a hack doesn’t mean you’re an awful person, or not an economist or deserve to be sacked from your job – it just means you’re a bit of a hack. But nonetheless it’s better to not be a hack, as Heckman (who was on the list because he was prepared to find politically inconvenient conclusions in education policy) and Krugman generally aren’t.

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dsquared 10.14.08 at 6:29 am

Scholes, Merton, and others developed the only area of social science that approximates a successful quantitative theory

this rillyrillyrilly isn’t true, other than on the basis of a really badly gerrymandered definition of what you’re going to call a “quantitative theory”, and on the basis of a really generous definition of “successful”. And even then I daresay I could find a counterexample with a little thought.

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notsneaky 10.14.08 at 6:34 am

Yeah and what is in the economists “financial and professional” self interest is to publish “stuff that makes sense and looks like it may be true”. Same as in, say, Topology. This is because the remuneration is not decided by large corporations or whatever.

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dsquared 10.14.08 at 6:37 am

In fact, thinking of the Matthew Effect in scientific journal citations, it isn’t even the only such piece of social science invented by a member of the Merton family.

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dsquared 10.14.08 at 6:39 am

Yeah and what is in the economists “financial and professional” self interest is to publish “stuff that makes sense and looks like it may be true”.

Really? We have a real-world natural experiment here, of the sort that economists like these days. On the subject of Social Security privatisation, was (and is) it in economists’ financial and professional self interest to write stuff that made sense and looked like it might have been true, or was it in their financial and professional self interest to write obvious bollocks with glaring logical inconsistencies?

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Walt 10.14.08 at 6:41 am

I’m prepared to gerrymander “quantitative” and generously interpret “successful”. Why do you think I put “approximately” in there? It’s the only area of social science where you plug numbers into a nonlinear equation, or a hideous numerical calculation, get an answer out, and have any hope of being true.

Now that I think about it, there probably are counterexamples in some areas of psychology where psychology shades into physiology. I’m thinking more of economics, sociology, and political science. The Matthews effect is clearly not such a counterexample.

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dsquared 10.14.08 at 6:44 am

I mean seriously Radek, you’re making a very strong and very strange claim about the institutional structure of American universities (and the NBER etc), which is really hard to square with the facts. There are lots and lots of cases where serious money is available for the writing of definite economic horseshit, and in these cases, economists (including a lot of Nobel Prize-winning economists) tend to follow my theory rather than yours. (And that’s not even getting on to the subject of Law & Economics and the associated consultancy industry, where professional economists are bought and paid for in the literal sense).

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dsquared 10.14.08 at 6:50 am

It’s the only area of social science where you plug numbers into a nonlinear equation, or a hideous numerical calculation, get an answer out, and have any hope of being true.

In which case, the Matthew Effect is indeed a counterexample – it predicts that scientific journal citations will follow a power law and that citations growth will be a self-reinforcing process. The network of science citations is the subject of loads and loads of research and any number of theorems of whatever degree of hideousness you like (and the Black-Scholes equation is not particularly hideous, nor is it nonlinear).

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Walt 10.14.08 at 6:52 am

Shall we ask Cosma Shalizi what he thinks of that research?

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dsquared 10.14.08 at 7:05 am

You can if you like but in the meantime why not read the great big essay he wrote about it; specifically I do know that he’s written a lot of very favourable things about Derek de Solla Price who did most of the early quantitative work on citation networks.

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notsneaky 10.14.08 at 7:11 am

Alright, Daniel, it’s time to stop with all the vague assertions and produce some examples of “definite economic horseshit”. And if you’re talking about F, then, you maybe got yourself one data point. Maybe, because actually I think the guy believes in what he writes and doesn’t do it out of any kind of expectation of pecuniary rewards (or even professional ones, since he caught a lot of crap for that one and his reputation definitely did suffer).
And let’s stick to the Nobel winners (and maybe throw the JBC laureates as well) just so there’s some notability here.
Here’s another obvious counterexample, though it’s not really in terms of academic publishing – Friedman publicly changing his mind on the targeting of monetary aggregates, i.e. monetarism.

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notsneaky 10.14.08 at 7:15 am

Like specifically on the laureates list. Who when and how? And can you get that number to be more than, say, 30% of them?

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dsquared 10.14.08 at 7:58 am

Maybe, because actually I think the guy believes in what he writes and doesn’t do it out of any kind of expectation of pecuniary rewards (or even professional ones, since he caught a lot of crap for that one and his reputation definitely did suffer).

I would very much quibble with that; it didn’t even stop him making the same claims again (and it is not like the stuff he wrote about SocSec which wasn’t based on the programming error was much better).

Let’s give this a go and see how high we get … on the subject of Friedman, I’m certainly claiming the letter he wrote in endorsement of the 2004 Bush tax plans.

Merton Miller was a co-author of the dreadful “Metallgesellschaft: The Economics of Synthetic Storage” in the Journal of Applied Corporate Finance, 1999, and also to a true horror co-written with Steve Hanke on Indonesian currency boards.

Vernon Smith wrote a number of papers for the Cato Institute on electricity privatisation and regulation, including “Regulatory Reform in the Electric Power Industry, 1996.

Harry Markowitz has written quite a number of articles on “fundamental indexing” which really are little more than marketing material for his funds.

Coase wrote that guff about lighthouses (and compounded it with a Reason interview that was even worse); this was probably more a case of it being politically convenient for him to pretend that there were entrepreneurially-constructed lighthouses in England in the 18th century than any financial gain from doing so, but he clearly gained utility from that.

So I’m not doing too badly just keeping to Nobel Laureates and just working off the top of my head. But I don’t really agree to your gerrymander here; let’s have a more simple test.

Social Security is a good subject, because it’s one where there are definite adding-up constraints and clear logical inconsistencies (for example, projecting long term investment returns very different from the long term rate of GDP growth). And it’s a subject on which a lot of American economists, representing IMO a reasonable cross-section of the profession, have written at least something. My contention is that the majority of these articles are definite and visible rubbish, and that the people who wrote them knew they were writing something that wasn’t true, but wrote it anyway as they thought that their careers would be enhanced by endorsing a right-wing policy.

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DRR 10.14.08 at 10:51 am

roger in the midst of his trolling asks a decent question? Why isn’t there just a fake Nobel for a more general social science literature, or at least one for each? I know next to nothing about academic psychology, but surely there’s some work done in the last 30 years more valuable than that done by Edmund Phelps.

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John Emerson 10.14.08 at 11:11 am

It’s the only area of social science where you plug numbers into a nonlinear equation, or a hideous numerical calculation, get an answer out, and have any hope of being true.

Is this the weak falsification principle, where theories are falsified once you lose hope for them?

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John Emerson 10.14.08 at 11:15 am

Did Radek just say that “only 30% of the Nabelists are corrupt” would be a refutation of Dsquared’s allegation? Please help me, I have trouble thinking quantitatively. Is this another case of the weak falsification principle?

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John Emerson 10.14.08 at 11:22 am

DRR: In the midst of my own trolling I explained that above. Economics is important in a worldly way, and the other social sciences are not. The economics prize is like the Peace Prize that way.

My favorite example of the institutional corruption of economics is the story of David Card. He got some interesting, unexpected empirical results on the relationship between the minimum wage and unemployment, and has testified that the reaction of the profession was so negative that he didn’t continue his studies and recommended that his grad students work on something else.

121

Lex 10.14.08 at 12:13 pm

I think you’d find that, if you were poor, sociology would be important to you, in that its conclusions frequently dictate the mindset of those who have day-to-day power over your existence. For similar reasons, I suspect development theory ought to matter to refugees in Africa.

122

ajay 10.14.08 at 12:37 pm

The science Nobels have been stretched fairly dramatically from their original terms: especially the Physiology or Medicine prize, which is now – and rightly so – used for the life sciences in general, or at least all the bits that Chemistry can’t be stretched to cover, because Nobel didn’t set up an actual Biology prize.

So has the Peace prize – Mohammed Yunus, Shirin Ebadi, the International Campaign to Ban Landmines, Al Gore, and Amnesty International are all great people (or things) but they haven’t done much for “fraternity between nations, the abolition or reduction of standing armies and the holding and promotion of peace congresses”.

Why not just stretch the terms of the Economics prize a bit too? “Development theory”, for one thing, certainly sounds like it could fit into economics.

123

John Emerson 10.14.08 at 12:50 pm

Are any economics Nobelists also eligible for igNoble Prizes? The way people talk about General Equilibrium, it seem to me that Debreu probably was. (As far as I know, the igNobel Prize can be awarded posthumously. )

124

J Thomas 10.14.08 at 1:38 pm

Perhaps in the current climate Krugman now regrets some of his clear defenses of global trade

Why should he? Free trade is like peace. Everybody ought to favor it. In both cases the result is more wealth to trade around. More people making good stuff instead of bad stuff.

You might think you’d profit from war, but other nations will fight back, and usually even the victors come out worse off than they went in.

But just like one nation can’t unilaterally declare peace, one nation can’t unilaterally declare free trade. Free trade can only happen when nations are agreed. And it isn’t enough that they avoid subsidies and tariffs. Pegging currencies can be the economic equivalent of war.

125

MarkUp 10.14.08 at 1:41 pm

”I think you’d find that, if you were poor, sociology would be important to you, in that its conclusions frequently dictate the mindset of those who have day-to-day power…”

Oh it has to be more than just the sociologists, I mean as our beloved leader says we are in the midst of an killer hangover following a really awesome bender. Which parent handed the kid the car keys and which one give ‘im the credit card? How do we quantify the culpability of pedestrian in the crosswalk?

Get your boots on…http://tinyurl.com/8rgbo

126

dsquared 10.14.08 at 1:43 pm

But just like one nation can’t unilaterally declare peace, one nation can’t unilaterally declare free trade.

(weeps)

127

John Emerson 10.14.08 at 1:45 pm

Why should he? Free trade is like peace. Everybody ought to favor it.

It’s that simple.

128

J Thomas 10.14.08 at 1:51 pm

Econ 101 has to be blown into tiny pieces. No more lifelong freemarket ideologues forever recapitulating their one term of freshman year neoclassical orthodoxy.

That sounds good. How about some computer simulations to go along with the Econ 101 teaching.

