Why critique in economics is so important

17 September, 2016 at 16:46 | Posted in Economics | 9 Comments

Some of the economists who agree about the state of macro in private conversations will not say so in public. This is consistent with the explanation based on different prices. Yet some of them also discourage me from disagreeing openly, which calls for some other explanation.

un7gnnaThey may feel that they will pay a price too if they have to witness the unpleasant reaction that criticism of a revered leader provokes. There is no question that the emotions are intense. After I criticized a paper by Lucas, I had a chance encounter with someone who was so angry that at first he could not speak. Eventually, he told me, “You are killing Bob.”

But my sense is that the problem goes even deeper that avoidance. Several economists I know seem to have assimilated a norm that the post-real macroeconomists actively promote – that it is an extremely serious violation of some honor code for anyone to criticize openly a revered authority figure – and that neither facts that are false, nor predictions that are wrong, nor models that make no sense matter enough to worry about …

Science, and all the other research fields spawned by the enlightenment, survive by “turning the dial to zero” on these innate moral senses. Members cultivate the conviction that nothing is sacred and that authority should always be challenged … By rejecting any reliance on central authority, the members of a research field can coordinate their independent efforts only by maintaining an unwavering commitment to the pursuit of truth, established imperfectly, via the rough consensus that emerges from many independent assessments of publicly disclosed facts and logic; assessments that are made by people who honor clearly stated disagreement, who accept their own fallibility, and relish the chance to subvert any claim of authority, not to mention any claim of infallibility.

Paul Romer

This is part of why yours truly appreciate Romer’s article, and even find it ‘brave.’ Everyone knows what he says is true, but few have the courage to openly speak and write about it. The ‘honour code’ in academia certainly needs revision.

The excessive formalization and mathematization of economics since WW II has made mainstream — neoclassical — economists more or less obsessed with formal, deductive-axiomatic models. Confronted with the critique that they do not solve real problems, they  often react as Saint-Exupéry’s Great Geographer, who, in response to the questions posed by The Little Prince, says that he is too occupied with his scientific work to be be able to say anything about reality. Confronting economic theory’s lack of relevance and ability to tackle real probems, one retreats into the wonderful world of economic models.  While the economic problems in the world around us steadily increase, one is rather happily playing along with the latest toys in the mathematical toolbox.

Modern mainstream economics is sure very rigorous — but if it’s rigorously wrong, who cares?

Instead of making formal logical argumentation based on deductive-axiomatic models the message, I think we are better served by economists who more  than anything else try to contribute to solving real problems. And then the motto of John Maynard Keynes is more valid than ever:

It is better to be vaguely right than precisely wrong



  1. Is it brave?

    As he effectively says himself, he can take pot shots now that he is not in academia.

    It would have been braver to have done so before making the move away from academia.

    While he is lifting the carpet up and revealing the concealed dirt, it leaves one with reinforced cynicism.

    It speaks volumes not only about the state of academic economics but also the state of the human condition.

    • Better late than never 🙂

      • And what I said above is probably a tad unfair given what he says in the 4th last paragraph on page 22.

        It ain’t easy.

  2. Disinterested understanding is the goal.

    Evidence shows that “interested reason” is inevitable, confirming the primacy of politics.

    Politics is a social behavior.

    Evidence shows that repeatedly stating the ubiquity of self-interest reinforces self-interested behavior. Statements of the ubiquity of self-interest have been transformed by analogizing the optimism of science with optimism regarding its result, into statements that the ubiquitous should be celebrated.

    “Disinterested reason” has made interested reason the goal.

    Science is seen to celebrate asocial behavior.
    The celebration of asocial behavior is anti-social.
    The anti-social is the anti-political.

    “Science” has turned people into idiots.

    “Some of the economists who agree about the state of macro in private conversations will not say so in public. This is consistent with the explanation based on different prices. Yet some of them also discourage me from disagreeing openly, which calls for some other explanation.”

    No adult should be proud of stating the obvious.

  3. Which Paul Romer, Chief Economist at World Bank, article is being referred to?

    • Paul Romer’s name at bottom of the quote box is a link to a pdf. I think the same pdf is available from a link in the latest post on Romer’s own blog.

  4. Now is the time to get our heads out of the sand. Study and correct past notions and for goodness sake start to use water-tight logical arguments in place of the dream idealist twaddle which most writers on this subject think they can get away with!

  5. David,

    Which starting axioms and assumptions do you think you can get a way with in your scheme of things?

  6. Wicksell, Secular Stagnation and the Negative Natural Rate of Interest

    Mauro Boianovsky
    Universidade de Brasilia

    September 1, 2016

    Duke University Center for the History of Political Economy Working Paper No. 2016-25

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