Err, yes, this is Deirdre McCloskey\’s point

Greed, avarice, and envy were among the deadly sins. Usury … was an offense against God. It was only in the eighteenth century that greed became morally respectable.

Quite.

It\’s exactly at the point that what were formerly thought to be sins became regarded as the bourgeois virtues that we started to have sustained economic growth.

But M\’Lord Skidelsky wishes to decry this rather than celebrate it. Which is why he is a historian and biographer, not economist.

52 thoughts on “Err, yes, this is Deirdre McCloskey\’s point”

  1. I met that Skidelsky once. Odd fish; his idea of conversation was to pump me for everything I knew about Keynes. I was born after his death, for heaven’s sake.

  2. I think his point was that this doesn’t actually make them good things in and of themselves.

    Or are you saying that economists should be professionally incapable of distinguishing ends from means?

  3. Tim – I think you and Skidelsky are arguing with differing concepts of “greed”. He seems to take a very Old Testament view of these things (ironically given that the concept of the Deadly Sins is a Christian one – and yes, it actually is ironical in this case). If I read you aright (and given your reference to McCloskey in the headline), you’re talking about greed that, deriving from self-interest, leads to non-coercive, mutually rewarding free trade.

    Pete: Tim is big enough to argue his point for himself, but I would guess from the McCloskey reference he may have been thinking of this http://www.deirdremccloskey.com/docs/pdf/Article_255.pdf.

    What is interesting about that essay is that McCloskey references Adam Smith’s The Theory of Moral Sentiments, which as Eamonn Butler among others argues really should be read alongside The Wealth of Nations. Since it doesn’t seem to be about economics, most economists totally ignore it, if they bother reading Adam Smith at all. So they miss an important part of what Smith was all about.

  4. @ morpork

    Cheers for the article.

    I think Skidelsky’s actually channelling Keynes:
    http://www.econ.yale.edu/smith/econ116a/keynes1.pdf

    In particular this bit:
    “When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues.”

  5. Pete, what does make anything a good thing in and of itself?
    This has been the problem philosophy has been grappling with for at least two thousand years now, and as far as I know the conclusion they’ve come to is that ‘You can’t get an “is” statement from an “ought” statement.’

    So economists have gone on with the job of analysing the allocation of scarce resources without having had any firm idea of what ends those resources should be allocated to. But it turns out you can say a number of interesting things about the allocation of scarce resources while taking everyone’s final ends as just given. The goal is to figure out how to shape the world in various ways to achieve ends as they come along, or to figure out those times when the world can’t be changed to meet a desired end. (like physics could perhaps tell us if faster-than-light communication is doable, but it can’t tell us if faster-than-light communication should be done).

    As for being professionally incapable of distinguishing ends from means, well one way to do that is to look at changes in incentives around ends and means. I read a fascinating economics article a few years ago trying to figure out why a certain group of very Orthodox Jews in Israel had their men study religious texts until their late-thirties, at a high cost of income, while in New York in their fellow sect men only studied the religious texts a couple of years. The conclusion the economist came to was that the studying was a signal of commitment to the group, bringing various benefits, but in Israel being a religious student got you exempt from military service, so to prove that you were committed to your religious group you had to signal that you weren’t just studying for the exemption, leading to studying past the point. That analysis implied that the length of religious study was a means, not an end. (Of course, economics being a science, his analysis might be wrong).

    That said, economists do tend to be neutral about whether something someone does is an ends or a means, because people can be so varied, so it’s a bit dangerous to build anything on the basis that something is an end, or is a means.

  6. Morpork, I’ve read both The Theory of Moral Sentiments and The Wealth of Nations. I think that both are good reads, and I agree that if you don’t read one of them you are missing out on something, but I don’t see any reason why those two books in particular should be read together.

    After all, the study of economics is not the study of Adam Smith. While Adam Smith said a lot of things about economics I think most economists would agree with, he’s not the font of all knowledge. And more time spent studying him means less time spent studying something else.
    What do you think is the case for reading them both together?

  7. I should say that macroeconomics is more specific about ends – how to tame the business cycle. And environmental economics also tends to be more at the settled ends of things, though there’s a chunk of it aimed at trying to estimate how much people really value certain ends.

  8. Don’t know as I understand what you’re sayin’, Tracy W, about being “more specific about ends.”

    Up to now, whenever I’ve heard a “how,” it was an inquiry or discussion of “means,” rather than ends (except when uttered by an American Indian, in which case it’s a greeting of sorts.

  9. Tracy W – “I should say that macroeconomics is more specific about ends – how to tame the business cycle. And environmental economics also tends to be more at the settled ends of things, though there’s a chunk of it aimed at trying to estimate how much people really value certain ends.”

    I can make no sense of what you have said.

  10. Morpork, sorry I was thinking about Pete’s question about economists being unable to distinguish means from ends.

    I’m still curious as to why you think that The Theory of Moral Sentiments and The Wealth of Nations should be read together.

    Gene Berman – I meant that macroeconomics theory tends to be done with a specific end in mind – that end being avoiding recessions.

  11. Hi Tracy:

    You raise a good question. The reason why I think the two Smith books need to be read together is, in my my mind at least simple: The Wealth of Nations raises an obvious question. If the baker, butcher or candlestick-maker could screw the hell out the consumer, just take the money and run?

    Well, we know some bakers, butchers and candlestick-makers do just that, but what Smith was looking at was why most don’t. The Theory of Moral Sentiments is his explanation of why that should be. Smith was, after all, a philosopher – “economics” as either an art or a science had not been invented at the time. And in keeping with his time, he was very much descriptivist: i.e. an observer, who tried to make sense of human behaviour as he saw it.

    Well, fine and dandy, you might say. What’s that got to do with The Wealth of Nations? This: the philosophical ideas Smith distilled into Moral Sentiments fed directly into Wealth of Nations. Why should non-coercive mutually beneficial trade be better than trade which benefits just one party? Why should we care that we screw the other party? Smith’s answer is “sympathy”: what Eamonn Butler says we would now call “empathy”.

    Well, The Theory of Moral Sentiments is Smith’s attempt to answer those sort of questions (it should be noted that he wrote this before he wrote The Wealth of Nations).He doesn’t explain where these feelings come from: as I say, he was more an observer and describer, than a theologian. But I would note that his thoughts of what was good and what was bad were very much rooted in the Christian-Judeo thinking of that time, and indeed this time.

    Which brings us back to Tim’s original posting. Greed, avarice, envy…Now why do we think they are bad? Well, as I mentioned in my original post, it depends on what you mean. No, that’s not some relativist cop-out: “greed” can mean everything from merely wanting more income (whether money, credit, corn or – important this, I think – prestige) to better your life and those of your loved ones, and Scrooge McDuck-type avarice which sees the rolling in quackloads of banknotes as its own end. Self-interest incorporates greed, for sure, but not all greed incorporates self-interest, though it might seem to at first. Just ask Midas.

  12. morpork – I had learnt a fair chunk of economics before reading The Wealth of Nations, so the question of why most baker, butchers and candlestick makers don’t take the money and run didn’t arise for me – because there’s the possibility of trade with you tomorrow, and the day after that, and the day after that, and so it’s more profitable in the long-run to be honest in stable situations.

    The lack of this long-run incentive to be honest is why tourists are so often the victims of scams (and why some countries have specialised tourist police, to try to protect the overall income stream from tourists).

    So you don’t need sympathy to discourage you from screwing the other party, just a reason to care about your reputation.

    As most economists know the importance of reputation effects and repeated games, I don’t think they need to read Moral Sentiments alongside The Wealth of Nations for the reason you give.

    And, out of curiousity, can you quote the bit in Moral Sentiments where Adam Smith answers your question in that way, or at least tell me the chapter? I’ve read the book and I can’t recall him addressing the question you raised.

    I agree with you that whether or not greed, avarice, envy are bad turn in part on the definition behind them (though the Midas story to me always had the aseop “be careful what you wish for”).

  13. @ Tracy W

    A few things:

    1) I’m sure Morpork can defend himself here, but the way I took his point about Moral Sentiments and The Wealth of Nations is pretty much the McCloskey idea that Tim was getting at in the title post. To over-simplify horribly: in order to get a working economy, you need people who are less interested in pursuing their status through zero-or-negative sum battles over honour than in accumulating wealth through positive sum co-operative systems.. When economists use the phrase “self-interest” (at least when they’re not doing cute little Freakonomics-style case studies about violence and crime) they’re talking about an idea that only really came into its own in the 16th and 17th centuries. The thought that the merchant classes were not just nasty little money-grubbers for the aristocracy to tax, but were actually engaged in pursuing their own sort of ethical system, and that this could serve as a model for society more generally, was, if you believe McCloskey, one of the key things that kicked off economic growth.

    2) There’s a big debate to be had about whether or not economics is a science which McCloskey’s got some thoughts on – http://www.prickly-paradigm.com/paradigm4.pdf – but that’s beside the point.

    All I trying to say was that, whilst economists might appreciate that self-interested behaviour leads to growth overall, it seems strange to suggest that you can’t be an economist without explicitly accepting that greed is a moral good.

