Paul Romer on unscientific freshwater groupishness

1 August, 2015 at 15:39 | Posted in Economics | 3 Comments

As you would expect from an economist, the normative assertion in “X is wrong because it undermines the scientific method” is based on what I thought would be a shared premise: that the scientific method is a better way to determine what is true about economic activity than any alternative method, and that knowing what is true is valuable.

00aaIn conversations with economists who are sympathetic to the freshwater economists I singled out for criticism in my AEA paper on mathiness, it has become clear that freshwater economists do not share this premise. What I did not anticipate was their assertion that economists do not follow the scientific method, so it is not realistic or relevant to make normative statements of the form “we ought to behave like scientists.” …

Together, the evidence I summarize in these three posts suggests that freshwater economists differ sharply from other economists. This evidence strengthens my belief that the fundamental divide here is between the norms of political discourse and the norms of scientific discourse. Lawyers and politicians both engage in a version of the adversarial method, but they differ in another crucial way. In the suggestive terminology introduced by Jon Haidt in his book The Righteous Mind, lawyers are selfish, but politicians are groupish. What is distinctive about the freshwater economists is that their groupishness depends on a narrow definition of group that sharply separates them from all other economists. One unfortunate result of this narrow groupishness may be that the freshwater economists do not know the facts about how most economists actually behave.

Paul Romer

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  1. I have been following the controversy over mathiness raised by Romer with mixed feelings — my initial impulse was to ask, where have you been for the last 60 years?
    .
    Romer was quite explicit about where his own loyalties lie in his original paper: he wrote,
    “Economists usually stick to science. Robert Solow (1956) was engaged in science when he developed his mathematical theory of growth. But they can get drawn into academic politics.”
    “Joan Robinson (1956) was engaged in academic politics when she waged her campaign against capital and the aggregate production function.”
    .
    In my view, it was precisely in that moment, in 1956, when economics, and growth theory in particular, lost its ability to digest the results of critical inquiry. That was when mathiness, as Romer calls it, became inevitable. Not because Robinson was wrong, but because she was right, and Samuelson and Solow acknowledged that she was right, but, then, nothing changed. It became acceptable to have a purely conventional correspondence between the math and understanding expressed in natural language, with the understanding accessible via natural language fatally deprecated in favor of mere convention.
    .
    There’s no defense for the production function, aggregate or otherwise, as a theory of production. Production is not a function of factor inputs, and a few minutes of critical thought ought to be sufficient to establish that, and capital as an accumulating factor is even less defensible. That doesn’t mean that Solow’s empirical analysis of growth has no interest, but it does mean that it has no proper claim to be a theory of growth, and certainly not a theory in which explanations of the long-run dynamics of income distribution feature an accumulating capital subject to diminishing returns in production output.
    .
    But, here, we are. Romer knows perfectly well where economics went wrong, but is loath to admit it. He closes his paper in the Papers and Proceedings Volume of the AER with this plaintive question: “Where would we be now if Robert Solow’s math had been swamped by Joan Robinson’s mathiness?”
    .
    Where, indeed?

    • Bruce:

      1) Read what I say below in light of knowing that I agree with you.

      2) I think I recall comments elsewhere — Crooked Timber? — by someone using your name (presumably you) that you had a Yale PhD. I believe I followed you there by several years. In the first year macro lecture where Tobin covered the C-C controversy, when someone commented that UK Cambridge was correct in their argument and US Cambridge was wrong, he shrugged and grunted, essentially, “So what? The model describes the data reasonably well.” There was no concern that I was aware of that the first, if not most, important point of a mathematical model is logical consistency, that without this, it fails its (dare I say it) “scientific” purpose. I recall mild scorn for Robinson and her (largely Italian) colleagues. Nowadays, we might take this for hippie punching.

      3) When Romer’s attacks on mathiness entered the blogsphere 2-3 months ago, I had the same thoughts as you did at the top of your post. Be patient. Krugman often engaged in hippie punching until about the time of the Iraq War. I don’t think Delong largely dropped the tactic until after the crash and GFC of 2008. Romer has just abandoned his affinity group, and it will take him awhile to recognize who his allies are in this battle. Until then, he will continue to try to show his intellectual seriousness by attacking and misrepresenting those whom he previously opposed (and likely attacked and misrepresented, because misunderstood. “Everybody does it”).

      4) In the meantime, sit down, crack open a beer, pass the nuts or pretzels or popcorn — take your pick — and enjoy the show.

      • Joseph Stiglitz published a review of a book by a UK economist about the Cambridge Capital Controversy around 1974, which he subtitled, “A View from New Haven,” and in it he elaborated the view you attribute to Tobin.
        .
        Stiglitz really did not understand that Robinson, Pasinetti and the rest were making a fundamental point about the architecture of an economics, an architecture building upon an untenable concept of capital. He saw Robinson’s point as being a kind of trivial special case, one of many paradoxes hiding in the remote recesses of neoclassical theory, which had few practical consequences.
        .
        Romer identifies the subversive intent behind mathiness, and it is interesting that he targets Piketty as well as Lucas and Prescott. Lucas and Prescott are trying to subvert the neoclassical synthesis, to make theory safe again for Dr. Pangloss and his homunculus, the self-regulating market economy. Piketty, I believe, is attacking the concept of capital, as Robinson did, but with a completely different strategic and tactical array. We can hope that more of the mainstream will engage with Piketty and disengage from the successors to Lucas and Prescott.


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