How Is Economics Different?

I’ve just read, with morbid fascination, “The Superiority of Economics” by Marion Fourcade, Etienne Ollion, and Yann Algan, which will appear in a forthcoming issue of the Journal of Economic Perspectives.  No surprise that it is such a fine bit of work: I was very impressed by Fourcade’s Economists and Societies: Discipline and Profession in the United States, Britain, and France, 1890s to 1990s, which came out a few years ago.

My reactions might be interesting because, while my training is in economics, I never managed to get into the profession and have not taught in an economics department in any capacity in over 20 years.  This has its pluses and minuses.  I think I was better placed to write my economics textbooks as someone who could refer to economists in the third person (good for critical thinking), while I realize that, being completely out of the loop, I’m susceptible to serious gaps in understanding and errors in interpretation.  But there’s no perfect vantage point, right?

Anyway, here are some thoughts about “Superiority”.  You should read the original article first to see what I’m reacting to.

1. I’m surprised by the data that suggests that economists are not collaborating more across disciplinary boundaries than they used to.  It might be that the focus on top journals and citations, understandable from a data availability perspective, obscures the actual trend, or maybe not.  One possible source of omitted evidence is that their list of external disciplines does not include psychology or biology, two fields where it seems to me that collaboration has been most fruitful.  (See Figure 3, Extra-disciplinary citation in five top journals.)

2. The authors cite a bit of evidence for the view that economists think they are smarter than other social scientists.  (Tyler Cowen thinks economists really are smarter.)  My experience is that this attitude is in fact widespread and is a source of friction in academia: many faculty in other fields feel disrespected by economists and get a surge of schadenfreude when economics gets taken down a peg, as happened in the immediate wake of the financial crisis.  At the same time, the notion that there is something genuinely superior about economics or economists is absurd, when you think about it.  Write down your own list of the ten books or authors that you think have contributed most to our understanding of the modern world—how many are based in economics?  If you have more than, oh, two on your list you need to read more widely.

3. In my opinion, the inferiority of economics is revealed in topic areas where disciplines overlap—where economists and noneconomists study the same phenomena.  In nearly each case, I think you would learn more and better by paying greater attention to the nonecons.  This includes management, law, economic sociology, international political economy and social psychology.  I’m not saying economics isn’t valuable and even essential, just that there’s more illumination coming from other lamp posts.

4. The treatment of organizational structure focuses entirely on the American Economic Association in relation to the professional organizations for American political scientists and sociologists.  This material was quite interesting, but aren’t they leaving out something important?  I’m thinking of the National Bureau of Economic Research (NBER), which provides support and especially networking for “core” researchers in economics.  From where I stand, many rungs beneath, this looks like a nomenklatura for the profession.  Perhaps this is the sort of misinterpretation I warned against earlier.  But if not, we ought to document how members of NBER are recruited and what the career consequences are for inclusion versus exclusion.

5. Much is made of citation and authorship data drawn from a small number of select journals in economics and other social sciences.  This is the main value added provided by the paper, in fact, compared to earlier work.  I wonder, however, whether we should think of the patterns uncovered in these journals as primarily facts about journal publication or as proxy indicators of some deeper underlying process.  My reason for wondering is that, for the purposes of disseminating new research, working papers have almost entirely eclipsed published articles.  If, for instance, we care about the fact that most authors in the top econ journals come from the top five graduate departments because we think that these journals constitute a critical channel of research communication—well, we can care less now.  On the other hand, the relative concentration of authorship in economics compared to other fields revealed by Fourcade et al. may be important for what it says about the nature of the economics star system (and its tight institutional embeddedness in a few departments), and this may persist even after the journals have lost their earlier role.  If I were a reviewer of this article, I would have posed this question.

6. Towards the end the authors toss off in passing what they regard as the key points of intellectual unity that distinguish economists from, say, sociologists.  They don’t try to back this up with references, and perhaps it’s really the sort of thing different people will see differently.  In that spirit, here’s my short list.  (I make no attempt to justify or explain, but you’ll find most of this amplified somewhere or other in previous blog posts.)

a. Causation as prediction rather than process.  The goal of econometric work is to fulfill certain criteria for predicting the effect of independent variables on dependent variables, rather than to locate and describe causal mechanisms or processes.

b. Homogeneity and average effects.  Economic models incorporate entities (agents, goods) that are homogeneous in most respects or differ according to a few indexable criteria, and empirical methods search for discernible average effects.  In other disciplines the uniqueness of entities plays a greater role—one reason for more reliance on case studies.

c. Positive/normative convergence.  Perhaps the single most far-reaching intellectual commitment of economists is to the assumptions necessary for positive models (which can be tested or calibrated with real world data) to yield normative conclusions.  Utility theory, whose longevity is otherwise difficult to explain, is central to this.  Positive/normative convergence, of course, is what allows economics to evaluate policy in a dispositive manner and is attractive to people who, for varying reasons, distrust political and bureaucratic mechanisms.

d. Decision theory.  Economics has practically defined itself as a branch of decision theory, or perhaps as decision theory itself.  One characteristic of this theory is that it is forward-looking, comparing the results of some possible course of action to the continuation of the status quo (not taking the action).  As such, it discounts the historical roots of the status quo or indeed any source of judgment or evaluation external to the comparison between different decision outcomes.

7. For the most part, this article tries to understand the economics profession according to its internal characteristics: its professional structure and norms, the beliefs of its practitioners, and their interactions with academics from other disciplines.  It reveals a lot.  But little is said about the external factors, how economics is affected by the broader structures of power, interest, and beliefs in society at large.  This is the realm of ideological analysis.  I would be the first to defend the notion that internal factors are very important, and that it would be a mistake to think of economics as simply a functional element within, say, a capitalist framework or some other model of how the world works.  But surely these larger interests have to matter.  It can’t be incidental, for instance, that economics, whose main subject matter is central to accumulation of wealth, has the most tunneled vision of all the social sciences.  Of course, loose impressionistic claims about ideology have little value; this is an area for research and hypothesis-testing just like any other.  We need an internal account, among other reasons, to discipline critiques based on external reward or control, but we also need to bring in external factors in order to avoid attributing too much independent importance to professional selection, the bylaws of the AEA or other such matters.