  14. “it seems strange to suggest that you can’t be an economist without explicitly accepting that greed is a moral good.”

    Put it that way, it is strange. On the other hand, it would be rather tough to be an economist while thinking that ursury is an offence against God, a bit like being a biologist while disbelieving in evolution.

    “There’s a big debate to be had about whether or not economics is a science”

    Great, let’s get started. Economic theories can be disproved. See for example, the Philips Curve, or the idea that a planned economy can easily avoid all the waste in the production of goods that a market economy generates have been disproved. So economics is a science. A bloody difficult science, for example while the idea that a planned economy can easily avoid all the waste of a market economy has been disproved, it’s possible that there may be way of doing a planned economy that is more efficient at producing goods than a market economy. Perhaps the Philips Curve applies now, even if it doesn’t apply in general. And so forth. Plus we have a limited ability to do controlled experiments in economics, making disproving very hard. But economics is a science, unlike say poetry, or mathematics.

    McCloskey’s arguments are about the use of pure theoretical thinking and the treatment of statistical significance, but some of this pure theoretical thinking is important. For example, Coase’s theorem transformed how economists regard pollution problems (yes, yes, I know about the transaction cost problem). She mentions Samuelson’s showing in the 1940s that “factor prices” are equalized by trade in steel and wheat, as a qualitative theorem, and then after that Samuelson showed that under alternative assumptions you can get very different conclusions. But this is valuable thinking work for a scientific end, if we know what the conditions are under which assumptions, we can check to see how the assumptions match the real world.
    .
    McCloskey’s other argument is that the treatment of statistical significance by economists is bad, that economists should be considering how much a number matters. Which may be so. But, say a study predicts that x causes y, but a good empirical study finds a relationship that could well be explained by chance, then that’s a reason to reduce your Bayesian-inspired probability that x causes y, even if you think that “x causing y” really really matters. Enough empirical studies failing to find a significant relationship, you should switch over to “there’s a less than 50 percent chance that this one is right”. All she’s calling for is, rather than looking for the stars on the statistical software, economists should spend some time coming up with a defensible cut-off point of their own.

  15. “On the other hand, it would be rather tough to be an economist while thinking that ursury is an offence against God, a bit like being a biologist while disbelieving in evolution.”

    I’m not sure I buy that analogy – seems to me you’re violating your own distinction between “is” statements and “ought” statements. Evolution is an actual theory, whereas the moral status of usury is more of a value judgement.

    This isn’t really reassuring me about my concern that when economists start shouting about how they’re objective and don’t make value judgements, it’s because they don’t want to discuss the value judgements they’re making.

    “McCloskey’s arguments are about the use of pure theoretical thinking and the treatment of statistical significance, but some of this pure theoretical thinking is important. For example, Coase’s theorem transformed how economists regard pollution problems (yes, yes, I know about the transaction cost problem). She mentions Samuelson’s showing in the 1940s that “factor prices” are equalized by trade in steel and wheat, as a qualitative theorem, and then after that Samuelson showed that under alternative assumptions you can get very different conclusions. But this is valuable thinking work for a scientific end, if we know what the conditions are under which assumptions, we can check to see how the assumptions match the real world.”

    This would be great if there were more people doing the checking against the real world. Her criticism was that no-one bothers to do fieldwork in economics (she cites Coase as an exception). I think there’s still a general worry that economics as a subject is too weighted towards abstraction, with actual empirical investigation confined to sub-disciplines and minor journals. There is clearly something badly messed up about that.

    It’s not that deduction’s a bad thing in itself, but if you’re doing it to the exclusion of everything else, then you’re engaged in scholasticism, not science.

    “Economic theories can be disproved. See for example, the Philips Curve, or the idea that a planned economy can easily avoid all the waste in the production of goods that a market economy generates have been disproved. So economics is a science. A bloody difficult science, for example while the idea that a planned economy can easily avoid all the waste of a market economy has been disproved, it’s possible that there may be way of doing a planned economy that is more efficient at producing goods than a market economy. Perhaps the Philips Curve applies now, even if it doesn’t apply in general. And so forth. Plus we have a limited ability to do controlled experiments in economics, making disproving very hard. But economics is a science, unlike say poetry, or mathematics.”

    Look, I’ll give you that economics does make predictions that are, in principle, falsifiable. It can make it over that bar, but so can every other cargo cult science out there. And it’s great to admit that it’s difficult to do experiments in economics. But in that case you’d expect economists to be a little more modest about what they’ve actually proved, admit that there may be some doubt about the significance of the effects they’re identifying.

    Finally, quick apology if this sounded overly aggressive. I’m not actually meaning to come off quite as anti-economics as I probably just did. A lot of anti-economics rants end up turning into arguments against abstractions and models in general. I’ll freely concede that that’s silly.

  16. This is rather long, so I’m going to break it up into two bits. The “is”, “ought” distinction, and the empirical basis.

    seems to me you’re violating your own distinction between “is” statements and “ought” statements.

    Hmm, can you explain this violation a bit further? As far as I know, what I have said about “is” and “ought” statements is that:
    1) Philosophers have failed to come to a conclusion about what is a good thing in and of itself.
    2) Economists don’t have a firm idea about what ends economic resources should be allocated to.
    3) However, you can say some interesting things about resource allocation without having to get into arguments about ends.
    4) Economists can sometimes distinguish between ends and means, although this is empirical work so it’s always subject to the risk of disproof (so if an economist thinks something is a means, not an end, this is with a deeper level of uncertainty than say a mathematician thinks there is no largest prime).

    I don’t think I said that economists never had an opinion about ends, and I listed two branches of economics where the ends tend to be more given.

    …whereas the moral status of usury is more of a value judgement

    But, unless you start off with the position that “ursury is just wrong”, it’s a stupid value judgement. Most arguments that ursury is wrong are based on the idea that “usury creates excess profit and grain without labour”, or that ” the natural essence of money was as a measure of value or intermediary in exchange” and lending for moeny violated this essence.

    This isn’t really reassuring me about my concern that when economists start shouting about how they’re objective and don’t make value judgements, it’s because they don’t want to discuss the value judgements they’re making.

    That’s good, because I think you should remain on the outlook for such value judgments. I am sorry that anything I wrote came across indicating the other view point. Please, keep being on the lookout.

  17. Her criticism was that no-one bothers to do fieldwork in economics (she cites Coase as an exception).

    A rather weird statement, given how much time McCloskey is critising empirical economists for incorrectly handling statistical signifiance. If no one is doing fieldwork, then how can they be mishandling statistical significance.

    Well, leaving that aside, I suppose she’s attempting to prove her hypothesis by not doing the field work herself. Such as, for example, reading econoimcs journals to check. I’ve just picked up the first copy of The Economic Journal that came to hand on my desk, Vol 120, no 548. Table of contents:
    1. Cognitive Function, Financial Literacy and Financial Outcomes at Older Ages: Introduction – summary of existing research. Not empirical in and of itself, but then it’s an introduction.
    2. Financial Decision Making and Cognition in a Family Context – reports on an empirical study.
    3. Cognitive Function, Numeracy and Retirement Saving Trajectories – reports on an empirical analysis of a relevant data set
    4. The Role of Early-Life Conditions in the Cognitive Decline due to Adverse Events Later in Life – empirical analysis of a relevant data set.
    5. Economic Literacy: An International Comparison – analysis of PISA test scores, etc.
    6. Active Labour Market Policy Evaluations: A Meta-Analysis – looks at 199 programe impacts from 97 studies.
    7. The Role of Private Finance in Paying for Long Term Care – forward looking analysis of goverment proposals, on the appplied end of economics, rather than scientific.
    8. The Race Between Education and Technology. A book review

    So out of 8 articles, 5 are empirical.

    You can check this here at http://www.res.org.uk/economic/ejtoc.asp?ref=0013-0133&vid=120&iid=548&oc=0

    I’ve been told numerous times that economists don’t do field work. Each time I pick up the first economic journal that comes to hand and it’s full of empirical work.

    Another piece of evidence that if McCloskey thinks that no-one bothers to do fieldwork in economics then she’s wrong is to look at the list of winners of the Nobel prize in economics.. Simon Kuznets – “empirically founded interpretation”, Friedman “for his achievements in the fields of consumption analysis, monetary history …”,
    Stone: “greatly improved the basis for empirical economic analysis”
    Fogel: “for having renewed research in economic history”
    Heckman: “for his development of theory and methods for analysing slective samples”
    Smith: “for having established laboratory experiemtns as a tool in empirical economic analysis”
    Engle and Granger “for methods of analysising economic time series”
    Ostrom and Williamson “analysis of economic governance”

    And these are only the people whose prize cites say that their work was for empirical purposes.

    I think there’s still a general worry that economics as a subject is too weighted towards abstraction

    I think you’re right about this. But I think to some extent it’s unavoidable. There’s no way of telling what the right weighting is towards abstractions versus empirical, so anyone who consciously or subconsciously wants a reason to dismiss economics can worry that it’s too weighted towards abstraction. Even if 99% of economics articles were entirely empirically based, one could still worry about it being too weighted towards abstraction.