Like, for example, a simple unregulated market. Buyers come in at random times each with a maximum price they’ll buy at, and they’ll buy smaller quantities and slower at prices approaching their max. Sellers come in at random times each with a minimum price and they’ll sell smaller quantities and slower at prices approaching their min.

Students can play with the model and then write a short essay explaining how to determine the price equilibrium, and why the free market price will inevitably approach equilibrium.

Then maybe have a market where the student is the market-maker. After playing with the model, the student can explain how to determine the price equilibrium and why the free market price will inevitably approach equilibrium in this model.

Etc.

129

Cosma Shalizi 10.14.08 at 1:59 pm

Shall we ask Cosma Shalizi what he thinks of that research?

It’s actually good. The power law distribution of citations, in particular, really does hold up under sensible estimation and testing (see Figure 9u and table VII here). The evidence for the cumulative-advantage mechanism is reasonable, but less strong than that for the cross-sectional distribution. While it’s clear that cumulative advantage can’t be the whole story, it does give a rather good approximation. In particular the implications about first-mover advantage (more nearly the Matthew effect proper) are fairly solid, though again, fortunately not perfect.

Simply as quantitative social science, I don’t see much to suggest that Black-Scholes-Merton jr. is better than Price-Merton sr. (though my recollection is that Price did the actual math there).

130

Preachy Preach 10.14.08 at 2:19 pm

A friend of mine did just that as his undergraduate dissertation. I seem to recall that it showed not price equilibrium, but as you injected in more and more limit traders, a very sharp widening in bid/offer spread.

131

ajay 10.14.08 at 2:26 pm

126: dsquared, don’t take it to heart. Remember the wisdom of XKCD:

http://xkcd.com/386/

132

J Thomas 10.14.08 at 2:42 pm

Ajay, did I get that wrong?

Can one nation unilaterally declare peace or free trade?

133

notsneaky 10.14.08 at 2:42 pm

“Friedman, I’m certainly claiming the letter he wrote in endorsement of the 2004 Bush tax plans.”

But wait. What we’re talking about here is

““Bought and paid for style” of economics…. Nearly all of the rest of them do it,” and
“economists … write whatever they thought it was in their financial or professional interests to write”

So what you’re saying is that Friedman wrote a column advocating lower taxes, not because Friedman really believed in lower taxes, but rather because it was in his “financial and professional interests” to advocate lower taxes? At the end of his academic career? Come on, be serious! If the man believed in anything it was lower taxes.

I really don’t know that much about the finance guys, Merton and Markowitz. If you description about Markowitz’ stuff is correct, then yeah, that’s what we’re looking for here.

Vernon Smith – again, you think the guy really doesn’t believe in deregulation but only advocates it because he’s “bought and paid” for?

See, the bigger problem with your theory is that “writes something because they’re bought and paid for” is operationally indistinguishable from “writes something because they really believe it to be true”, although I think that often, as in the above cases, we can pretty much safely conjecture it’s the latter.

And more generally, if the money was in writing free-market-all-the-time stuff and economists were in it for the money wouldn’t more than at best 1/3 of the Nobel laureates (John E, that’s where the number came from) be free-market types? I dunno, maybe you can argue some kind of market segmentation and product differentiation here but at that point you’d really be stretching it.

In fact there’s a Krugman story relevant here. Back in the 90’s he was also accused of supporting free trade (or at least opposing the more stupid aspects of industrial policy) because he was “bought and paid” for by, well, whomever. To which PK replied that that’s not where the money is. Too little demand, too much supply.

134

Slocum 10.14.08 at 2:52 pm

dsquared:

Slocum: If Bush-bashing was so easy, then why didn’t more people do it, since it was so obviously the correct thing to do?

It was the easy thing for American academics to do. And they practically all did do it — just not with Krugman’s platform.

I mean, the main premis of your argument here appears to depend on reminding us of a whole raft of issues on which Prof. Krugman was undeniably right, and on which you and your political compatriots were equally undeniably wrong.

Um, no — on trade both Krugman, Slocum and his political compatriots were all right (in my view, anyway).

Just out of interest, how does this argument (to recap: Krugman right, Slocum wrong) get twisted round into your mind as something that would argue against giving a prize to Krugman?

I don’t know how that all got twisted in your head. I’m not arguing against Krugman’s prize. I think he deserved it, and I largely agreed with Krugman the economist in his pre Bush-bashing political hack days. I do think his Bush-bashing made him palatable to both the Nobel committee (and CTers) in a way that his economic theory would not have done. But if this results in his take on ‘Ricardo’s difficult idea’ being taken to heart by Democrats, great. Seriously. On free trade, people like Krugman (and DeLong) are invaluable because their incessant ‘shrillness’ has given them credibility on the left.

J Thomas: Free trade is like peace. Everybody ought to favor it.

Oh no, not everybody. Certainly not the candle-makers.

135

Righteous Bubba 10.14.08 at 2:54 pm

And they practically all did do it

This should be an easy one to prove.

136

notsneaky 10.14.08 at 2:58 pm

“My favorite example of the institutional corruption of economics is the story of David Card. He got some interesting, unexpected empirical results on the relationship between the minimum wage and unemployment, and has testified that the reaction of the profession was so negative that he didn’t continue his studies and recommended that his grad students work on something else.”

And then the reaction of the profession turned just plain ol’ nasty and they awarded him the John Bates Clark medal.

137

Walt 10.14.08 at 3:01 pm

Motherfucker. I’m going to get you for this, Cosma. I was better off with my old strategy of invoking Jesus to win arguments.

138

ajay 10.14.08 at 3:17 pm

132: yes. And yes.

139

dsquared 10.14.08 at 3:18 pm

It is a fact, though, first hand from Card, that he believes that doing work on the minimum wage is detrimental to one’s career as an economist.

“writes something because they’re bought and paid for” is operationally indistinguishable from “writes something because they really believe it to be true”,

the whole point here is that professional economists “really believe things to be true” which visibly aren’t, because they are “bought and paid for”, and as a result they are prepared to make the most extraordinary compromises with respect to their scientific and intellectual standards when they’re writing things which might be thought to support the political views that underpin the profession. It’s the same idea expressed in Upton Sinclair’s “It’s surprising how hard it is to explain something to a man when his income depends on him not understanding it”, and in JKG’s “faced with a choice between changing one’s mind and proving that there is no need to do so, nearly everybody gets busy on the proof”.

Vernon Smith surely did believe in the general concepts of privatisation and deregulation, but he couldn’t possibly have believed that the articles he wrote for the Cato Institute were good or sensible pieces of work, not if he’d read them back with a remotely critical eye. And yet they appeared with his name on them.

Just to clarify – I am sure that when the theologians write at length how the Biblical verse “Thou art Cephas, and upon this rock I shall build my church” implies the doctrine of Papal infallibility, they are not doing so in bad faith but rather because they really believe it. But what they’re doing is called “apologetics”, and anyone who isn’t a Catholic is on reasonably firm ground in thinking that the reason they believe it is that they’re part of a large and robust social structure which depends in part on the construction of plausible sounding reasons to believe that “Thou art Cephas …” implies Papal infallibility. Similarly, when Vernon Smith writes a terrible paper about electricity deregulation, what he’s doing is apologetics, and if it wasn’t possible to make a well-paid career out of capitalist apologetics, economists wouldn’t write so many dreadful papers of the sort we’re discussing here.

140

dsquared 10.14.08 at 3:30 pm

and I have not given up on this Social Security thing, by the way. Did every economist who wrote about “Social Security is bust” also sincerely believe in what they wrote? If so, then presumably they are not idiots, so they must have written it because they hadn’t bothered to think about what they were writing at all, which raises the question why not?

141

Jesus 10.14.08 at 3:33 pm

Walt @137,

that wouldn’t have helped, I’m afraid. I thought the research was pretty good too.

Peace out!

142

notsneaky 10.14.08 at 3:35 pm

I got some personal opinions on what Card said but actually I’m gonna keep them to myself here. If working on minimum wage is not good for your career as an economist he’s obviously not the perfect example for that proposition. If working on minimum wage is not good for your career as an economist NOW it’s because that research niche got over saturated and until some new data comes out (i.e. we get some min wage legislation passed) it’s gonna stay that way.

“”and if it wasn’t possible to make a well-paid career out of capitalist apologetics, economists wouldn’t write so many dreadful papers of the sort we’re discussing here.””

And yet you said “nearly all of them do it” – even granting you some of your examples this doesn’t explain why only a third of the Nobel Laureates (and even fewer JBC winners) can be accused of engaging in “capitalist apologetics” and the rest did just fine without it. If the economics profession is like the Catholic Church then heresy is rampant within it. And has been, since it’s inception, or at least since the inception of its greatest honor.

You’re offering up all these analogies and witty remarks (which is your forte) without once stopping to think if they are appropriate. Apparently this “large and robust social structure” includes the likes of Stiglitz, Sen, Akerlof , Kahneman and Krugman recently, and started out with honoring Tinbergen, Samuelson, Arrow, Leontief, Kuznets and Hicks (and of course every single one of those people well deserved the prize). Like I said beginning of this, I really don’t understand how anyone can look at the list of Nobel laureates and argue that the prize mainly honors “capitalist apologists”. In fact, the nutzoid Austrians and crazy free marketers who are screaming that the prize is given for “socialism” are probably an epsilon less wrong than your sociological model of how the economic profession works.

143

J Thomas 10.14.08 at 3:38 pm

Ajay, I was asking a rhetorical question and then you answered it the wrong way.

If one nation can unilaterally declare war, how can the defending nation possibly unilaterally declare peace? Could iraq have declared peace in 2003?

If one nation does not allow free trade, how can another nation have free trade with them?

Your answers do not make sense.

144

John Emerson 10.14.08 at 3:41 pm

The killing point with Card is that he did not follow up his research and the question and warned his students away from doing so, even though it was very interesting and suggestive. Rewards he received after pulling in his horns hardly destroy my point and might reinforce it.

145

notsneaky 10.14.08 at 3:47 pm

But he did follow up his research for quite awhile.

146

notsneaky 10.14.08 at 3:55 pm

And Card got his JBC in 1995. He basically stopped working on this topic AFTER this. Here’s some more from that same interview:

“my research is mischaracterized both by people who propose raising the minimum wage and by people who are opposed to it.”

and

“I also thought it was a good idea to move on and let others pursue the work in this area.”

which doesn’t sound like a discouragement to working in the area at all.

