Here are two discussions about how Chicago teaches economists to do economics. Both Reder and McCloskey say that when the evidence contradicts ideology, stick with the ideology.
McCloskey, Donald N. 1985. The Rhetoric of Economics (Madison: The University of Wisconsin Press).
140: "In seminars in economics it is common for the speaker to present a statistical result, apparently irrefutable by the rules of positive economics, yet to be met by choruses of "I can't believe it" or "It doesn't make sense." Milton Friedman's own Money Workshop at Chicago in the late 1960s and the early 1970s was a case in point."
And
Reder, Melvin W. 1982. "Chicago Economics: Permanence and Change." Journal of Economic Literature, 20: 1 (March): pp. 1-38.
13: "Any apparent inconsistency of empirical findings with implications of the theory, or report of behavior not implied by the theory, is interpreted as anomalous and requiring one of the following actions: (i) re-examination of the data to reverse the anomalous finding; (ii) redefinition and/or augmentation of the variables in the model...; (iii) alteration of the theory to accommodate behavior inconsistent with the postulates of rationality... (iv) placing the finding on the research agenda as a researchability anomaly." Chicago tends to shun iii.
13: It is customary to confront theory with evidence. By contrast, "Chicago economists tend strongly to appraise their own research and that of others by a standard that requires [inter alia] that the findings of empirical research by consistent with the implications of standard price theory."
18: The major objective is to convert non economists to their way of thinking.
19: "However imaginative, answers that violate any maintained hypothesis of the paradigm, are penalized as evincing failure to absorb training."
20: ""Explanation" means either a demonstration that the phenomenon is compatible with the underlying theory, or the provision of such extensions of the theory as may be required."
25: Friedman combined economic research with advocacy of specific proposals. All involved an increased use of price system instead of public production .... This is a normative stance. Friedman said to advocate regardless of political practicality. Stigler thought that once could convince a beneficent government to adopt reforms with sufficient political support. He eliminates the normative.
13 comments:
'Chicago' economics ..or 'acceptable' economics?
Most of the public statements that pertain to economics appear to be merely an expression of the branch of the corporate industrial machinery. Aimed at achieving precision control of the population.
How many decades have we been facing institutionalised deception and propaganda?
Economic misconceptions. Innacurate historical anaylysis. Reductionist thinking. Media filtering. Incessant advertising. PR spin. Flak campaigns. Words to hide the truth.
Friedman to promote 'expert dependence, 'individualism', 'centralisation'. To teach us to accept our artificial environment and leave us with values that exchange forests for packaging, nutrition for non-foods, joy for back-yard swimming pools.
Chicago economics won't go away until we have world famine without precedent in every corner of the earth.
This isn't entirely fair to the theorists, because the data they have to work with are generally not worth the electrons they're displayed by. (Every month when the news comes out that such and such an index is up or down by a tenth of a percentage point, I remember that suck ticks are well within the statistical margin of error, much less the margin contributed by so many other factors.)
Of course, to draw any conclusions from data you have to run it through a gauntlet of assumptions so formidable that perhaps we should blame the theorists after all
Perhaps Chicago economics can be compared to Chicago (deep dish) pizza: Too much dough and not enough toppings.
Ouch. Shag do you twist the shiv when you pull it out in Brookline? Or just let them bleed slowly? That was the best takedown of the Chicago folk ever, and they may just have felt a mild sting.
'toppings?' 'dough?' Caplan will never figure out who stuck him.
I think Caplan went to Princeton, not Chicago.
Barkley, His education may be from Princeton but he eats his Economics Chicago Style.
Actually per his unintentional funny "Intellectual Autobiography" he was undergrad at Berkeley and regarded the Princeton PhD program pretty much as a ticket punch;
"In choosing Princeton’s Ph.D. program, I knowingly took the path of short-term pain for long-run gain. Like all top departments, Princeton econ was long on math and short on economic intuition. I tried to make the best of it: do an adequate job in my classes and satisfy my curiosity with free reading."
snip
"In my spare time, I did what I was supposed to be doing, writing a “plain vanilla” dissertation on the economics of state and local government. It was an unpleasant experience, but I picked up the basics of academic writing and finished the Ph.D. in four years, so I have no cause for complaint."
I doubt they will pick Caplan as Alumnus of the Year at Princeton.
(Plus it was a joke.)