    It can make it over that bar, but so can every other cargo cult science out there.

    Can you expand this comparison a bit more? How do you know that every cargo cult science can make it over the bar? And, well, what’s the point of this comparison, given that every actual science can make it over that bar.

    But in that case you’d expect economists to be a little more modest about what they’ve actually proved, admit that there may be some doubt about the significance of the effects they’re identifying.

    Um, a correction here. *Pete* might expect that, but Tracy W doesn’t. I’ve lived around humans for the whole of my life. In my experience over-confidence bias is a general problem amongst homo sapiens sapiens. I’ve seen it in economists, in lawyers, in politicians, in salespeople, in three year-olds, in parents, in journalists, etc, etc. I hope for more modesty, but given my struggles with my own pride, I definitely don’t expect it in other people.

  18. I’ve lived around humans for the whole of my life. In my experience over-confidence bias is a general problem amongst homo sapiens sapiens. I’ve seen it in economists, in lawyers, in politicians, in salespeople, in three year-olds, in parents, in journalists, etc, etc.

    But that’s exactly the point that Feynman was making about “cargo cult” science. Anyone can make falsifiable predictions, the way we tell the difference between a hard science and a soft science is that hard science goes about answering the questions more honestly:

    “But there is one feature I notice that is generally missing in cargo cult science. That is the idea that we all hope you have learned in studying science in school–we never explicitly say what this is, but just hope that you catch on by all the examples of scientific investigation. It is interesting, therefore, to bring it out now and speak of it explicitly. It’s a kind of scientific integrity, a principle of scientific thought that corresponds to a kind of utter honesty–a kind of leaning over backwards. For example, if you’re doing an experiment, you should report everything that you think might make it invalid–not only what you think is right about it: other causes that could possibly explain your results; and things you thought of that you’ve eliminated by some other experiment, and how they worked–to make sure the other fellow can tell they have been eliminated.”

    http://www.lhup.edu/~DSIMANEK/cargocul.htm

    I’m willing to grant that that’s actually a very exacting test, and that a lot of what we usually call “proper” science doesn’t meet that standard.

    But I think there are actually fairly obvious reasons why economics is going to find it harder than most to achieve that sort of saintly level of discipline. Everyone has an axe to grind in economic questions, because every question in economics is directly concerned with who gets what. This isn’t to say that there aren’t a lot of smart folk out there who are earnestly interested in pursuing answers to economic questions in a disinterested fashion.

    On the empirical thing – you’d know better than me. I might look at about two economics articles a month, so most of my information’s second-hand.

  19. Pete: On the empirical thing – you’d know better than me. I might look at about two economics articles a month, so most of my information’s second-hand.

    Aaarrgghhh! I dig out papers and go through them! I provide you with links! You don’t need to defer to my knowledge, I’ve laid it out there for you! All you have to do is to click on those links and check out the truth of what I’m saying! You thought it was worthwhile spending the time repeating those tired old-tropes about economics not being empirical, and yet you can’t be stuffed reading a few web pages to bring yourself up to speed! You just blow me off with a “you’d know better than me”, I don’t want to know better than you, I want you to try and destroy my argument as best you can because that’s the only way I know of to test how good my argument is.

    And yet you wander around implying that the soft sciences are a cargo cult, and that its practitioners should be more modest! While refusing to take the most basic efforts to learn something yourself and making up stuff about how “we” tell a hard science from a soft science, without even considering that I might have a very different opinion to you.

    And also you don’t bother even answering my questions about why you introduced the cargo cult comparison. What was the point of telling it to me? What on earth to you is the point of even having a debate?

  20. Calm yourself. I read the links, but obviously to know whether you’re cherry picking the links or not, I’m going to need to read a lot more than just those links. I’m working on it!

    It’s not like there’s a lack of substantive reply there – I thought I was explaining the cargo cult comparison with the Feynman reference quote. Anyway, sorry if this is garbled but I’m juggling a fair few things at once at this end.. Promise I’ll reply more substantively later.

  21. OK, briefly:

    1) I think a lot of McCloskey’s worries about the lack of empirical work in economics are covered in the paper, but I don’t think she’s denying that it takes place. As you say, this would be odd, given her worries about the abuse of statistics. The point I took was that there’s a disconnect between the two – think it’s on about 47-9.

    2) Cargo cults: quick recap.
    i)I say, if economists acknowledge that there are so many methodological problems with most of their testing that their results are really very uncertain, you’d expect them to acknowledge that.

    iii) You say, you might, you naive young fellow, but I would never expect such a thing. Overconfidence bias infects everything, and so economists are never going to be cautious about the significance of the effects they find.

    iii) I don’t want this to turn into a game of “no, you didn’t do the reading!”, but did you actually follow the link? Because I’m pretty sure I did send you a link from to the Richard Feynman article about cargo cult sciences in which he says that the way to tell a cargo cult science from an actual science is that actual sciences engage in precisely that sort of modesty. Now you might think that Feynman’s expectations are unrealistic, and that’s fine. But since the man invented the phrase, and you don’t want to challenge the idea that economists are only very rarely modest about what they’ve proved, I don’t see the problem you’re having with me using it.

    More later, probably.

  22. Sorry to come across as frustrated, but it’s jolly tiresome to be there, putting out arguments in detail, and then to get a null-response. You should of course check my work to see that I haven’t cherry-picked. I’m glad you are taking it on board.

    As for trying to explain why you made your reference to cargo science, you didn’t explain it. You started talking about the distinction between a hard science and a soft science, which isn’t my distinction, the distinction I make between hard and soft sciences is that in a hard science it’s typically easier to do controlled experiments.
    And, if we do use your definition, then physics isn’t a hard science, as Feynman gives in his essay two examples of physicists failing this – measurements of the charge of the electron after Millikan, and experiments on the National Accelerator.
    And if physics isn’t a hard science, what is?

    I agree that economics as a social science is more open to bias than some non-experimental sciences like paleobiology, because of the likely political biases of the scientists. But I don’t see how that makes your comparison to cargo cult science any more informative than just saying “economics is more open to political bias than paleobiology”.

  23. Well if economics is open to political bias AND economists regularly overstate their confidence in their results AND value judgements are regularly getting concealed behind a veneer of objectivity that comes from scientific trappings, then it seems to me we’re getting pretty close to the relevant sense of “cargo cult science” – a subject that uses scientific status as a source of authority but that doesn’t real have the necessary objective honesty.

    Turning the questin around, what’s actually at stake in the question of whether economics is a science or not? My feeling is that nothing’s actually gained from that designation except a certain ability to stifle criticism. But I don’t get the feeling that you’d see that as advantage, so what am I missing?

    No worries about the yelling – it’s always pleasing and surprising when you think a good discussion has broken out in the middle of what could be a trolling session. Hitting a dead end can make you feel a bit like you’ve been duped.

  24. I don’t think that these factors drive one towards cargo science, because there’s an offsetting factor that people have different political biases. So Scott Sumner and Paul Krugman might be both very confident in their results, but as their results are different, and they desire to show that the other is wrong, then that leads them to try to pick out the weak spots in each other’s arguments, and as they desire not be shown wrong themselves, that leads them to try to avoid weak arguments.

    what’s actually at stake in the question of whether economics is a science or not?

    If economics is not a science, then one of two things happen – either economics collapses into mathematics, where truth is determined by formal proof, or economics becomes something where whether something is true or not doesn’t matter. I am very fond of maths, but I think there should be in this world both maths and a mathematically-informed-but-still-empirical-based study of resource allocation.
    And I think there’s a place in this world for studying resource allocation while caring about whether your results are true or not.

    So if some people are right, and economics is not a science, then I’d like to know that, so I can push for economics turning into a science. So far, the arguments I’ve seen that it’s not have struck me as flawed, but I don’t know if that’s because they are flawed or because they haven’t been well-stated or defended.

    My feeling is that nothing’s actually gained from that designation except a certain ability to stifle criticism.

    Actually, I seldom see much point in quarrelling about the meaning of words. On the other hand, it’s difficult to quarrel without using words at all, so I use them in quarrelling.
    I’ve never come across a totally adequate definition of “science”, but its essence seems to be something that’s not mathematics and in which it’s possible to be shown to be wrong. If you want to use a different word than “science” to designate that essence, I’ll consider using that.

  25. And I’ll note that the critics of economics also have very strong political and other reasons to be biased in their assessment of the science of economics.

    That, and I’ve seen a fair bit of cargo-cult application of economics, eg a paper that argued that rising land prices was a positive externality. (It’s not, if land prices goes up then the seller of land gets more money and the buyer of land spends more money, the amount of money in the world doesn’t change at all, the author was just using the word “externality” as a dressing.)

  26. On the biases cancelling out – maybe, but it depends on the idea that the spectrum of respectable economic opinions does in fact incorporate every conceivable bias. We can be pretty sure that it doesn’t – not a lot of Marxists around these days, the Austrians seem to get less of a look in than they used to, etc. You might say that this is because they’ve all been discredited for good scientific reasons, but that seems to be begging the question a bit if you’re arguing that economics is scientific because it incorporates every bias worth having.