I should probably clarify what I said above:
I got some personal opinions on how other people use what Card said but actually I’m gonna keep them to myself here.

http://www.iir.berkeley.edu/faculty/card/research.html

147

MarkUp 10.14.08 at 4:13 pm

”If one nation does not allow free trade, how can another nation have free trade with them?”

You answered yourself two sentences above. But then being a cynic, I think “free trade” falls in the same category as, benign tumor, Holy War, and pet fish.

148

Kevin Donoghue 10.14.08 at 4:16 pm

If one nation does not allow free trade, how can another nation have free trade with them?

If the theory of evolution is correct, why are there still monkeys around? If I called the wrong number, why did you answer the phone?

149

ajay 10.14.08 at 4:28 pm

Ajay, I was asking a rhetorical question and then you answered it the wrong way.

Is there, then, a right way to answer a rhetorical question?

150

ajay 10.14.08 at 4:29 pm

Don’t answer that.

151

arthur 10.14.08 at 4:34 pm

About this bought and paid for business, in Nick Dunbar’s Inventing Money there is a story about how someone wanted to get index/FF futures listed on CBOT, but he needed to convince the regulators, so he asked Friedman to write a piece in support as theoretical backup. Friedman replied, okay, but I am a capitalist. So the index futures guy got the hint and paid Friedman a sum of money. So while Friedman himself probably believed in the benefit off having widely traded index futures, he knew his product has value, so he charged money for it. Sorry the details are a bit unclear, I am working on memory here.

But really, I think the mechanism at work here is that writing politically convenient free market nonsense will give you a higher chance of getting spotted by places like the AEI or CATO and gives you a higher chance of landing lucrative advisory positions/ speaking fees/ etc. No one has to lie or say anything they don’t believe in, but the very fact that these incentives exist may
1) attract people of a right wing bent into the profession,
2) gives them a public platform where the intellectual standards are more lax (notice that a lot of think tank personnel come from second string departments), and
3) induce them to offer their political opinions, even though it is outside their area or expertise (which I suspect applies to Vernon Smith’s case) or they haven’t really thought it through. So yeah.

Oh and dsquared, why are you dissatisfied with Black Scholes as a quantitative theory? Is it because of volatility being unobservable?

152

dsquared 10.14.08 at 4:36 pm

Radek, I’m not moving on until you stop banging on about Nobel Prizes and answer the question about Social Security. The Nobel Prize winner is chosen by an academy in Sweden, and I am perfectly happy to agree for the sake of argument that the Swedish economists who serve on the relevant panel are as unbiased as you like.

However, they don’t really have much to do with setting the economic and institutional conditions under which the majority of the economics profession works. For the majority of all economists alive today, who have no real hope of following in the footsteps of Krugman, Sen or Akerlof, the best that they can hope for is a tenured position at an American university. And in order to get that more realistic prize, they have to fit in with the actual social structures of the profession. And I submit that the Social Security natural experiment strongly suggests that these institutional structures seem to be terribly inclined toward the production of bullshit (and furthermore, toward the production of a particular kind of bullshit which might be considered highly convenient for the kind of person who makes large donations to universities). I do think we need to get this one squared away first.

153

dsquared 10.14.08 at 4:38 pm

why are you dissatisfied with Black Scholes as a quantitative theory?

I’m not dissatisfied with it; I think it’s about as good a workaday option pricing model as it would be reasonable to hope for and it does incorporate a number of very important and deep concepts. It’s just the idea of it as an unparalleled achievement of the social scientists that I don’t agree with.

154

geo 10.14.08 at 5:10 pm

There seems to be a flat contradiction between Dsquared’s “bought and paid for” and notsneaky’s “they clearly believe what they say.” But is there really? It’s true that economists aren’t simply paid to change their beliefs and spout right-wing drivel. It’s true, too, that one can’t simply change one’s beliefs, or produce new beliefs, at will. But if most buyers (ie, funders) are looking to buy (ie, fund) right-wing drivel, then that’s mostly what will be bought and paid for. It’s not that economists are rewarded for saying dumb right-wing things they don’t believe. It’s that economists are rewarded for saying dumb right-wing things they do believe. In other words, there’s an ideological filter at work in academic economics. As there is in academic political science, journalism, and diplomacy.

I believe a first approximation of this view is: “In every epoch, the ideas of the ruling class become the ruling ideas.”

155

geo 10.14.08 at 5:11 pm

Wrote the above before seeing Arthur’s comment (151), which says it better.

156

John Emerson 10.14.08 at 5:12 pm

“I also thought it was a good idea to move on and let others pursue the work in this area.”

That sounds pretty euphemistic to me, like the TV guy with low ratings who resigns to work on exciting new projects. As I said, discouraging his grad students from working in the area strikes me as telling.

Basic economic theory would predict that high immigration plus offshoring would reduce the wages of unskilled American labor, simple supply and demand, so freemarketers look for data showing otherwise. Data says that raising the minimum wage apparently doesn’t increase unemployment, so freemarketers stick with the theory in that case. Whatever works.

I have suggested that academic economists are more liberal and Democratic than the norm because they get paid less than private-sector economists. Freemarketers feel morally obligated to go for the top dollar.

157

Slocum 10.14.08 at 5:15 pm

…these institutional structures seem to be terribly inclined toward the production of bullshit (and furthermore, toward the production of a particular kind of bullshit which might be considered highly convenient for the kind of person who makes large donations to universities).

Ah, the ‘vicious’ circle in which prosperity leads to university donations which, in turn, reinforce the very system that produced the prosperity. So, for example, Larry Page might donate some of his fortune to a university which donation would tend to support the production of ‘bullshit’ that would then lay the groundwork for future Googles? Good point. I like that. That’s really my kind of ‘vicious’ circle.

158

dsquared 10.14.08 at 5:22 pm

No, not really at all.

159

God 10.14.08 at 5:29 pm

No-one ever asks for My opinion nowadays, but I just wanted to throw in My two cents and back up Cosma Shalizi and Jesus on this one. The research looks very solid to Me. Walt, you’re on warning: keep going like this and you are heading for a smiting.

160

roger 10.14.08 at 5:30 pm

I don’t think economists are generally ‘bribed’. Systematic biases can happen without the members being materially given money for specific opinions. Rather, selection criteria – in tenure, in opportunities to work on think tanks, in being selected to voice an opinion in the paper – can exclude one set of opinions and favor another over time. This happens in every discipline. The problem is, economists seem to interpret this as proof that they are a real natural science – converging towards a nifty scientific paradigm. Instead of a discipline which, as all disciplines do, tends towards a core of beliefs. This is, of course, common across sciences and pseudo-sciences – you will not find a stronger paradigm across time than you find in astrology.

As a certain attitude sets in – if, for instance, you as a libertarian academic start defending price gouging, ( by as in the sick little book by Russ Roberts recently touted on the freakonomics) – than, naturally, you will have less resistance to grants that increasingly look like bribes. For instance, take the relationship between the Koch foundation and George Mason University’s economics department. Does the departments taking of that money make it the case that an economist trained at, say, MIT – not to speak of an neo-institutional economist, like James Galbraith – will not be hired there? Is the Koch foundation paying to have tenured advocates of fringe libertarian views spread them in the press? I for one am surprised by the number of GMU econ professors I see popping up in the major media. How did this department suddenly get so photogenic?

Certainly not through bribery. But certainly the Koch foundation has facilitated a network of connections – GMU, the AEI, the Heritage foundation. Say, if I was David Horowitz I could connect all of these things as the terror network! Although in reality, of course, all establishments persist through connectivity, and all changes in them alter the connecting hubs, that’s all.

I see no reason to think that such cases are different than those in which a pharmaceutical company which “partners” with a university biochem or genetics department puts heavy pressure on the department not to criticize the said company or its products.

These relationships will come under much more scrutiny in the coming years, as the financial sector’s shrinking leads to more and more pain, while the economics commentariat that shows up on, say, the Business page of the NYT continues to chirp away at its neo-liberal song.

161

John Emerson 10.14.08 at 5:34 pm

Jeff Schmidt’s “Disciplined Minds” described the way that professional training and standards impose a tacit ideology on professionals. An economist can be pretty right wing just by consistently supporting the default professional assumption on almost every question.

Schmidt distinguishes between labor (follow orders, take little initiative, personal opinions unimportant), professionals (have internalized professional standards and can be expected to do the right thing and not rock the boat) and managers (those who, whatever their training, make the actual decisions and tell the professionals what to do.) Professionals always think managers are idiots but always obey them (within very wide limits). Management seems like idiots because they aren’t castrated; they take everything into consideration, not just the things that professionals are limited to thinking about.

A professional will know his own job far better than the manager does, but he won’t know the manager’s job at all.

Democrats are the professional party now, Republicans are the management party, and Democrats think that management is stupid but management always wins.

Ivy league wonks think that Rove is stupid because he doesn’t have a degree. But Rove is a manager, not a professional. The PhDs work for Rove.

162

John Emerson 10.14.08 at 5:45 pm

Bribery itself seldom is a cash-on-the-barrelhead quid-pro-quo transaction. Often it’s more along the lines of “X is a good man and we’re good friends, and I make sure that he always gets a fair break”. Snidely Whiplash seldom comes in twisting his mustaches with a roll of hundreds in one hand and a list of bills in the other.

163

dsquared 10.14.08 at 5:45 pm

I don’t think economists are generally ‘bribed’

Quite; I buy a chicken because I want eggs, but I don’t then bribe my chicken to lay eggs.

Of course, what we are talking around here is JK Galbraith’s concept of “the conventional wisdom”. The phrase is used today to just refer to “what folks think”, but the original definition emphasised the congeniality and acceptability to its audience. The conventional wisdom of economists is what’s most acceptable to the consumers of economics, and if you believe that the main audience for economics consists of disinterested seekers after truth, you’re missing the point.

164

John Emerson 10.14.08 at 5:57 pm

Economists are professionals, with limited autonomy, and their audiences are managers, who call all the shots.

A study of economics-trained managers compared to non-managerial professional economists might be interesting.

165

Michael Greinecker 10.14.08 at 6:00 pm

@142 “In fact, the nutzoid Austrians and crazy free marketers who are screaming that the prize is given for “socialism” are probably an epsilon less wrong than your sociological model of how the economic profession works.”

