“It’s a total surprise”

Well done Paul!

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

The comment thread over at Marginal Revolution is fucking hilarious.

@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.

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).

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.

“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.

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.

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.

Kiernan,

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

Anon

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.

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).

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!

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

”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?

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.

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.

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.

#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?

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.

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?

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

We regret the error.

“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.

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.

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.

“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.

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).

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?

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

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”?

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.

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.

“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.

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.

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.

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”.

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.

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.

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.

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.

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?

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.

> 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

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.

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”.

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.

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.

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.

“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.

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.

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.

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.

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?

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).

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

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.

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.

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?

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.

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.

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.

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

(weeps)

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.

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.

Ajay, did I get that wrong?

Can one nation unilaterally declare peace or free trade?

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.

“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.

132: yes. And yes.

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?

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.

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.

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

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?

Don’t answer that.

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.

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.”

“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.

No, not really at all.

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.

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.

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.

“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).

“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.

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

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

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.

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
?

“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.

why not?

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?

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.

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

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?

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.

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…

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).

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’?

“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….

J thomas-

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

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.

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.

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 RoundUpâ„¢ ready? And obviously the “friendship based on trade” established by Great White Fleet all about folks being mean to us.

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!

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.

No, tough guy, it was a joke.

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.

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

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.

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.

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.

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

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?

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

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.

“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… ;-)

“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.

Bring freakin’ preview back please.

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.

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.

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.

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

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.

“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?

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.

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.