    My personal favourite word ever used to describe economics was “toolkit” – it seemed to get at the right sense of an assortment of tools for solving particular problems, without making any grand claims to this being unassailable. My dream economics looks like something between law and engineering – both subjects that have important, true things to say, but that don’t get hung up on the idea that what they’re doing is giving a totally accurate representation of the world. Then again, you have to live in the subject, I’m just an interested bystander.

  27. Pete: maybe, but it depends on the idea that the spectrum of respectable economic opinions does in fact incorporate every conceivable bias.

    Nah, just that regardless of what an economist says, there will be someone else reasonably smart who will be so offended by the conclusions so as to use any plausible argument to dismiss them, while still also caring for their own reputation enough to be fundamentally honest themselves.

    not a lot of Marxists around these days

    Actually quite a few, but they generally seem to be populists who apaprently don’t care about testing their theories against reality, or people who spend a lot of time telling you how wonderful Marxist economics is and how it solves all these problems, and how much better it is than failed neoliberalism, but never get around to proposing any actual different economic theories, or their economic theories, on engaging with them, get gradually explained to be the same as current mainstream economic theories (eg, as all the objections to the labour theory of value get answered by a Marxist economist, the Marxist labour theory of value turns out to make the same predictions about the cost of something as standard economic theory does). Perhaps there’s just not a good articulate Marxist economist out there, or perhaps there just isn’t that much to Marxist economics. But at the moment I think the problem is with the Marxists.

    Austrians seem to get less of a look in than they used to,

    Really? I’m surprised to hear this but I don’t have any data one way or another. Krugman critised them recently, see http://krugman.blogs.nytimes.com/2010/04/07/martin-and-the-austrians/, so I rather thought they were still getting a look in, and perhaps more of one now than in the past. But that’s only one data point. Can you tell me on what basis you’ve come to this view?

    My personal favourite word ever used to describe economics was “toolkit” – it seemed to get at the right sense of an assortment of tools for solving particular problems, without making any grand claims to this being unassailable.

    This misses out though the sheer pleasure of learning things about the world, for the sake of truth, as well as, or perhaps regardless of, whether it operates as a problem-solving tool as well.

    My dream economics looks like something between law and engineering – both subjects that have important, true things to say, but that don’t get hung up on the idea that what they’re doing is giving a totally accurate representation of the world.

    I don’t know what you mean by “don’t get hung up on the idea”. I know it can be pretty stressful for those engineers who are designing things that could kill people if they go wrong, and for various reasons can’t be safely tested in the lab.
    But, otherwise, well, engineering is applied physics/chemistry/biology/maths. No engineers, no engineering. Law is the study, application and development of a system of rules created by people, no lawyers, no judges, then no lawyering. (When I say “no”, I mean also to exclude people who might have done lawyering or engineering part-time and wouldn’t have called themselves one, as well as the full professional).

    But economies exist regardless of whether economists exist. Back with the very primitive organisms, before anything like intelligence evolved, the laws of thermodynamics meant that these organisms would face trade-offs between finding food, mating and defending against predators, and evolution was selecting the ones that made the best trade-off. And, given that economies exist regardless of whether there are economists, studying them puts economics in the science area.

  28. Nah, just that regardless of what an economist says, there will be someone else reasonably smart who will be so offended by the conclusions so as to use any plausible argument to dismiss them, while still also caring for their own reputation enough to be fundamentally honest themselves.

    Where are these people going to come from? If we’ve accepted that economics may not represent the full spectrum of opinion, then isn’t everyone outside the tent at a massive disadvantage here? -they aren’t getting paid to research economic questions, they can’t present their ideas at economic conferences, and they can’t get a media platform because no-one considers them an expert on much.

    Perhaps there’s just not a good articulate Marxist economist out there, or perhaps there just isn’t that much to Marxist economics.

    Chris Dillow’s always struck me as a good articulate Marxist economist:

    http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/

    Of course, your mileage may vary. He’s not an academic, but that kind of proves my point.

    I’ve always suspected that Marx’s low standing in academic economics had more to do with the Cold War than with anything that Marx actually said. Ricardo and Smith had their own versions of a labour theory of value, but no-one seems to think that this makes them an idiot.

    Really? I’m surprised to hear this but I don’t have any data one way or another. Krugman critised them recently, see http://krugman.blogs.nytimes.com/2010/04/07/martin-and-the-austrians/, so I rather thought they were still getting a look in, and perhaps more of one now than in the past. But that’s only one data point. Can you tell me on what basis you’ve come to this view?

    My feeling was that the Austrians tended to be rather side-lined in academic economics these days, partly because of their resistance to formal modelling that Krugman mentions. They’re still popular with libertarians, and thus popular on the internet, and economists seem to name-check them in opinion pieces. But my sense was that you don’t get to the top of academic economics by being an Austrian. You go neoclassical, neo-Keynesian, or prepare yourself for a life in the obscurity of “heterodox economics” (or stick to being largely neoclassical with Austrian economics as a sort of eccentric pass-time).

    The point of the Wolf article that Krugman linked to seemed to be that Austrian economics wasn’t getting enough of a look-in.

    This misses out though the sheer pleasure of learning things about the world, for the sake of truth, as well as, or perhaps regardless of, whether it operates as a problem-solving tool as well.

    Well you don’t actually need to be an economist to learn about the world. In fact, if it’s truth you’re after, then economics seems to me to be straying from its roots a little. a frustrating subject, since the discipline requires you to make so many limiting assumptions in order to abstract properly. It’s taken information economics and behavioural economics years to get to the point of recognising things that every non-economist already knew – people often act against their best interests because of limited information or cognitive bias.

    I realise there’s a huge difference between being knowing something and being able to incorporate it accurately within an economic model, but that’s the point – if insights about the world are what your after, then the constraints of economic modelling can hinder as often as they help.

    This doesn’t mean they’re useless – if you want to enforce consistent competition laws, build a carbon trading scheme or work out how long your copyright laws should be then you’re going to need models and lots of them. But that’s engineering rather than science.

    Back with the very primitive organisms, before anything like intelligence evolved, the laws of thermodynamics meant that these organisms would face trade-offs between finding food, mating and defending against predators, and evolution was selecting the ones that made the best trade-off. And, given that economies exist regardless of whether there are economists, studying them puts economics in the science area.

    Well if you define economy to mean “any process that you can plausibly analyse in terms of trade-offs”, then yes, economies have been around for ever. But if your definition of “economist” includes everyone from Charles Darwin to Plato, I think you might have to seriously consider the possibility that it’s too broad.

    But economies exist regardless of whether economists exist.

    I’m not sure it’s as simple as that. At the very least, I think we can say that the study of economics has an effect on its subject in a way that physics just doesn’t. John Maynard Keynes had a profound influence on the shape of modern economies – Einstein didn’t actually affect the speed of light.

    There seems to be a strong connection between the rise of capitalist market economies and the study of economics. You can argue that causation is all one way here – that the fact that economies were suddenly changing meant that people became interested in studying stuff they hadn’t been interested in before. On the implication of of McCloskey’s argument in that first paper that Morpork linked to is that the causation goes both ways – market economies developed as economics taught people to appreciate the virtues of market economies and their participants.

  29. Where are these people going to come from?

    They’re already in the tent. They’re the economists who are presenting their ideas at economic conferences, the ones being paid to research economic questions.

    What my argument is based on is not that economics reflects the full spectrum of opinion, but that there are people within economics who disagree with each other very strongly, while still retaining enough honesty to have a decent argument.

    I’ve always suspected that Marx’s low standing in academic economics had more to do with the Cold War than with anything that Marx actually said. Ricardo and Smith had their own versions of a labour theory of value, but no-one seems to think that this makes them an idiot.

    The main difference that jumps to mind is that Riccardo and Smith had their own versions of a labour theory of value well before Marx. Galileo gets a lot of respesct from physicists, but repeating Galileo’s theories wouldn’t get much respect from physicists. And Riccardo and Smith had a lot of interesting things to say on other topics – particularly comparative advantage in Riccardo’s case, and in Smith, the division of labour, the criticism of mercentalism, the “invisible hand” insight. Marx’s famous theory, that capitalism would collapse, has failed to be borne out by history. Class analysis – Smith did it first. For example:

    The government of towns corporate was altogether in the hands of traders and artificers; and it was the manifest interest of every particular class of them, to prevent the market from being over-stocked, as they commonly express it, with their own particular species of industry; which is in reality to keep it always under-stocked.

    (book I, chapter 10)

    So what is your basis for thinking that Marx should get more respect in academic economics? AFAICT, he can be summarised in the famous book review as “This book contains many original and true things. Unfortunately what is original is not true and what is true is not original.”

    My feeling was that the Austrians tended to be rather side-lined in academic economics these days, partly because of their resistance to formal modelling that Krugman mentions. … But my sense was that you don’t get to the top of academic economics by being an Austrian.

    So let me see, you have a feeling/sense that they tend to be rather side-lined, and I rather thought they were still getting a look in. I think we’re seeing confirmation bias here on at least one of our sides, or possibly both.