Actually, the “socialists” mainly got the prize for being technocrats doing rigorous modelling. The real politcs involved in the prize were trying to make economics more scientif. Which was the reason Joan Robinson didn’t got the prize- as expected by Robert Lucas, my favorite Chicago economist.

There are some real incentive problems in economics though. Like the need to do DSGEs.

166

notsneaky 10.14.08 at 6:03 pm

“It’s not that economists are rewarded for saying dumb right-wing things they don’t believe. It’s that economists are rewarded for saying dumb right-wing things they do believe.”

So why is it that most economists DON’T BELIEVE IN DUMB RIGHT WING THINGS??? Or even that a bit more than half of them don’t believe even in non-dumb right wing things???

I know, I know, I know. Caps means I’m yelling. But I’ve said this like eight times already in this discussion and it comes up in every freakin’ discussion on this topic and continues to get ignored lest it fuck up somebody’s encrusted world view. So don’t blame the yeller, blame the freakin’ wall(s).

167

John Emerson 10.14.08 at 6:10 pm

Sneaky, don’t you believe in dumb rightwing things?

168

notsneaky 10.14.08 at 6:19 pm

“I’m not moving on until you stop banging on about Nobel Prizes and answer the question about Social Security.”

Who, Feldstein? Sure you can have him. As I said he may be a data point for your theory. More generally I’m sure you can find other, even notable, economists who think that Soc Sec should be privatized (prolly Prescott) – but the profession as a whole ? No freakin’ way. At best a good number may favor some tinkering here and there. And the number of those who ‘cook’ their methods – which is essentially what you’re accusing folks of here – to get their most favored results? Way way small. And since you’re making these accusations, please provide some evidence. I’m not sure what this “Social Security experiment” that you keep referring to is supposed to be exactly.

“However, they don’t really have much to do with setting the economic and institutional conditions under which the majority of the economics profession works.”

Huh? I mean, you would be right if all them Nobel-Prize critics were right and the Nobel Prize WAS considered a piece of fake junk by most academic economists. But it’s not. The laureates are the people that everyone looks up to (yes, even across political divides) in the profession. Most published papers by these non-Krugman-Sen-or-Akerlofs are based on work developed by Krugman-Sen-or-Akerlofs or other prominents (from whose ranks the Nobelists are chosen). The structure of the profession corresponds pretty closely to the structure of the award recipients (perhaps adjusting for some minor changes in the time trend). No one gets their papers published, or receives professional respect simply by extolling the virtues of free markets. In fact that’s a pretty good way to get yourself ridiculed, unless you’re Prescott/Lucas/Friedman caliber as people will be all too happy to point out all the exceptions and shortcomings that’ve been documented by the profession over the years. And again, I’m actually just repeating what Krugman has said in the past here.

Additionally, the Krugman-Sens-and-Akerloff are the people who are the editors of the journals, who organize and sponsor conferences and so on. They have a HUGE impact on “the economic and institutional conditions under which the majority of the economics profession works.”

At this point I’m actually having hard time telling if you’re not just trying to pull my leg here.

169

Robert 10.14.08 at 6:22 pm

Here’s a dumb rightwing thing:

Market systems should be evaluated based on whether or not they achieve Pareto efficiency.

Duncan Foley was told that he might as well quit the profession if he didn’t believe that.

170

notsneaky 10.14.08 at 6:22 pm

“Sneaky, don’t you believe in dumb rightwing things?”

No, but I support the Chouans of the Vendee. They just wanted their priests back.

171

notsneaky 10.14.08 at 6:27 pm

Hey Robert, wasn’t that a dumb Oskar Lange, Abba Lerner thing to? At least if you replace the “Market” with “Economic”.

172

geo 10.14.08 at 6:28 pm

Notsneaky: Of course I wasn’t saying that economists are rewarded ONLY for saying dumb right-wing things. I was simply trying to explain why so many economists survive (even flourish) as economists despite saying dumb right-wing things. The reason is that most of those whom dsquared calls the “consumers of economics” believe those same right-wing things and therefore financially support economists who believe them. Of course there are other “consumers of economics,” eg, students, unions, foundations, liberal publications, etc., and they support other economists — some of whom no doubt believe dumb things, but not, as it happens, so many or so dumb. And of course, the latter consumers have only a fraction of the financial clout that the business class has.

Finally, I don’t mean that economics is pure ideology. Some ideas are more plausible than others. If, as you suggest, no more than one-third of economists believe dumb right-wing things, that may be because the economics profession is only partly, not wholly, corrupt.

173

John Emerson 10.14.08 at 6:52 pm

The Card case is similar to that of a friend of mine. After he got his masters (Sociology) he had a choice between two pretty good PhD programs, one relatively leftist and one right-center (and supposedly apolitical too, of course). In terms of his own interests he liked both. The right-center program (Texas) offered much more money than the leftist one. It was an easy, almost automatic choice, and did not involve any dishonesty or betrayal on his part. But multiply that by enough grad students and enough schools, and you have a very strong skew to the profession. And from the descriptions I’ve read, that’s what happened to Card (and his students).

NOTE: To me Krugman is left-center at best.

NOTE 2: Some say that academic leftists mostly come from wealthy families. If that’s true, I’ve just described why. It’s not a good thing, but it doesn’t mean what creeps like David Brooks pretend it does.

NOTE3: Don’t even talk to me about leftists in English, cultural studies, anthropology, etc. This are like the sinktraps of the intelligentsia, the leftist booby prize, the leftist ghetto. It reminds me of the time around 1970 when the IWW succeeded in organizing the Winchell’s donut chain.

174

sg 10.14.08 at 7:13 pm

notsneaky, is your argument against dsquared that

a) there is no market for right-wing ideas from economists
or
b) expected utility theory (or whatever dsquared is basing his argument on) is wrong
or
c) that theory doesn’t apply to economists, just to peons
?

175

notsneaky 10.14.08 at 7:16 pm

My argument is that the incentive structure for academic economists does not reward knee-jerk free market cheer leading as dsquared and some others here suggest.

176

notsneaky 10.14.08 at 7:19 pm

“Actually, the “socialists” mainly got the prize for being technocrats doing rigorous modelling.”

Uhhh, like Myrdal? Unlike Lucas?

And yes, I agree that there are various incentive problems in economics – lot of them which generalize to academia as a whole. But this particular one is not one of them.

177

John Emerson 10.14.08 at 7:24 pm

OK, try again. Computer science is known to be an area where it’s hard to keep faculty because the non-academic jobs are so much better. Is economics another such case? And aren’t there lots of little arrangements whereby academic economists can supplement their income with consulting and speaking fees, the way that professors in the sink-trap departments can’t?

178

sg 10.14.08 at 7:29 pm

why not?

179

notsneaky 10.14.08 at 7:30 pm

Refer to what Krugman said, like I indicated above.

180

sg 10.14.08 at 7:39 pm

I mean, why would captains of industry and such-like not want to reward knee-jerk free market cheer-leading?

Why has there been so much of it about these last years, if the expected utility (or whatever) of spouting it so low?

181

sg 10.14.08 at 7:41 pm

But notsneaky, if the supply is high and the demand is low, wouldn’t that be because there are lots of knee-jerk free marketeers who think they’re going to be rewarded?

Why would those economists think that?

182

notsneaky 10.14.08 at 7:46 pm

Re:177
Not really. A little bit maybe. But mostly the folks who want the big bucks get the MBA’s and the folks who want to do social science get the Econ PhDs, so the separation happens earlier, unlike CS (maybe like CS and some math fields). Sometimes, once you get tenure and research doesn’t excite you anymore – this is my impression – some folks will branch out into consulting etc. Neither at the school(s) where I got my degree(s) nor where I’m at right now is anyone making any big bucks from consulting and speaking fees. I would in fact say ‘no big bucks whatsoever’ but since I don’t know everything about all my colleagues and former professors I hesitate on that. Mostly I supplement my income by doing textbook reviews.
In fact I do know a slightly little bit on various sizes of speaking fees – from looking indirectly at the ‘buyer’ side rather than the ‘earner’ side – and all things considered Famous-Economist-Speakers (up to Nobel laureates) are a pretty good deal. Not the cheapest but definitely priced-to-sell compared to Famous-Writers, Famous-Business-People, Famous-People-Who-Wrote-Books-About-Business, Famous-Ex-Politicians, etc. And if you want a bargain I’m sure you could get one of the lesser known Economic Nobelists for peanuts. Maybe even free if you asked them really nicely. Basically, PR and telling people what they want to hear is not one Economists’ strong points. As a result the demand just isn’t there, people related to the field aside.

183

notsneaky 10.14.08 at 7:49 pm

Ug, sg, because the knee-jerk free marketeers are not economists. But from point of view of those who want to ‘Peddle Prosperity’ they are a good, cheap substitute. Go read Krugman’s books from the 90’s.

184

notsneaky 10.14.08 at 7:50 pm

Same thing applies on the other side of the spectrum. And Krugman talks about that too.

185

notsneaky 10.14.08 at 7:51 pm

And quit the Socratic dialogue bullshit.

186

sg 10.14.08 at 7:54 pm

notsneaky, asking questions is not socratic dialogue. Nor is it bullshit. Your continuously tiring attempts at being an offensive little git are, however.

given you are yourself a knee-jerk free marketeer, I presume you don’t count yourself an economist? Or was that question too socratic for you?

187

notsneaky 10.14.08 at 7:55 pm

Are you really such a twit?

188

dsquared 10.14.08 at 7:56 pm

No one gets their papers published, or receives professional respect simply by extolling the virtues of free markets. In fact that’s a pretty good way to get yourself ridiculed, unless you’re Prescott/Lucas/Friedman caliber as people will be all too happy to point out all the exceptions and shortcomings that’ve been documented by the profession over the years

Just by way of calibration, would you say that Brad DeLong has made a career out of “extolling the virtues of free markets”? Because, as far as I can see (and I seriously doubt whether he would disagree), he has. The fact that Brad is actually probably marking out the leftmost fringe of mainstream economics is kind of my point here.

189

notsneaky 10.14.08 at 8:04 pm

Well, lemme turn that question around on you. Would you say that Brad DeLong has made a career out of by being a knee-jerk free market proponent?

If you had said “extolling the virtues of markets” without the “free” I might be inclined to agree but that’s a fairly important difference (not to mention the word ‘simply’). And there are numerous people to the left of Brad. Stiglitz for example. John Roemer. But of course, yeah the tails flatten out the more you move away from the center of the distribution. On both sides.