"...Princeton econ was long on math and short on economic intuition. I tried to make the best of it." What the devil is economic intuition? It sounds about as objective (precursor to scientific)as intelligent design. I'm all for meeting in some central place, a high class gin mill sounds about right, so we can all sit around and exercise our economic intuition. I'll match my imagination, sorry, intuition with that of the best of them, Chicago oriented or otherwise. Has anyone asked Lou Dobbs or Chris Matthews what their intuition tells them about economic policy in the US of A? Why not? They're both very intuitive regarding facts of economic life and I'd venture a guess that they're both far more economically successful than any of us.
Actually, Bryan Caplan is probably "to the right," to the extent that means anything here of most of the current Chicago econ dept. He is very strongly libertarian, as one can pick up from reading econlog.
Barkley
There's nothing wrong with having a libertarian point of view so long as one doesn't insist that such a view point is sanctioned by wome higher order spirit. Most problematic is that most libertarians seem to hold the opinion that all others' liberties are subordinate to theirs.
Most of what I know of Caplan is drawn from his assault on Democracy whereby not agreeing that minimum wage increases hurts workers means losing your right to vote. "Myth of the Rational Voter". The basic position seems strongly out of the Orthodox/Heterodox distinction with him firmly on the Chicago side. That he may be to the Right of Chicago doesn't absolve him from the dough/toppings critique.
But if you read his 'Intellectual Autobiography' and even just view the hideous design of his web page, you can see a guy that however talented he may be never got over his excitement at reading Atlas Shrugged and just wanted to be in a place where he can get paid to discuss it with his other pals. To listen to him GMU is the coolest clubhouse ever.
A few samples;
"As I digested the stock of libertarian insight, I noticed a phenomenon central to my mature research: Most people violently rejected even my most truistic arguments. Yes, I was a shrill teen-ager, but it seems like anyone should have recognized the potential downside of drug regulation once I pointed it out."
'Truistic' apparently defined as 'blindingly obvious to Bryan Caplan.
"Let me begin with the deep truths.
The Objectivists were right to insist that reality is objective, human reason able to grasp it, and skepticism without merit. They correctly held that humans have free will, morality is objective, and the pursuit of self-interest typically morally right. Rand’s politics was also largely on target: laissez-faire capitalism is indeed the only just social system, socialism is institutionalized slavery, and the welfare state’s attempt to reconcile these poles is a travesty.
What about the deep truths of the Austrians? Perhaps the most valuable, to my mind, was their view - perhaps only implicit - that economists should focus on big questions, not the picayune minutiae that fill most academic journals. I always roll my eyes when someone alludes Keynes’ hope that economists make themselves “as useful as dentists.”
That is not economics, that is a Randite Fanboy.
"This tragedy helped me appreciate the logical conclusion of collectivist ideas: Rand’s equation of socialism with slavery was no hyperbole."
No it is hyperbole. And recklessly ignorant of history.
"The underlying goal of my research on voter irrationality, in brief, is to resurrect the 1970’s Chicago “markets good, government bad” consensus. This intuitively plausible view"
'Truistic' 'Deep Truths' 'Big Questions' 'Logical Conclusion of Collectivistism' 'Intuitively Plausible'
This is to rigorous thought and argumentation as Bush's gut is to foreign policy decision making.
"I am looking forward to a lifetime of thinking about the Big Questions and going wherever my curiosity takes me."
What size hat does this guy wear? A nine and a half? Caplan may not be a straight down the line Chicago Economists, frankly his disdain for mathematics in favor of Big Ideas might disqualify him. But he is the perfect exemplar of everything I personally oppose. There is a big difference between being a Professor of Libertarianism and Anarchism and being an anarchist and a libertarian. Caplan is clearly authoritarian to the bone.
And speaking of Princeton this is guaranteed to win him some friends.
"But most of the students at Princeton were what I dismissively call “careerists,” and in spite of their high IQs, the Princeton faculty - with the notable exception of Ben Bernanke - were sadly narrow."
Sadly narrow apparently defined as 'Not immediately convinced by the Logical Truisms of Bryan Caplan.'
But once again I was just commenting on a clever play on words by Shag, not attempting some dissection of faculty politics among the Orthodox.
Now that the libertarian has been put on the table alongside the deep-dish pizza, how does a libertarian differ from a libertine?
Q: how does a libertarian differ from a libertine?
A: Libertines actually get laid.
Not exactly. The libertine recognizes his or her predilections as being off center, a bit more extreme than that of the common man. The libertine simply seeks out pleasure and enjoyment for its own sake. The libertarian, on the other hand, is more focused on his/her right to conduct his/her behavior in a way that is unencoumbered by governmental structure. The libertine has no problem with the rules. He simply acts on his own inclination regardless of the rules. The libertarian would rather demand his right to act this way or that rather than simply enjoy the activities of life regardless of regulatory sanctions.
Post a Comment