  30. Well you don’t actually need to be an economist to learn about the world

    And when did I ever say differently? You defined economics a a toolkit, one that allows one to solve problems. I said that this missed out the sheer pleasure of finding things out for its own sake. I don’t deny that there are other ways to learn about the world, Issac Asimov, a chemist turned SF writer, opened my eyes to the pleasures of knowing things about the phyiscal world for its’ own sake, not just because it’s useful for something else. If what you happen to find out about the world relates to the allocation of resources, then what you are engaged in is economics.

    In fact, if it’s truth you’re after, then economics seems to me to be straying from its roots a little. a frustrating subject, since the discipline requires you to make so many limiting assumptions in order to abstract properly. It’s taken information economics and behavioural economics years to get to the point of recognising things that every non-economist already knew – people often act against their best interests because of limited information or cognitive bias.

    Okay, this is a problematic paragraph.
    Firstly, what do you mean by “It’s taken information economics and behavioural economics years to get to the point of recognising things”? Behavioural economics is all about cognitive biases. If you’re not taking cognitive biases into account, how can you be doing behavioural economics? You might be doing something else incredibly worthwhile by comparison, I don’t mean to diss everything that isn’t behavioural economics, but whatever it is that you’re doing, if you’re not recognising that people can act against their best interests because of cognitive biases, by definition whatever you are doing is not behavioural economics. This applies in parallel to information economics. Those fields can’t have taken years to recognise the whole point of their existence. (Let alone the reification problem of saying that a field of study realises something, would you say that physics realises the General Theory of Relativity?)

    Secondly, saying “people often act against their best interests because of limited information or cognitive bias” is not very impressive. This is like saying “things fall down towards earth, so what’s the point of Newton’s discovery of gravity?” The questions are:
    – in what situations do people often act against their best interests, and in what situations do they act for it?
    – how do they act against their best interests?

    What Newton did that was brilliant was not to recognise the existance of “things falling down”, but to quantify it, to say that two objects with their distinct masses, separated by a distance of x, will attract each other with this force.
    What information economics and behavioural economics aims to do is to quantify under which situations people will act other than in their best interests, because of these causes, and this can affect resource allocation in equilibrium. Take this introduction to prosect theory, http://www.econport.org/econport/request?page=man_ru_advanced_prospect, it’s far more sophisticated than just recognising “people often act against their best interests because of limited information or cognitive bias”.

  31. Well if you define economy to mean “any process that you can plausibly analyse in terms of trade-offs” then yes, economies have been around for ever.

    My definition of economy is “a system for the production, distribution and consumption of resources.”

    But if your definition of “economist” includes everyone from Charles Darwin to Plato, I think you might have to seriously consider the possibility that it’s too broad.

    I shall take your advice and seriously consider the possibility that my definition is too broad. What I define economy as is “a system for/of the production, distribution and consumption of resources”. And yes, some of Charles Darwin’s arguments touched on economic theory. This is not uncommon in science, the divisions we impose on subjects are a bit artifical (eg does quantum mechanics belong in chemistry or physics?). Whether Plato wrote anything on economics I don’t know, Aristotle normally shows up as the first person thinking about economics. It was very common back in ancient times for thinkers to be polymaths, I think our current level of specialisation is driven by the increasing accumulation of knowledge that means you can’t learn everything and engage in every argument that everyone else is thinking.
    So, after consideration, I think that a definition of economist that includes Charles Darwin and Plato is quite appropriate in concept (if Plato said something somewhat scientific about economies of course).

    However, as I said, I seldom see much point in quarrelling about the meaning of words, if you wish to define “economist” some other way I will consider your alternative definition. What matters to me is the reality, not what words we use to describe it. Darwin thought about the distribution of resources, so when he was doing that he was studying economies, and if Plato did something similar then he’s covered too.

    I’m not sure it’s as simple as that. At the very least, I think we can say that the study of economics has an effect on its subject in a way that physics just doesn’t.

    Um, I didn’t say that economics doesn’t affect its study, I said that economies have existed before economics arose as a field of study. Keynes may have affected the shape of modern economies, but there were economies around before Keynes was ever borne.

    There seems to be a strong connection between the rise of capitalist market economies and the study of economics. You can argue that causation is all one way here – that the fact that economies were suddenly changing meant that people became interested in studying stuff they hadn’t been interested in before.

    I’m a bit puzzled by this statement. Why are you suddenly saying “You can” to me? I don’t recall saying anything about the study of economics being connected to the rise of capitalist market economies. Indeed, I’d never really thought about your hypothesis before, and off the top of my head, I’d disbelieve it, because I’ve been told that Aristotle and some other ancient people wrote on economic matters. I’m open to being convinced that your hypothesis is right, as I said I’d never really thought about it, but I’m not going to argue it yet.

    (Unless you meant that I could argue the opposing case, like Cicero was meant to do when preparing his legal cases, which seems a bit irrelevant).

    On the implication of of McCloskey’s argument in that first paper that Morpork linked to is that the causation goes both ways – market economies developed as economics taught people to appreciate the virtues of market economies and their participants.

    Okay, so which do you believe and why? Your hypothesis that the causation is all one way, or this implication of McCloskey’s argument? What evidence have you considered in coming to your view? What counter-evidence can you present in favour of the other view? How about a third possibility – that people have been studying economies long before markets arose, that hunter-gatherers sat around in the evenings and some bright sparks discussed them happily then? Or how about a fourth possibility, that the study of economics began with writing? Or how about some other possibilities I haven’t even thought of?

  32. Oh, and thanks for the link to Stumbling and Mumbling, I’ll look into it.
    (I’m guessing that’s the one where you got the Marx/Adam Smith reference from? He seems to have a habit of saying Marx’s ideas are similar to Smith’s, which of course raises the question of why bother being Marxist at all).

  33. On thinking about it, I think I should add that I do sometimes worry that economics is excluding important voices. On the other hand, my friends in sciences like biology and physics worry about the equivalent things too, and the other hand is figuring out which omitted voices are being omitted because of institutional biases by the practioners of the science, and which are being omitted for good reason.

  34. there are people within economics who disagree with each other very strongly, while still retaining enough honesty to have a decent argument.

    That’s not enough. Unless you can show that Feynman’s crime and education researchers were either particularly dishonest or unusually unified in their opinions, this seems to me to solve the problem for anything that’s ever been accused of being a cargo cult science.

    So let me see, you have a feeling/sense that they tend to be rather side-lined, and I rather thought they were still getting a look in. I think we’re seeing confirmation bias here on at least one of our sides, or possibly both.

    If I agree to phrase the problem more emphatically, will you agree to reply more substantively: Why the hell is Martin Wolf writing about the need to reconsider the perspectives of Austrian economics if those perspectives are being considered? For that matter, why is John Quiggin talking about them along with Marxists as a dinosaur that serious economists wouldn’t want to see return:

    http://johnquiggin.com/index.php/archives/2009/05/03/austrian-business-cycle-theory/

    So what is your basis for thinking that Marx should get more respect in academic economics? AFAICT, he can be summarised in the famous book review as “This book contains many original and true things. Unfortunately what is original is not true and what is true is not original.”

    I’ll grant you that the prediction that capitalism would collapse and be replaced by socialism isn’t looking good. Unless you’re in the Tea Party, in which case it’s apparently already come true. On the other hand, Smith didn’t think that joint stock corporations would ever muster the requisite self-interest to be a seriously effective tool of business, and everyone still agrees that he had many important things to say.

    I like beating on the Marxists as much as the next person, but I do have to admit that Marx got a lot of things right. Two that spring immediately to mind are thinking seriously about cyclical crises, and predicting that the future of capitalism would feature a lot of consolidation.

    Thinking seriously about innovation within the economy is also something where he was well ahead of the pack – I seem to remember William Baumol saying that there was so little work on innovation within market economies that he found himself going back to Marx (along with Schumpeter) when he started to research the question (it’s somewhere in the Free Market Innovation Machine).

    Whether you think he’s still massively relevant to every question is a different discussion, and usually one that people avoid having because it involves talking to a lot of slightly aggressive middle-aged men with beards. But dismissing the man with one

    More later, kind of busy.

  35. Unless you can show that Feynman’s crime and education researchers were either particularly dishonest or unusually unified in their opinions, this seems to me to solve the problem for anything that’s ever been accused of being a cargo cult science.

    Economic results piss off more monied-interests, in particular all the people who want government subsidies and protection, than those in education and crime research.
    You are of course free to think what you like about the state of economics, what interests me is the truth. Though perhaps this explains why you made the cargo cult comparison. Thank you for putting it forward.

    If I agree to phrase the problem more emphatically, will you agree to reply more substantively

    Nope. Emphatic phrasing only indicates that you feel strongly, not that you’re any more likely to be right. If you want me to reply substantively, come up with some numbers.

    As it is, what you’ve done is listed two more people writing about Austrian economic ideas, Martin Wolf and John Quiggin. So now we have three economists engaging with Austrian economics (I linked to a Krugman article earlier), two of them at least doing so recently. I don’t see how this supports your contention that Austrian economics is getting less of a look in than they used to, it strikes me as rather undermining it.
    Of course, if you wish to argue that “Austrian economists aren’t that admired”, then I can agree with you, but Krugman and Quiggin have rational reasons for their lack of respect for Austrian macroeconomics. Sounds to me like the economic profession is relatively healthy on this point. It’s one thing to consider a position, it’s another thing to agree with it.