190

lemuel pitkin 10.14.08 at 8:05 pm

Computer science is known to be an area where it’s hard to keep faculty because the non-academic jobs are so much better. Is economics another such case?

Obviosuly there is a lot more non-academic demand for economists than for other social scientists. How this affects the quality of academic economists is a different question. In the heterodox ghetto, it’s widely believed that the reason the Fed keeps so many economists on staff (maybe 750 across the system, IIRC) isn’t that their research is particularly useful, but because the chance of getting one of those jobs gives academic economists an incentive not to wander too far off the reservation. But that could just be sour grapes…

191

Cosma Shalizi 10.14.08 at 8:16 pm

We’re all about separating the wheat from the tares, Walt.

192

dsquared 10.14.08 at 9:39 pm

Would you say that Brad DeLong has made a career out of by being a knee-jerk free market proponent?

I don’t know what Brad did before he got a tenured position, but basically yes, unless you’re going to define “free market” in some utterly tendentious fashion. I’ve had about a thousand arguments with him about the Washington consensus. Brad certainly does define the very leftmost possible acceptable opinion for an economist to hold as being his own, and that’s a problem (PS you really are kidding yourself if you think Stiglitz holds a materially different view of the world from Brad’s).

193

Colin Danby 10.14.08 at 10:24 pm

Exactly. Brad’s neoclassical and neoliberal. We like him because he’s humane and non-philistine, characteristics which set him apart from many other economists. “Left” and “right” really don’t do useful work in this kind of discussion.

194

engels 10.14.08 at 10:46 pm

Ug, sg, because the knee-jerk free marketeers are not economists. But from point of view of those who want to ‘Peddle Prosperity’ they are a good, cheap substitute. Go read Krugman’s books from the 90’s.

Where in Peddling Prosperity is Krugman supposed to have made the claim that no academic economists are ‘knee-jerk free marketeers’?

195

engels 10.14.08 at 10:47 pm

I like Brad Delong’s blog in many ways, but humane and non-philistine are not adjective that I would apply to many of his posts.

196

J Thomas 10.14.08 at 11:08 pm

“If one nation does not allow free trade, how can another nation have free trade with them?”

If the theory of evolution is correct, why are there still monkeys around? If I called the wrong number, why did you answer the phone?

I don’t get it. The standard story says that if one country inhibits free trade in ways intended to benefit itself, other countries will retaliate. So the US government mustn’t inhibit free trade or else others will too. But others do, and we don’t retaliate.

It’s as if japan attacked us at Pearl Harbor and conquered the philippines and we said “We don’t care, we just aren’t going to have a war. We’ll have peace instead.” My father said it takes two to fight, but is that true? Doesn’t it take two to have peace, and only one to do violence?

I don’t see what this has to do with evolution theory, but if you’re going to apply evolution shouldn’t it be something about coevolution? Economies that interlace themselves so tightly that they can’t survive without each other, and so require their governments to get along….

197

engels 10.14.08 at 11:14 pm

(‘Why oh why are the is this cryptic Nazi idiot the stupidest man alive?’ doesn’t strike me as a style of critique that could be easily mistake for F. R. Leavis or Cyril Connolly.)

198

lemuel pitkin 10.15.08 at 12:01 am

J thomas-

You really don’t have any idea what the economic arguments for free trade are supposed to be, do you?

199

notsneaky 10.15.08 at 12:04 am

Well, ok, then. You think Brad is a knee jerk free marketer. I think he’s center-left (as opposed to wacky left, of say, Chomsky and Sweezy whom he refuses to venerate sufficiently earning him the disapprobation of the rest of the wacky left). Now that we’ve ‘calibrated’ this shall we get back to talking about how your theory of how the economic profession works is false, unless you conveniently define everyone to the slightly right of yourself (and as far as I can tell Brad and Paul’s views on pretty much everything are virtually identical) as knee jerk free marketeer?

And in your comment (192) you yourself give one way that Stiglitz is to the left of Brad when you mention the Washington Consensus. I’m also not sure exactly how much work the word “materially” is doing in there. I mean, you know, materially, we share the same world view too (though I suspect you of having better fashion sense).

Additionally, if you’re right that Brad represent the leftmost of the economic profession, then why not stick with the Nobel laureates? They got to be to the right or the same as Brad. But they’re ok. Somehow. But the profession’s different – full of hacks writing horseshit – despite them. Even though they’re the same.

Maybe that ‘calibration’ thing was a good idea in the sense of clarifying some basic issues which I don’t think we’re going to get past.

200

engels 10.15.08 at 12:52 am

I think he’s center-left (as opposed to wacky left, of say, Chomsky and Sweezy whom he refuses to venerate sufficiently earning him the disapprobation of the rest of the wacky left).

The complaint of people on the left is not that Delong ‘refuses to venerate’ people like Chomsky, Sweezy, Ralph Miliband, Gunter Grass and others, it is that he appears to be unable to deal with them in any kind of honest or rational way. With your frequently repeated offhand abuse of the ‘wacky left’, ‘commies’, etc and your seemingly unshakeable conviction that anyone who disagrees with you on a systemic level about the desirability of capitalism must just be an idiot you embarrass yourself in a similar way. It is not necessary to be at all leftwing to take exception to this kind of thing, to find it anti-democratic, stupid and unpleasant.

201

engels 10.15.08 at 1:04 am

unless you conveniently define everyone to the slightly right of yourself (and as far as I can tell Brad and Paul’s views on pretty much everything are virtually identical) as knee jerk free marketeer

I can’t speak for Daniel but the obvious error here appears to thinking that whether or not one is a ‘knee jerk free marketeer’ must be solely a function of one’s opinions, rather than of how those opinions are formed and defended.

202

notsneaky 10.15.08 at 1:11 am

I happen to think that Brad’s exactly right on Chomsky and Sweezy (which were the two that I mentioned and the two that keep coming up over and over again as attacks on him).
But with this part: “unshakeable conviction that anyone who disagrees with you on a systemic level about the desirability of capitalism must just be an idiot” you’re just putting words in my mouth.

And that kind of basic shittiness characterizes pretty much every interaction I ever had with you on here and makes your complaint about ‘wacky left’ childish. It’s basically a variation on the LBJ strategy, trying to troll me into defending myself against ridiculous crap. And because this is a recurring pattern whenever you respond to me, I keep telling you to fuck off. So fuck off.

203

John Emerson 10.15.08 at 1:32 am

Barbara Ehrenreich was also on Brad’s shitlist.

He called Gunter Grass a crypto-Nazi based on his long-undisclosed membership in the Waffen-SS for a few months at the age of 17 at the end of the war.

Wiki: As a result, Waffen-SS veterans were denied many of the rights afforded to other German combat veterans who had served in the Heer, Luftwaffe or Kriegsmarine, except conscripts sworn in after 1943, who were exempted from the judgment on the basis of involuntary servitude.

(If Grass was a volunteer and not a conscript this would be irrelevant.)

The trigger was an intemperate statement Grass said about globalization, one which had nothing Nazi about it IIRC.

I still like Brad fine for a variety of reasons but I think of him as just barely center-left.

204

MarkUp 10.15.08 at 1:34 am

195> ”So the US government mustn’t inhibit free trade or else others will too. But others do, and we don’t retaliate.”

Was it a long ride in from Jupiter? Do you like banana’s? Are you RoundUp™ ready? And obviously the “friendship based on trade” established by Great White Fleet all about folks being mean to us.

205

notsneaky 10.15.08 at 1:36 am

Personally, I thought the Grass thing was weird. On both sides, Brad’s and Gunter’s. Gunter said some weird things and it seemed to me Brad misunderstood them or something and then was unwilling to back down.

206

engels 10.15.08 at 1:42 am

I’m not putting words into your mouth, Radek, I am giving you my opinion of the attitude, which seems to underly what you have written here.

Your second paragraph is pure personal attack which while not unexpected does nothing to address my points and so is not very interesting. I have noted, though, that this ‘recurring pattern’ seems to be one in which you find yourself in with many other people, not just me.

I have to say the last part was impressive though. You sound like the toughest economics lecturer in the Mid West!

207

J Thomas 10.15.08 at 1:55 am

You really don’t have any idea what the economic arguments for free trade are supposed to be, do you?

Lemuel, I guess I don’t. The argument I hear is that with free trade, everybody gets to use their comparative advantage and so there’s more stuff to go around than there would be if there were any restrictions on trade.

Since there’s more to go around, everybody who participates gets more (or else they wouldn’t bother to trade). Some might get more of the booty than others, but everybody does better than they would without free trade. Anybody who does better without trading can just refuse to make deals that leave him worse off. So he’s no worse off checking out the deals he’d get with imports and exports and choosing not to do them, than he’d be if he didn’t have that opportunity.

I’ve heard hints of an argument that any nation that imposes any kind of trade restrictions must inevitably hurt itself more than it hurts anybody else. I haven’t actually seen the details of such arguments but I tend to disbelieve them. I strongly suspect that arguments along those lines will involve narrow economic goals. Like, china might be considered worse off because for a long time now they have given us a lot of stuff in exchange for about half a trillion dollars worth of dollars that they’ll never get to spend, while a more equitable strategy would have resulted in them getting more stuff. To me that sort of argument is not compelling for nations that are quite willing to spend more than half a trillion dollars for wars.

If it was true that trade restrictions always hurt the nation that imposes them more than they hurt anybody else, then it would make sense never to retaliate for other nations’ trade restrictions. But when trade policy is an extension of war, such calculations inevitably break down. If it would cost a trillion dollars to damage a nation’s industrial capacity with conventional airstrikes, but you can get the same effect for only half a trillion dollars using foreign trade, why not do so?

The USA regularly uses trade sanctions to damage nations we consider our enemies — iraq, syria, iran, etc. If we thought that sanctions would hurt us more than it hurts them we wouldn’t do it.

208

engels 10.15.08 at 2:02 am

John Emerson, no, that’s not right, Delong labelled Grass ‘crypto-Nazi scum’ based on an anti-globalisation polemic he published in the New York Times long before the revelations about his service in the Waffen-SS so the latter had nothing to do with it.

209

notsneaky 10.15.08 at 2:20 am

Wow. Is that supposed to be some kind of thinly veiled “I know where you live” threat? You really are a first order creep.

210

engels 10.15.08 at 2:27 am

No, tough guy, it was a joke.