  36. On the other hand, Smith didn’t think that joint stock corporations would ever muster the requisite self-interest to be a seriously effective tool of business, and everyone still agrees that he had many important things to say.

    So let me see, because Adam Smith made some mistakes, we should pay attention to Marx? What economists shouldn’t we pay attention to, under this criteria?
    Time has opportunity cost, time spent reading Karl Marx, or saying admiring things about him, is time spent not doing something else (and my one experience of trying to read Das Kapital was that it was bloody boring time). An economist’s reputation has to stand on their own work, not on Adam Smith’s.

    Two that spring immediately to mind are thinking seriously about cyclical crises,

    I’m not a macroeconomist, so I can’t comment on how good his theories were on this, compared with Keynes. I’m still sulking about my macroeconomics classes not featuring a breadboard economy so we could test all these theories.

    I do have to admit that Marx got a lot of things right … predicting that the future of capitalism would feature a lot of consolidation.

    Interesting. How precise was Marx’s prediction about this? For a start, what type of consolidation was he predicting? Consolidation of wealth by people, by countries? Over what time periods? What’s the empirical data that convinced you he was right about that one?

    Whether you think he’s still massively relevant to every question is a different discussion

    Well, to me the point of discussing something is to consider whether I should change my position, so I’m more interested in the basis behind what I think, rather than what I think in and of itself.

  37. Time has opportunity cost, time spent reading Karl Marx, or saying admiring things about him,

    This is also true of saying disparaging things about him, which seems to be something of a hobby for many economists.

    Interesting. How precise was Marx’s prediction about this? For a start, what type of consolidation was he predicting? Consolidation of wealth by people, by countries? Over what time periods?

    Consolidation of enterprise into ever larger bodies – “one capitalist always beat many”, and all that. The idea that large consolidated enterprises would be dominating vast chunks of the economy was not an obvious idea to many of Marx’s contemporaries, or his immediate antecedents (this was the point of me talking about Smith and joint stock corporations).

    On thinking about it, I think I should add that I do sometimes worry that economics is excluding important voices. On the other hand, my friends in sciences like biology and physics worry about the equivalent things too, and the other hand is figuring out which omitted voices are being omitted because of institutional biases by the practioners of the science, and which are being omitted for good reason.

    I think this actually puts us on pretty much the same page, with the caveat that I don’t really see what’s gained from designating economics a science, other making a vague indication that those who aren’t members of the club aren’t allowed to comment (n.b. This isn’t my experience of many professional economists).

    I fully agree that it’s one thing to worry about outside voices getting stifled, quite another to devise a system that lets them in whilst still maintaining some sort of quality control. Still, you’d think economists, of all people, would be obliged to assume that more openness was usually better.

  38. I don’t really see what’s gained from designating economics a science, other making a vague indication that those who aren’t members of the club aren’t allowed to comment

    Last time you asked me what the point was of whether economics is a science, I replied to you like this.

    “If economics is not a science, then one of two things happen – either economics collapses into mathematics, where truth is determined by formal proof, or economics becomes something where whether something is true or not doesn’t matter.”

    What part of this do you disagree with? Or did you not read it at all? Or did you miss it in my response to the mass of other comments you came up with?

    I feel a bit frustrated here. You’ve blatted out comment after comment on all manner of things under the heading of economics, you don’t answer my questions, for example you haven’t said what data convinced you that Marx’s theories were right, you’ve just repeated his data, and then you here just go ahead and basically repeat an assertion I thought I had answered already, without even mentioning what it was about my earlier argument that failed to convince you. How am I going to find out any errors in my arguments if you just ignore them like this?

    And, by the way, what data convinced you that Marx was right about consolidation? Don’t just repeat his arguments, tell me what data you’ve considered, and also any counter-evidence that you’ve considered.

  39. Still, you’d think economists, of all people, would be obliged to assume that more openness was usually better.

    Funny, you criticise economics for being empirical, but then you turn around and say that they should make some more assumptions.
    Anyway, whether openness is good depends on how open the other side of the argument is. I’m finding it hard to value openness at the moment, when you’ve just repeated what I thought I had already responded to, leaving me wondering if you read my response at all.

  40. Last time you asked me what the point was of whether economics is a science, I replied to you like this.

    “If economics is not a science, then one of two things happen – either economics collapses into mathematics, where truth is determined by formal proof, or economics becomes something where whether something is true or not doesn’t matter.”

    What part of this do you disagree with? Or did you not read it at all? Or did you miss it in my response to the mass of other comments you came up with?

    Thought this was answered when I said that there are all sorts of subjects where whether something was true or not mattered, but that we didn’t consider sciences. This was the law and engineering bit. You didn’t actually challenge that, you just said that law and engineering were entirely man-made, where as economies weren’t so it wasn’t the same.

    If that wasn’t clear then fine, although I would have thought the fact that I replied saying that there were all sorts of things that weren’t sciences where people studied true things would at least have been a clue that I’d read it.

    Funny, you criticise economics for being empirical, but then you turn around and say that they should make some more assumptions.

    The question of whether to consider opinions you’ve not heard before is something that’s necessarily going to involve a fair bit of assumption. If you’re looking into the thing empirically, you’ve already made the assumption that it’s worth looking into. In fact that’s what you seem to be complaining about

    Anyway, wth the best will in the world, I think I’m going to stop this now. You’re probably right that we’re going round in circles. A lot of it has been fun, though. And hey, if nothing else, at least you now have Stumbling and Mumbling. I’m sure Chris Dillow will do a far better job of explaining the relevance of Marx for the modern world than I’m likely to.

    If you want to kick around the economics/science question a bit more, there’s a load more McCloskey stuff out there. I’d also recommend telling the library to get a copy of Phil Mirowski’s More Heat than Light

    http://www.amazon.com/More-Heat-than-Light-Perspectives/dp/0521426898

    I have no idea whether you’ll hate it or love it, but he’s an engaging writer with an oppositional mind-set who tackles the question head on.

  41. Pete, yes, I pointed out how engineering and law are different to economics, in that economics studies something that is there regardless of whether anyone is an economist, which is what puts economics into the other sciences. So what part of that argument did you reject?

    although I would have thought the fact that I replied saying that there were all sorts of things that weren’t sciences where people studied true things would at least have been a clue that I’d read it

    I was being polite, to be honest my first thought on reading your argument that totally ignored what I had just been writing was that you were being deliberately obtuse. And quite frankly, your argument here was bloody confusing in and of itself, even apart from that it ignored what I had written in reply to you first time around, how on earth does “designating economics as a science” lead to “those who aren’t members of the club aren’t allowed to comment”? Everyone agrees that meterology is a science, but meterologists are still deluged with comments, let alone biologists (creationists) or climate change modellers (duh). I can’t seriously believe that you believe that designating a subject a science protects it from general comment.

    Anyway, with the best will in the world, I think I’m going to stop this now.

    In other words, you have no empirical data to support your earlier assertions about Marx, or indeed about Austrian economics, but you don’t want to admit it.

    This sort of behaviour I think is what puts economists off about being more open. You can spend ages talking with someone, answering their objections and arguments, and when you try to push them for data behind what they say, they suddenly cut the conversation short.

  42. I pointed out how engineering and law are different to economics, in that economics studies something that is there regardless of whether anyone is an economist, which is what puts economics into the other sciences. So what part of that argument did you reject?

    I didn’t reject that argument. I just assumed that your worry that if economics wasn’t a science then truth wouldn’t be a concern had been buried, and the worry now was whether economies could exist without economists.

    I’ll admit that there was a whole “What do you want to call an economy?” debate that we probably should have had, and that I didn’t chase up. My bad on that. But it’s slightly away from your point here.

    Everyone agrees that meterology is a science, but meterologists are still deluged with comments, let alone biologists (creationists) or climate change modellers (duh). I can’t seriously believe that you believe that designating a subject a science protects it from general comment.

    For “protect from general comment” read – have your critics considered cranks who have no idea what they’re talking about. Unless they’re taken seriously, at which point you stop being a proper science. Obviously there’s no literal prohibition on criticism of the sciences.

    In other words, you have no empirical data to support your earlier assertions about Marx

    I’m waiting to hear back about why Baumol seems to think that Marx was covering stuff that economists hadn’t addressed sufficiently in the intervening century. The fact that one of the twentieth century’s more successful economists decided he needed to pick up where Marx and Schumpeter left off is an indication that Marxists and Austrians might still have some interesting things left to say.

    It’s not a knock-down argument or anything, but you could at least have addressed it.

    On consolidation of businesses – it’s true that I am just assuming that businesses have got bigger. It seems self evident, but if you can show me evidence to the contrary – that, say, the ratio of small businesses to large businesses in developed countries had remained constant or favoured small businesses over the last 150 years – I’d be willing to change my mind. I’ll admit that I don’t have the numbers on this.

    After that, can we come to a reasonably amicable stop?

  43. I just assumed that your worry that if economics wasn’t a science then truth wouldn’t be a concern had been buried,

    May I suggest that next time, you reference the counter-arguments in their response? Then I would have known that there was a misunderstanding somewhere.

    I actually didn’t work out what you were trying to get at with the comment about engineering and law not being hung up on the truth, as I thought would have been a bit obvious from how I talked about engineers sometimes hanging up on the truth. I’m also not enough up on the theory of the law to comment on whether lawyers are hung-up on the truth or not. But my point remains, engineering and law are applied matters of a different nature to the sciences. But, as I said, I’m not hung up on words, if you wish to use another word for what economics does than science, so be it, if you wish to call engineering and law sciences, then so be it. My concern is whether economics is a science, in the sense of whether it proposes hypotheses that can be proved wrong, if you wish to use another name for that than science then please tell me what it is, and I’ll consider it. As I said, I seldom see much point in arguing about the meaning of words.

    and the worry now was whether economies could exist without economists.

    Odd thing to worry about. Do you worry if minds could exist without pyschologists? Human bodies without biologists?

    For “protect from general comment” read – have your critics considered cranks who have no idea what they’re talking about. have your critics considered cranks who have no idea what they’re talking about

    I wish you had said this in the first place. Anyway, considered cranks by who? And which critics? And how does designating something a science make this any more likely? My engineering professors used to say snooty things about people who try to build perpetual motion machines, and I’ve heard similar comments from accountants and art critics.

    Unless they’re taken seriously, at which point you stop being a proper science.

    Taking your critics seriously stops you from being a proper science? How? And what does this mean? To my way of thinking, whether you’re doing science properly turns on how you look for and what use you make of evidence. Feynman, judging by his published letters, used to engage in discussion with some cranks, and I’ve never heard anyone say that he wasn’t a proper scientist because of that. But then maybe I haven’t been listening in the right places.

    I’m waiting to hear back about why Baumol seems to think that Marx was covering stuff that economists hadn’t addressed sufficiently in the intervening century. … It’s not a knock-down argument or anything, but you could at least have addressed it.

    Not having the reference to hand I don’t know what to make of it. What did Marx say about innovation? How striking was it? Why should economists admire Marx rather than Baumol?

    My apologies for missing this one before.

    On consolidation of businesses – it’s true that I am just assuming that businesses have got bigger. … I’d be willing to change my mind. I’ll admit that I don’t have the numbers on this.

    This is rather a change around from:
    “I do have to admit that Marx got a lot of things right … predicting that the future of capitalism would feature a lot of consolidation.”

    So, what you meant by having to admit, you basically thought “Hmm, well, I don’t know of any reason that it’s wrong, so I’ll just accept it as right”, as opposed to “well, that’s interesting, I’ll keep an open mind on it”.

    I appreciate your honesty in admitting that you don’t have any empirical data. But, under the circumstances, I remain unconvinced that Marx is underrated by economists.

    After that, can we come to a reasonably amicable stop?

    Probably not, as I’m still waiting to hear back on your checking of my evidence about empirical economics.

  44. Probably not, as I’m still waiting to hear back on your checking of my evidence about empirical economics.

    Valid point. Having looked through the current issues of various economics journals, I’m going to have to concede defeat on that one.

    Why should economists admire Marx rather than Baumol?

    I don’t think it’s a case of either/or: traditionally we tend to admire academics more when other people build on their work.

    For Baumol, the key insight from Marx was that innovation might be a much more important factor in capitalist growth than efficient resource allocation. My understanding is that this really was fairly revolutionary. Ricardo had thought about labour and machinery a bit, but stopped far short of a theory of relentless growth through ever-developing technology.

    It’s also much harder to model than efficient resource allocation, which is one plausible reason why economics engaged with it much less. But that’s the fallacy of looking for your car keys under the streetlight because that’s where it’s clearest.

    The best I can do by way of reference is here:
    http://books.google.co.uk/books?id=mYW5B4vnuUUC&lpg=PA66&dq=free%20market%20innovation%20machine%20marx&pg=PA65#v=onepage&q=free%20market%20innovation%20machine%20marx&f=false

    So, what you meant by having to admit, you basically thought “Hmm, well, I don’t know of any reason that it’s wrong, so I’ll just accept it as right”, as opposed to “well, that’s interesting, I’ll keep an open mind on it”.

    The idea that businesses have got larger over time just does seem quite likely, though, doesn’t it? Everything from agriculture to medicine to retail seems to be being conducted by much larger entities than it was in the 19th Century. I mean, I s’pose I could remain sceptical that it’s actually true pending statistical evidence. There’s always an outside chance that this is one of those conventional absurdity things that everyone believes but that is in fact untrue. But are you saying that’s the case here?

    I wish you had said this in the first place. Anyway, considered cranks by who? And which critics? And how does designating something a science make this any more likely? My engineering professors used to say snooty things about people who try to build perpetual motion machines, and I’ve heard similar comments from accountants and art critics.

    I probably should have been more specific about my concern from the beginning. Specifically, I worry that it lends this air of majestic neutrality – economic advisers, monetary policy committees, etc. aren’t engaging in anything so low down as politicking – they’re just consulting their repository of economic knowledge in order to come up with an answer.

    This is why I like the lawyer analogy. Lawyers do actually have to know the law, and how it works. truth is really important to lawyers in the sense that if you actually get the law wrong, you’re toast. No ifs, no buts, we have a 100% guaranteed way of showing that you’re wrong and the other guy’s right. But no-one would ever assume that a lawyer was neutral, and everyone feels very happy debating whether a judge is neutral.

    My concern is that “science” stops us from doing the same thing to economists.

    engineering and law are applied matters of a different nature to the sciences

    This is really the heart of it, because so long as economics isn’t really being applied, I don’t have much stake in whether it’s called a science. It’s at exactly the point that we start changing the world to conform to what we’ve learnt from economics that the “science” designation worries me.

  45. Valid point. Having looked through the current issues of various economics journals, I’m going to have to concede defeat on that one.

    I admire your honesty. And in return, perhaps you have a point about Marx on innovation, I am considering whether it’s worthwhile attempting a second time to read Das Kapital.

    The idea that businesses have got larger over time just does seem quite likely, though, doesn’t it? Everything from agriculture to medicine to retail seems to be being conducted by much larger entities than it was in the 19th Century.

    Perhaps, but the idea that businesses have gotten larger since, say, the 1950s, seems a bit less likely. See for example http://www.jstor.org/pss/1923946

    A brief search turns up all sorts of data on this indicating different ways, even when just looking at the US.
    There is also the question of why higher concentration occurs, eg arguably higher levels of regulation, by increasing the fixed costs of being in business, increases market concentration for reasons Marx probably would not have considered – eg right for the wrong reasons. The ideas you referred to earlier – that one capitalist always beats many capitalists, implies a particular line of reasoning that I’m not convinced by.

    It’s also much harder to model than efficient resource allocation, which is one plausible reason why economics engaged with it much less. But that’s the fallacy of looking for your car keys under the streetlight because that’s where it’s clearest.

    This analogy assumes that you know where you dropped your keys. But we can’t know what knowledge we will discover in the future ahead of discovering it, so the analogy doesn’t hold. Instead, your argument indicates that economists were engaged in a problem-solving technique recommended by a number of my high school teachers – if you don’t know how to solve all of a problem, solve the bits you can solve first.

    Specifically, I worry that it lends this air of majestic neutrality – economic advisers, monetary policy committees, etc. aren’t engaging in anything so low down as politicking

    Well, judging by the number of times economic advisors, monetary policy committees, etc get criticised for a lack of majestic neutrality, I don’t think you need to worry about it. I just googled “neoliberal economics treasury politics” and came up with about 167,000 results, and many on the first page appear to be attributing a lack of majestic neutrality to economic advisors and etc.

    This is why I like the lawyer analogy. … No ifs, no buts, we have a 100% guaranteed way of showing that you’re wrong and the other guy’s right.

    What’s the 100% guaranteed way of showing that you’re wrong and the other guy’s right? The ruling of whatever the relevant supreme court is called? And if so, how does this analogy apply to economics, or engineering, or anything commonly referred to as a science? What’s the equivalent of a judge in these fields? I can’t imagine how you could ever have a 100% guaranteed way of showing that, say, one theory about the causes of the Great Depression was right.

    My concern is that “science” stops us from doing the same thing to economists.

    Has there ever been an example of someone starting to debate whether economics was neutral, being told that economics is a science, and therefore responding along the lines of “Oh, okay then it must be neutral, I’ll go home now.”? I call economics a science, and I’ve also told you outright that I think you should remain on the outlook for such value judgments. You appear to me to be spending a vast amount of time worrying about an extremely unlikely eventuality.

  46. I admire your honesty. And in return, perhaps you have a point about Marx on innovation, I am considering whether it’s worthwhile attempting a second time to read Das Kapital.

    Well, it’s not going to get any less turgid, but I reckon it’s worth a go.

    Reading recommendations would also be gratefully received at this end.

    Perhaps, but the idea that businesses have gotten larger since, say, the 1950s, seems a bit less likely….