211

engels 10.15.08 at 2:57 am

To be completely clear: I have no desire to issue threats, veiled or otherwise, nor would any reasonable person interpret what I wrote that way, I think. I do have a desire to ridicule sad little junior academics who try to live out their red-bashing tough guy fantasies on the internet, and just end up coming off like Herbert Kornfeld.

212

lemuel pitkin 10.15.08 at 5:03 am

The complaint of people on the left is not that Delong ‘refuses to venerate’ people like Chomsky, Sweezy, Ralph Miliband, Gunter Grass and others, it is that he appears to be unable to deal with them in any kind of honest or rational way.

Case in point: his notorious post after Sweezy’s death, which he took as an occasion to announce that “I would like Paul Sweezy to be remembered” for “the horrible, unforgivable crime” of being a Communist.

213

notsneaky 10.15.08 at 5:17 am

““I would like Paul Sweezy to be remembered” for “the horrible, unforgivable crime” of being a Communist.”

Is that a direct quote?

http://www.j-bradford-delong.net/movable_type/2004_archives/000386.html

If not then you might want to … ah, whatever.

214

notsneaky 10.15.08 at 5:31 am

Hmmm, actually looking over those two of Brad’s post (other one is right before the one linked to above) on Paul Sweezy as a hack who changed his position so that it accorded with that of Stalin and the party line and who as late as 1999 took the position that it was necessary to defend Stalinism in Eastern Europe (this one’s below) even once all the bad stuff was well known, I got to concede that Daniel was actually right in that theory above. He just applied it to the wrong economist(s) for the wrong reasons.

http://delong.typepad.com/sdj/2007/10/monthly-review-.html

215

dsquared 10.15.08 at 6:42 am

You think Brad is a knee jerk free marketer

No I don’t, and for someone who is so effing hoity-toity about other people putting words in his mouth, you could stand to do it a little less yourself. I think he’s a perfectly reasonable economist, working within the constraints of the conventional wisdom of the American economics profession, of which he’s a part. You seem to be arguing either that the American economics profession doesn’t have any conventional wisdom, being the last refuge of pure disinterested truth-seekers, or that this conventional wisdom is “centre-left” and doesn’t involve any such thing as mindless or uncritical boosterism of Anglo-Saxon capitalism (a particular set of institutions occasionally referred to as “free markets” by people who don’t realise they’re cheerleading). You’ll forgive me for not taking either of these views seriously.

We can get onto the general subject of redbaiting (you’ll be surprised to know I’m against it) later.

216

notsneaky 10.15.08 at 7:38 am

Me, recently:”You think Brad is a knee jerk free marketer

You, recently: No I don’t,”

Daniel,
I said (a bit less recently):
“Would you say that Brad DeLong has made a career out of by being a knee-jerk free market proponent?”

and you said (a bit less recently):

“I don’t know what Brad did before he got a tenured position, but basically yes” as a direct response.

So ok, at best you think that he made his career by being a knee-jerk free market proponent, with that “I don’t know” caveat in there. Maybe I mis-characterized “made his career as” with “is”. Maybe I read too much into that “basically”. But come on! If you didn’t say it 100% you said it 90%. I think I still get to keep my hoity-toitiness.

And no, what I’m arguing is that the American economic profession is a distribution not a point, and that that distribution is centered around the center left and that “mindless or uncritical boosterism of Anglo-Saxon capitalism” (and if you prefer that terminology to ‘free market’ I don’t care a bit) is a much much much smaller part of it than you make it out to be and that most of it is not driven by any direct or indirect profit motive or toadiness, but yeah, by an uninterested seeking of truth. Now, maybe they’re seeking under the wrong lampposts but they are seeking it. And I offered concrete examples here – starting with the Nobel laureates themselves which you sought to dismiss because they’re chosen by the Swedes, and as the Krugman-Nobel-critics’ve informed us “they’re socialist over there” and based on some crazy notion that the people who get the most prestigious prize in the discipline “don’t really have much to do with setting the economic and institutional conditions” of the profession. Which was just a lazy assertion you pulled out of your ass and you know it.

As far as the red baiting goes, gimme a freakin’ break. You really think calling Chomsky and Sweezy ‘wacky’ qualifies?

Why do these ‘deja vu all over again’ discussions on the sociology of economics always happen when I got to stay up late working on stuff? If Emerson starts talking about the Tatars again I’ll be really freaked.

217

notsneaky 10.15.08 at 8:15 am

And since I’ve been cast in this evil free marketer asshole role, I might as well ask Emerson where he got this one from:

“As I said, discouraging his grad students from working in the area strikes me as telling.”

That’s not part of the Card interview where he talks about making people mad or any of that stuff. Is there another one?

218

Danny Yee 10.15.08 at 11:49 am

His body of literary work is really quite small, and although Fatelessness is brilliant, quite a number of people would find the themes better developed in (for instance) Primo Levi’s account.

Levi and Kertesz are rather different. But Primo Levi was dead when Kertesz won the Nobel, so their relative merits aren’t relevant to that.

Danny, enjoying the subversion of this thread.

219

martial 10.15.08 at 3:47 pm

J Thomas, there is an entire philosophy of action around the idea that one can declare peace unilaterally. Non-violent resistance has been extraordinarily successful – and far more widely than most people realize. It has been used successfully in many sitatutions that are not the Anglo-American ones that are generally held up as demonstrating that non-violence is somehow only possible under a unique Anglo-American sensibility in the ruling class.

Further, there are several cases of communities in war zones effectively opting out of the conflict and the fighters, for some reason, letting them. I’m working on a book on these communities right now and the implications are fascinating.

220

John Emerson 10.15.08 at 4:05 pm

I don’t find a reference to the grad students. Most of what I can retrieve is below, but IIRC this came up on a Crooked Timber thread and maybe it was there. It’s certainly plausible that if Card left the field himself, he warned his students away from it.

Klein on Card; Card Interview; Klein on Card and Katz

And that wasn’t at all the spirit of what we actually said. In fact, nowhere in the book or in other writing did I ever propose raising the minimum wage. I try to stay out of political arguments.

I think many people are concerned that much of the research they see is biased and has a specific agenda in mind. Some of that concern arises because of the open-ended nature of economic research. To get results, people often have to make assumptions or tweak the data a little bit here or there, and if somebody has an agenda, they can inevitably push the results in one direction or another. Given that, I think that people have a legitimate concern about researchers who are essentially conducting advocacy work. I try to stay away from advocacy of any kind, but that doesn’t prevent people from being suspicious that I have an agenda of some kind.

I’ve subsequently stayed away from the minimum wage literature for a number of reasons. First, it cost me a lot of friends. People that I had known for many years, for instance, some of the ones I met at my first job at the University of Chicago, became very angry or disappointed. They thought that in publishing our work we were being traitors to the cause of economics as a whole.

I also thought it was a good idea to move on and let others pursue the work in this area. You don’t want to get stuck in a position where you’re essentially defending your old research. I certainly think it’s possible that someone will come up with credible research documenting a situation where raising the minimum wage has a significant employment effect. I rather doubt we will see that right now because minimum wages are fairly low, at least in northern California where I live. My guess is that small raises in the minimum wage won’t have much of an effect.

Card left an area of research because people were angry at him for right wing political reasons, and it seems to bother him that some people use his research as part of their non-right-wing advocacy. He himself is purist, but there are hundreds of economists using economic data to oppose the minimum wage– it’s an industry. It would seem that Card would want his research to be introduced into that dialogue, but he doesn’t seem to.

This would be an example of self-censoring passive advocacy resulting from intimidation and/or opportunism. Card seems craven, and seems like a bad citizen to boot. This really isn’t about poor nice Card being treated mean; it’s about a distortion in the debate about the minimum wage, and the suppression of a line of research about the minimum wage. And the angry economists of whom Card spoke, apparently many of them, were to all appearances authoritarian, anti-science right-wing ideologues.

“Losing a lot of friends” is pretty strong words, and the fact that Card apparently isn’t indignant shouldn’t mean that we shouldn’t be. It means that one of the up and coming young economists of our time is a slavish lackey in a slavish system. A lot of others were treated worse; they are now called non-economists and barred from the debate.

221

John Emerson 10.15.08 at 4:13 pm

The below is all by Card. Fuck HTML.

And that wasn’t at all the spirit of what we actually said. In fact, nowhere in the book or in other writing did I ever propose raising the minimum wage. I try to stay out of political arguments.

I think many people are concerned that much of the research they see is biased and has a specific agenda in mind. Some of that concern arises because of the open-ended nature of economic research. To get results, people often have to make assumptions or tweak the data a little bit here or there, and if somebody has an agenda, they can inevitably push the results in one direction or another. Given that, I think that people have a legitimate concern about researchers who are essentially conducting advocacy work. I try to stay away from advocacy of any kind, but that doesn’t prevent people from being suspicious that I have an agenda of some kind.

I’ve subsequently stayed away from the minimum wage literature for a number of reasons. First, it cost me a lot of friends. People that I had known for many years, for instance, some of the ones I met at my first job at the University of Chicago, became very angry or disappointed. They thought that in publishing our work we were being traitors to the cause of economics as a whole.

I also thought it was a good idea to move on and let others pursue the work in this area. You don’t want to get stuck in a position where you’re essentially defending your old research. I certainly think it’s possible that someone will come up with credible research documenting a situation where raising the minimum wage has a significant employment effect. I rather doubt we will see that right now because minimum wages are fairly low, at least in northern California where I live. My guess is that small raises in the minimum wage won’t have much of an effect.

222

notsneaky 10.15.08 at 4:18 pm

That’s the same interview I was looking at. I was just wondering if I missed the ref to grad students.

223

geo 10.15.08 at 6:50 pm

Non-violent resistance … has been used successfully in many situations

Martial: where can I read more on this?

224

J Thomas 10.16.08 at 12:43 am

Martial, thank you.

The traditional method for declaring unilateral peace is unconditional surrender. Then whatever the enemy does to you after that is not war, it’s instead occupation or annexation etc. You have already agreed they can do whatever they want to you and your wife and daughters etc, and they choose what to do. The Geneva conventions claim to give you rights that you cannot give up, but that’s something the enemy gets to choose whether or not to follow.