    A brief search turns up all sorts of data on this indicating different ways, even when just looking at the US.

    Well, any economist who makes long term predictions about an important issue that his contemporaries aren’t really thinking about, and manages to get it right for the better part of a century is doing ok, isn’t he?

    The paper was really interesting. My gut reaction was that this was going to be a globalisation story – that firms had expanded globally and that whilst this might mean increased competition in particular markets, it would still be broadly consistent with increased business size overall. It is, as you say, much more complicated than that. The fact that anti-trust was such a big factor was a real surprise – although, as he says, it looks like a very hard thing to measure accurately.

    This analogy assumes that you know where you dropped your keys. But we can’t know what knowledge we will discover in the future ahead of discovering it, so the analogy doesn’t hold. Instead, your argument indicates that economists were engaged in a problem-solving technique recommended by a number of my high school teachers – if you don’t know how to solve all of a problem, solve the bits you can solve first.

    This is fine so long as you’re actually solving an important problem. I know the Austrians, Frank H. Knight, J. K. Galbraith etc all seemed to get upset about economic modelling for this exact reason – that it was directing economics away from important problems in favour of tractable ones that could be attacked in a suitably scientific way. Which, again, is not a bad thing in itself, but is more of a concern if one’s then going to make influential policy recommendations based on one’s findings.

    What’s the 100% guaranteed way of showing that you’re wrong and the other guy’s right? The ruling of whatever the relevant supreme court is called? And if so, how does this analogy apply to economics, or engineering, or anything commonly referred to as a science?

    I think the 100% right thing happens about the same way in economics – if someone’s screwed up the methodology of their study, or misunderstood a particular bit of theory, then they’re 100% wrong. How well they’re applying those theories to the case at hand will in many cases be a finer judgement, but that’s just the same in law.

    Well, judging by the number of times economic advisors, monetary policy committees, etc get criticised for a lack of majestic neutrality, I don’t think you need to worry about it. I just googled “neoliberal economics treasury politics” and came up with about 167,000 results, and many on the first page appear to be attributing a lack of majestic neutrality to economic advisors and etc.

    Obviously it’s hard to know, but might a large number of those folks who are attributing a lack of majestic neutrality to economic advisors not also quibble with the idea that economics was a science?

    Has there ever been an example of someone starting to debate whether economics was neutral, being told that economics is a science, and therefore responding along the lines of “Oh, okay then it must be neutral, I’ll go home now.”? I call economics a science, and I’ve also told you outright that I think you should remain on the outlook for such value judgments. You appear to me to be spending a vast amount of time worrying about an extremely unlikely eventuality.

    Well no, what you get in that instance is fools like me yelling “No it’s not, it’s not neutral.”

    The interesting question is whether, if you tell someone that economics is a science, they’re more likely to associate it with objectivity, and thus neutrality. Is that so unlikely?

    I really do think I’m going to have to stop now – although I’ll check for any reading updates.

  47. Reading, I suggest Krugman on mathematical modeling in economics, at http://web.mit.edu/krugman/www/formal.html

    Well, any economist who makes long term predictions about an important issue that his contemporaries aren’t really thinking about, and manages to get it right for the better part of a century is doing ok, isn’t he?

    That depends on how many other predictions he or she made.

    This is fine so long as you’re actually solving an important problem.

    And, AFAIK, it’s also fine if you can’t, at the moment, solve the important problem. Perhaps what you learn solving the relatively minor problem will help you, or someone else, solve the important problem in the future, or solve a different important problem. I think that this tactic has helped me a lot of times in the past and I intend to keep using it in the future, unless you have a better tactic for approaching problems someone doesn’t know how to solve.

    I know the Austrians, Frank H. Knight, J. K. Galbraith etc all seemed to get upset about economic modelling for this exact reason – that it was directing economics away from important problems in favour of tractable ones that could be attacked in a suitably scientific way.

    I suspect you’ve misread what they were saying, I highly doubt that they were in favour of attacking important problems in a unsuitably scientific way.

    I think the 100% right thing happens about the same way in economics – if someone’s screwed up the methodology of their study, or misunderstood a particular bit of theory, then they’re 100% wrong.

    This seems implausible, I remember from logic that the right conclusions can be drawn from the wrong premises, eg:
    Premise 1: Dolphins are fish.
    Premise 2: Fish live in the sea.
    Conclusion: Dolphins live in the sea.

    Conclusion is right (excluding dolphins living in tanks), premises are wrong.

    I also don’t know how this applies to court cases – how can you be 100% wrong if a judge rules “on the balance of the probabilities”, or if a jury acquits “because the evidence is good, but it’s not beyond reasonable doubt”?

    Obviously it’s hard to know, but might a large number of those folks who are attributing a lack of majestic neutrality to economic advisors not also quibble with the idea that economics was a science?

    Irrelevant for your worry, what you would want to know is the number of people who are fine with the idea that economics is a science, but also attribute a lack of majestic neutrality to economic advisers.

    if you tell someone that economics is a science, they’re more likely to associate it with objectivity, and thus neutrality. Is that so unlikely?

    Well, given that you haven’t mentioned any examples of this happening, I suspect yes, it is unlikely. (And quite frankly, given the amount of money and power at stake in many economics debates, I think cognitive biases will lead us humans to pay ample attention to any argument that will allow us to dismiss the arguments we don’t like).

    As for your continual worry about the effects of calling economics a science, is there any observation that could convince you otherwise?

  48. And while I’m at it, when did resource allocation become, by implication, an unimportant problem? I can see the argument that innovation is a more important problem, but that doesn’t imply that resource allocation is unimportant.

  49. I suspect you’ve misread what they were saying, I highly doubt that they were in favour of attacking important problems in a unsuitably scientific way.

    Possibly misrepresented, but these guys really had a deep mistrust of too much formal modelling and mathematics. It wasn’t a call to be more unscientific, but there was a profound feeling that emulating the natural sciences was not the way to go. Krugman’s famously likes to have a go at both Galbraith and the Austrians on this score.

    This seems implausible, I remember from logic that the right conclusions can be drawn from the wrong premises, eg:
    Premise 1: Dolphins are fish.
    Premise 2: Fish live in the sea.
    Conclusion: Dolphins live in the sea.

    Conclusion is right (excluding dolphins living in tanks), premises are wrong.

    I suppose what I’m saying is that you’re entitled to treat the results of someone who’s messed up their methodology as completely suspect. In the same way, the argument of someone who’s misquoting the law is just not admissible (assuming someone notices, of course).

    I also don’t know how this applies to court cases – how can you be 100% wrong if a judge rules “on the balance of the probabilities”, or if a jury acquits “because the evidence is good, but it’s not beyond reasonable doubt”?

    That’s a question of fact rather than a question of law. A lawyer’s trying to establish two different things in a court room – what the law actually is, and how it applies to the facts. So the analogy here would be questions of law (theory), rules of evidence (methodology) and facts (data). It’s the questions of law and rules of evidence that you can clearly be 100% wrong on, in pretty much the same way that you can screw up your theory or methodology and thus invalidate your results.

    Irrelevant for your worry

    But relevant as a rebuttal if you were using those numbers as evidence that believing economics is a science doesn’t seem to stop people from criticising it.

    what you would want to know is the number of people who are fine with the idea that economics is a science, but also attribute a lack of majestic neutrality to economic advisers.

    Well what I’m really looking for is the number of people who believe that economics is neutral as a result of their belief its scientific.

    (And quite frankly, given the amount of money and power at stake in many economics debates, I think cognitive biases will lead us humans to pay ample attention to any argument that will allow us to dismiss the arguments we don’t like).

    Isn’t the point of cognitive biases that they stop people from acting in their economic best interests? You could even frame my worry as a sort of system justification bias – the belief that leading economists are scientists helps reassure people that the policies those economists are recommending must be sensible ones.

    As for your continual worry about the effects of calling economics a science, is there any observation that could convince you otherwise?

    It’s a fair question. I suppose the thing that would come closest to clearing this up for both of us would be if someone would conduct a decent survey of attitudes to economics, and look for correlations between belief in its neutrality and belief in its scientific status.

    And while I’m at it, when did resource allocation become, by implication, an unimportant problem? I can see the argument that innovation is a more important problem, but that doesn’t imply that resource allocation is unimportant.

    Fair point. I didn’t mean to imply that. My argument is slightly different – by pursuing resource allocation (because this looked like a problem that could be tackled using the methods of the natural sciences), economics turned itself into a discipline that was less likely to tackle other important issues. That was pretty much the Galbraith, Knight, and Austrian line of thought, although they disagreed about what they thought were the important issues being left out.

    I’m a little pressed for time here, so can I leave you with Steve Randy Waldman making what I’d see as a much more subtle criticism of the urge to be scientific in economics:

    http://www.interfluidity.com/v2/1049.html

    Paraphrasing him slightly, his point is that economists often want to treat ideological and political considerations as exogenous because they see them as value laden and thus unscientific (this comes back to where we started this – “economists don’t want to say anything about ends”). Whether or not you like the sort of plan he’s proposing as a solution, I think it’s a valid argument about how the urge to be scientific can be a two-edged sword.

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