The idea of achieving peace without victory is an important one. There are times when it can’t work and maybe times when nothing else would be better. If the japanese had tried to declare peace in early 1944, for example, the USA would probably not have accepted it. We were hot for unconditional surrender and we weren’t ready to accept less. Similarly, Saddam did his best to avoid war in 2003 and Bush absolutely refused to accept anything short of surrender — which never actually happened even after the war.

When you give your enemy no other choice than victory or unconditional surrender, he’s likely to fight as hard as he can and as long as he can. The possibility of an honorable peace will tend to sap his will to fight. But US leaders usually minimise that because it also saps our own will to fight.

At any rate, doesn’t the idea that governments should further free trade because it’s best for everybody seem hopelessly naive? Governments that tried to get what was best for everybody wouldn’t start wars, and wouldn’t prolong wars, and wouldn’t play “Let’s you and him fight”.

Free trade is better for everybody provided the comparative advantage metaphor applies in all cases. At this point is that more than a matter of faith? If it isn’t clear that free trade is best for everybody, and it is clear that often people don’t try to get what’s best for everybody, wouldn’t that leave the whole thing kind of up in the air?

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Walt 10.16.08 at 12:46 am

In so far as you believe the economic argument for free trade, it is critically different from armed conflict in one way: a country is better off even if it’s the only country that practices free trade.

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J Thomas 10.16.08 at 1:06 am

Walt, doesn’t that belief go far beyond the data?

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lemuel pitkin 10.16.08 at 3:13 am

In so far as you believe the economic argument for free trade, it is critically different from armed conflict in one way: a country is better off even if it’s the only country that practices free trade.

Right. This was the point I was hoping J Thomas would acknowledge. But it turns out were dealing with some other argument for free trade altogether.

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Colin Danby 10.16.08 at 3:43 am

Free trade is real simple: if I’m a consumer, my gov’t imposes no additional taxes or restrictions when I buy a good from a foreigner (as opposed to buying it domestically). So one nation can unilaterally declare free trade, as far as its citizens are concerned. The analogy with war is false.

As for arguments in favor, the basic one is also simple: freeing trade widens the choices of at least some domestic consumers. You can argue that there are other consequent bad effects that counteract these advantages so you shouldn’t do it, but the argument that there are positive-sum benefits all around is not implausible, and does not even require accepting the neoclassical framework.

Warfare by contrast is patently a negative-sum game, and most governments in most moments of history do *not* go to war.

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J Thomas 10.16.08 at 5:44 am

It’s somewhat plausible that a nation is better off not to interfere in free trade even when all other nations do so. Many people believe this on no particular evidence.

A strictly homologous argument would claim that a nation is better off not to do any military spending even while being invaded by a foreign nation, because all the resources they might spend on the military could then go to the civilian economy and the citizens would be better off than they would be with those resources sequestered by the government.

I say that interference in trade is inherently a negative-sum game, just as warfare is. (Not counting things like slowing the spread of invasive species into fragile ecologies, inhibiting diseases, etc.)

However, I would argue that government interference in trade is less negative than warfare. Suppose for example that the world economy would achieve some sort of perfection with unlimited free trade, but that instead a foreign nation subsidises their exports to us. This will tend to distort their economy and our economy. We will buy more of their subsidised goods than we would otherwise, and everything we make that depends on their goods will be artificially cheaper. The effects will ripple through our economy, and our own production will be distorted. It could be argued that we are better off because in subsidising their sales they are subsidising our consumption. I say it depends. If the malayan government offered you $500 to buy a malayan automobile instead of a japanese automobile, would you be suspicious? When you go fishing, you bait the hook so the fish will think you’re giving them something. If you chum the water you really are giving the fish something for nothing, but you intend to get more back. In war, would you simply count up the square miles of territory your side won versus the amount you lost to decide whether you were ahead? Doesn’t it make a difference which square miles are which?

If free trade gave us some sort of perfect economy, then if we imposed a tariff that was exactly equal to the foreign nation’s subsidy we would have the perfect economy minus the costs of implementing the subsidy and the tariff, and the foreign government would be giving money to our government. We would be making a profit off them, unlike the case in warfare where there’s no obvious way to profit from them bombing us.

In general, if you’re making a deal and you see somebody else try to manipulate the deal, should you go along on the assumption that anything he does will benefit you? Or should you carefully examine the specifics? When it looks like a con man is giving something away, simple accounting says to simply take it, that you’ll be better off. But he has a specific strategy for a specific result, and you need more than the iron laws of economics to protect you.

Whyever would anyone believe that blind market forces will outcompete a strategy that’s designed with those forces in mind? If someone else is willing to pay to change the groundrules of the game your companies compete at, isn’t there a chance that they see a way to profit at your expense by the change?

The argument that one nation should do nothing while other nations manipulate its markets is precisely analogous to the argument that one nation should do nothing while its neighbors build strong militaries. This military approach has repeated failed for belgium and tibet, but it has worked well for costa rica since 1949. It isn’t impossible for it to succeed, but arguments that it has to work are at best premature.

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Michael Greinecker 10.16.08 at 9:32 am

“With your frequently repeated offhand abuse of the ‘wacky left’, ‘commies’, etc and your seemingly unshakeable conviction that anyone who disagrees with you on a systemic level about the desirability of capitalism must just be an idiot you embarrass yourself in a similar way.”

As someone who gets along very well with Notsneaky and is way to the left of De Long and even Stiglitz, I have to disagree. Unless he thinks I´m an idiot of course… ;-)

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John Emerson 10.16.08 at 2:57 pm

I have to say the same thing as Greinecker. Some of the things Notsneaky says are annoying, but they’re just throwaway lines. He treats me more nicely than I treat him, so I could hardly call him a bad guy.

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engels 10.16.08 at 3:45 pm

“As someone who gets along very well with Notsneaky and is way to the left of De Long and even Stiglitz, I have to disagree [that incessant offhand red-baiting is objectionable],” says Michael “Supporting the Euston Manifesto” Greinecker.

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notsneaky 10.16.08 at 4:29 pm

Alright, let’s get this straight
-nowhere in this discussion did I call anybody an idiot. Emerson called ‘managers’ idiots. Daniel sort of suggested that economists working on Soc Sec were either idiots or hacks. But I didn’t even use the word anywhere. I did call sg a “twit” because he was very obviously trolling me (as you’re doing now) with the “given that you yourself are knee-jerk free market…” (as in “are you or have you ever been…”)
-neither did I use the word ‘commie’ or suggested there were any communists around in this discussion. I might’ve used that term before either in reference to people who self-identify as communists or as an obvious joke. I think I used it to refer to teachers who wouldn’t let their students out to recess or something.
-I did call Chomsky and Sweezy “wacky left” but if you’re gonna take that as “incessant offhand red-baiting” then, well, you’re wacked in the head. Maybe it’s more like wacky-baiting? Anyway this false accusation of “incessant red-baiting” by you – and more surprisingly by Daniel in 215 – is pure crap. In fact I’m used to your creepy little jerk antics but I expect better from Daniel.
-Your basic modus operandi which shows up on threat after threat on CT is to jump into a middle of some discussion you’re not a part of, insult people based on some dishonest characterization of their views, act indignant when called on it, and then turn up your aggro meter a few notches.
-and you really love putting words in other people’s mouths, as you did again in 232, just so you have something to insult them on.
Lame.

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notsneaky 10.16.08 at 4:29 pm

Bring freakin’ preview back please.

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engels 10.16.08 at 5:32 pm

Well, let’s look at this discussion, shall we? My first question to you (#194) was:

Where in Peddling Prosperity is Krugman supposed to have made the claim that no academic economists are ‘knee-jerk free marketeers’?

which I don’t think anyone would call an ‘insult’. The second comment (#200) was an objection to the following statement:

I think he’s center-left (as opposed to wacky left, of say, Chomsky and Sweezy whom he refuses to venerate sufficiently earning him the disapprobation of the rest of the wacky left).

which while I concede might have come across as ‘indignant’ or insulting doesn’t seem excessively so as a response to your own rather insulting characterisation of Chomsky and Sweezy (which, incidentally, also ‘put words into [the] mouth[s]‘ of their defenders by making the ridiculous suggestion that their complaint against Delong was that he ‘refuses to venerate’ such people).

My third was a suggestion (#201) that one might distinguish between someone like Delong and Krugman (in terms of their alleged tendencies to ‘knee-jerk’ free-marketeering) not on the basis of their opinions but of their approach to rational discussion.

While I wouldn’t make any great claims for the interest or originality of these points they were, in fact, substantive ones, I think. You simply ignored (1) and (3) and responded to (2) with a bizarrely abusive ad hominem rant.

And when I look back over past discussions we have had I see much the same thing.

As for ‘incessant red-baiting’, I could go back over the numerous comments you written in previous discussions here, similar in tone to your remarks about Chomsky and Sweezy above, labelling such people ‘wacky’, ‘crazy’, ‘goofy’, ‘wacked in the head’, ‘dishonest’, ‘commies’, ‘hippies’, and suchlike, but it hardly seems worth the effort as your response to me today serves as a perfectly adequate illustration by itself.

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Colin Danby 10.17.08 at 12:17 am

JThomas, I’m afraid I have to echo an earlier poster: you haven’t a clue how the arguments work. Learn them, and then you can make sensible criticisms.

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DRR 10.17.08 at 2:55 am

dsquared

In the sense that he’s always stuck to simple, comprehensible models, visibly in the Keynesian tradition, rather than sticking bits and pieces of mathematics together to backward-justify a conclusion already reached.

the whole point here is that professional economists “really believe things to be true” which visibly aren’t, because they are “bought and paid for”, and as a result they are prepared to make the most extraordinary compromises with respect to their scientific and intellectual standards when they’re writing things which might be thought to support the political views that underpin the profession.

This basically seems to boil down to “neoclassical economics” is bad because it’s practitioners aren’t always honest, sometimes structure the data to fit an already desired conclusion, and occasionally tip the scales in their desired outcome’s favor. In so much as this is true, how on earth is “mainstream” orthodox “neoclassical” economics different from any other school or heterodox branch of economics? My understanding of the subject is necessarily limited and perhaps I’m being too reactionary, but in my perousal of the writings and works of the economic practicioners on the side of the angels, of a variety of schools, I find no reason to trust their work anymore than I would someone at the Cato Institute much less the apparantly bought and paid for lap dogs for capital teaching at our nation’s universities. Are you saying it’s all due to the institutional effect of the “Consumers of Economics?” If so I think you may be overestimating how much money is in commissioned “Free Markets are teh awesome!” research but even accepting that, certainly there must be areas where it doesn’t exist or where the incentive structure is even in reverse? Two institutions that are broadly cited in American Democratic party politics in particular are the Economic Policy Institute and to a lesser extent the Center for Economic Policy Research. Two anti free market, anti laissez-faire pro labor anti liberalized trade economics oriented think tanks that are largely funded by liberal/left interest groups and labor unions. Now I know labor and workers are the good guys and I can’t talk about the institutional power of “big labor” without giggling to myself but why is research on the alleged suckiness of international trade carried out by a group that’s funded by the AFL-CIO any more trust-worthy; less hackish than research on the alleged awesomeness of international trade carried out by a group that’s funded by bond traders and former IMF flacks?

And for that matter how much less/more dishonest or ideologically tainted is mainstream economics than the other major social sciences? Conceivably, the sociology department gets it’s funding from the same sources as the economics department.

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notsneaky 10.17.08 at 3:00 am

CEPR, whatever its funding and ideology, is considered pretty mainstream for academic economists in the sense that a stint or affiliation at CEPR will enhance one’s academic reputation or at least not lower it as much as a stint or an affiliation at Cato would.

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J Thomas 10.17.08 at 3:44 am

Colin, would you suggest a link to the standard arguments for free trade?

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J Thomas 10.17.08 at 4:08 am

Wikipedia on “Free trade” gives basicly what I said, comparative advantage, intervention has costs, intervention distorts economies.

It gives no hint at other arguments, perhaps you would revise the Wikipedia article to show the real arguments?

The principled alternative, mercantilism, was supported by a variety of people such as Alexander Hamilton. It is currently out of favor in the USA except for our military, who have preferred not to outsource work involving classified technology after they found japanese companies selling their secrets to the USSR. Hamilton attempted to protect US industry, opposing Adam Smith’s advice that the USA should focus on what we were good at — agriculture.

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DRR 10.17.08 at 4:13 am

It is a fact, though, first hand from Card, that he believes that doing work on the minimum wage is detrimental to one’s career as an economist.

Is ther an actual documented source where he says this explicitly? because I would like to read it.

First off I agree that this was a truly scandalous affair and shows how ideologically warped economics, or any social science can be, but people who bring up this story as a textbook (no pun) example of the supposedly perverse ideology within economics are stretching the incident & exploiting it for their own agendas. Nowhere, at least that I can find, where David Card says doing work on the minimum wage is detrimental to one’s career as an economist. If that were true, the dozens of economists who have since done empirical work on the real world effect of minimum wages in various industries and markets would be relegated to the <Quartlerly studies in southwestern state political economy rather than say, the quarterly journal of economics.

David Card did say his research cost him friends, primarily at his old haunts The University of Chicago, the most famously ideologically rigid econ department, but the idea that he was shunned or blacklisted by the entire econ world is a fiction. Moreover, for everyone waving the bloody shirt of Card in their own grudges against mainstream economics, they rarely mention how Card himself felt about the affair;

According to David Card in his own words;

I think economists who objected to our work were upset by the thought that we were giving free rein to people who wanted to set wages everywhere at any possible level. And that wasn’t at all the spirit of what we actually said. In fact, nowhere in the book or in other writing did I ever propose raising the minimum wage. I try to stay out of political arguments.

I think many people are concerned that much of the research they see is biased and has a specific agenda in mind. Some of that concern arises because of the open-ended nature of economic research. To get results, people often have to make assumptions or tweak the data a little bit here or there, and if somebody has an agenda, they can inevitably push the results in one direction or another. Given that, I think that people have a legitimate concern about researchers who are essentially conducting advocacy work.

So basically he was suspected by his fellow economists of unscientific advocacy work, not totally unjustly according to the man himself and for the more ideologically inclined Chicago Boyz, he had indeed comitted a grave sin. But many more economists saw the value in his work and of course as notsneaky pointed out, it was on the basis of this very work that Card was awarded the John Bates Clark Medal, arguably the most prestigious prize in American Economics. Pretty generous for a bunch of reactionaries who allegedly blacklisted him. I wonder if that award will be contributive, or detrimental to his career.

dsquared

I don’t know what Brad did before he got a tenured position, but basically yes, unless you’re going to define “free market” in some utterly tendentious fashion. I’ve had about a thousand arguments with him about the Washington consensus. Brad certainly does define the very leftmost possible acceptable opinion for an economist to hold as being his own, and that’s a problem (PS you really are kidding yourself if you think Stiglitz holds a materially different view of the world from Brad’s).

Since Stiglitz wrote an entire book repudiating Brad DeLong’s view of the world (at least as it relates to International Economics) I’m not so sure. I have to say that when I hear the term “knee-jerk Free-Marketeer” Brad DeLong is not the first name that springs to mind. Especially not Stiglitz, who’s most famous body of work is establishing how inefficient markets really are. Are you really saying there’s no meaningful difference in the economics and view of markets between Brad DeLong and say Milton Friedman?, Gary Becker? That Stiglitz has more in common with these people than say, with Barkley Rosser? In this case I would like to see how you define “free market”

It is a fact, though, first hand from Card, that he believes that doing work on the minimum wage is detrimental to one’s career as an economist.

I think you are stretching it on this. First off I agree that this was a truly scandalous affair and shows how ideologically warped economics, or any social science can be, but people who rehash this story as a textbook (no pun) example of what’s wrong with economics are exploiting it for their own agendas. Nowhere, at least that I can find, where David Card says doing work on the minimum wage is detrimental to one’s career as an economist. If that were true, the dozens of economists who have since done empirical work on the real world effect of minimum wages in various industries and markets would be relegated to the <Quartlerly stufies in southwestern state political economy rather than say, the quarterly journal of economics.

David Card did say his research cost him a lot of friends, primarily at his old haunts The University of Chicago, the most famously ideologically rigid econ department, but the idea that he was shunned or blacklisted by the entire econ world is a fiction. Moreover, for all

He said it cost him a lot of friends from economics and was pushing an agenda. Clearly evidence that all is not right within the confines of econ land. It’s inexcusable, but as notsneaky pointed out, he was awarded the John Bates Clark Medal for the very minimum wage work being discussed

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DRR 10.17.08 at 4:16 am

My previous entry was unfortunately unedited. Moderator(s) feel free to delete the last 4 paragraphs.

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notsneaky 10.17.08 at 4:24 am

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DRR 10.17.08 at 4:25 am

notsneaky,

We’re probably referring to two different organizations. I’m talking about the organization based in Washington DC “The Center for Economic & Policy Research” not the London outfit.

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J Thomas 10.17.08 at 5:34 am

Notsneaky, was your comparative advantage link directed at me?

I have explicitly acknowledged the comparative advantage metaphor and the possibility that there might be ways to apply it to real economies.

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Michael Greinecker 10.17.08 at 9:50 am

“says Michael “Supporting the Euston Manifesto” Greinecker.”

That puts me in the company of people like Michael Walzer. Who is of. course a total rightwing chickenhawk.\irony

What part of the manifesto do you disagree with?

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dsquared 10.17.08 at 10:02 am

Radek: my comment in 215 was occasioned by your endorsement of Brad’s Sweezy obituary, which was redbaiting if anything ever was.

DS:

In so much as this is true, how on earth is “mainstream” orthodox “neoclassical” economics different from any other school or heterodox branch of economics?

It isn’t. There are hacks of all colours, and obviously it’s better to be a hack in the service of sensible social democratic politics than either the Washington Consensus or Stalinism. But also, it’s important to recognise and honour the people who aren’t hacks, like Krugman (usually) and who say true things that are inconvenient.

Are you really saying there’s no meaningful difference in the economics and view of markets between Brad DeLong and say Milton Friedman?

I don’t think I actually said that, but B-Del has certainly written lots of encomia to Milton Friedman – I’ve written a couple of blog posts on the general subject of the extent to which Brad in particular and economists in general extend far more benefit of the doubt to Friedman than they should.

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John Emerson 10.17.08 at 6:13 pm

Exploiting it for their own agendas

Welcome to the real world, dude. Economists never do that, ever, so when I do it I’m bringing evil into the garden of Eden. Seriously, I’m really just trying to shake economists out of their unrealistic idealism and innocence. They’re so pure of heart it’s scary.

Because certainly, absolutely, beyond all shadow if a doubt no economist ever tweaked the evidence to make an anti-minimum-wage argument. That just never would happen. It’s really a blessing that the economics profession is so vigilant about expunging advocacy from their profession.

The victim, as I said, was not Card. Card moved on to other things and did fine. The victim is the general public, especially everyone negatively affected by the distortion of the dialogue on the minimum wage.

In discussions of this type I’m always told that there’s some person somewhere who’s doing the right thing. As I’ve said, I object to the idea that if a profession has the right answer in there somewhere, it’s OK that it has a lot of wrong answers too.

If I want an opinion on a question about physics, I don’t really have to shop around. A good physicist will be able tell me whether there’s an answer to my question, and if there is an answer, he can tell me what it is.

Economics isn’t like that. And for that reason, the claim that economics is a True Science (e.g. Lazear) is just wrong. Economists are talented, knowledgeable, skilled advocates, and at critical moments you really need a good one on your side, but they’re not scientists the way physicists are.

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John Emerson 10.17.08 at 6:23 pm

And I might point out that in 220 and 221 I cited exactly the statement by Card you claimed that we “rarely mention”. I even bolded the key points in 220.

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J Thomas 10.18.08 at 2:35 pm

If I want an opinion on a question about physics, I don’t really have to shop around. A good physicist will be able tell me whether there’s an answer to my question, and if there is an answer, he can tell me what it is.

Economics isn’t like that. And for that reason, the claim that economics is a True Science (e.g. Lazear) is just wrong. Economists are talented, knowledgeable, skilled advocates, and at critical moments you really need a good one on your side, but they’re not scientists the way physicists are.

We have an example of economics being like that in this very thread. If you ask an economist whether free trade is always good, the answer is yes. Free trade is always better than any government regulation of trade. Further, it is known that even when a foreign government regulates their nation’s trade with us, we are still always better off if our own government does no regulation.

If you shop around long enough you can find economists such as Herman Daly who disagree. But there’s a broad consensus, to the point that most commenters on economics blogs are completely unwilling to question the idea.

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