Alan Krueger (1960 – 2019)

20 Mar, 2019 at 22:49 | Posted in Economics | 7 Comments

jp-imgresI’ve subsequently stayed away from the minimum wage literature for a number of reasons. First, it cost me a lot of friends. People that I had known for many years, for instance, some of the ones I met at my first job at the University of Chicago, became very angry or disappointed. They thought that in publishing our work we were being traitors to the cause of economics as a whole.

David Card

Economist-former-Obama-adviser-Alan-Krueger-dead-at-58Back in 1992, New Jersey raised the minimum wage by 18 per cent while its neighbour state, Pennsylvania, left its minimum wage unchanged. Unemployment in New Jersey should — according to mainstream economics textbooks — have increased relative to Pennsylvania. However, when economists David Card and Alan Krueger gathered information on fast food restaurants in the two states, it turned out that unemployment had actually decreased in New Jersey relative to that in Pennsylvania. Counter to mainstream demand theory we had an anomalous case of a backward-sloping supply curve.

Lo and behold!

But of course — when facts and theory don’t agree, it’s the facts that have to be wrong …

The inverse relationship between quantity demanded and price is the core proposition in economic science, which embodies the pre-supposition that human choice behavior is sufficiently rational to allow predictions to be made. Just as no physicist would claim that “water runs uphill,” no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.

James M. Buchanan in Wall Street Journal (April 25, 1996)

Alan Krueger was an economist who — contrary to people like Buchanan — had the courage to question received opinion when facts falsified the theory. RIP.

7 Comments

  1. Rancid public choice theory …

    Comment by skippy— 21 Mar, 2019 #

  2. When Alfred Wegener proposed his theory of Continental Drift he was received differently in European vs. American scientific community. In America and England he was largely rejected (although not by all), yet received a thoughtful response from his European fellow scientists who lived everyday in the face of the evidence he was citing. Wegener looked at all the evidence, over a diverse range of fields, which rankled specialists in America. How dare he, a mere meteorologist, come onto their turf and make bold theoretical statements. Theory trumped evidence in theire minds; and there was evidence which they ignored, a growing body of anomalies which required ad hoc modifications to mainstream theory.

    The rigidity of the Earth was so strongly emphasized by the solidists that it was difficult for several new ideas to get a fair hearing. The acceptance of a liquid core, suggested by seismological evidence as early as 1906, was delayed for two decades; my guess is that this was in part because of reluctance to contradict Kelvin’s doctrine of complete solidity. When the Oldham—Gutenberg discontinuity was eventually interpreted as a transition between solid and liquid regions, this conclusion was seen as a new discovery, not a reversion to 19th-century ideas.

    The solidist victory was probably a major reason for the hostile response to Wegener’s theory of continental drift when it was first proposed. Here we have some fairly clear evidence of the influence of the 19th-century debate in a remark of R. D. Oldham at a discussion of Wegener’s theory in 1923:

    I can remember that when I started as a geologist the idea was not unknown that a good deal of geological evidence was, at any rate, not inconsistent with the notion that the continents have not always occupied the positions on the surface of the globe which they do now. But I also can remember very well that in those days it was unsafe for anyone to advocate an idea of that sort.

    The physicists, who before that had forced on us the notion of a fiery globe with a molten interior and thin crust on it, had gone round and insisted on a solid globe, and any notion of the shifting of continents was incompatible with that theory. Those ideas held the ground so strongly that it was more than any man who valued his reputation for scientific sanity ought to venture on to advocate anything like this theory that Wegener has nowadays been able to put forward. (Oldham 1923: 180) (Brush, Stephen G. Nebulous Earth: The Origin of the Solar System and the Core of the Earth from Laplace to Jeffreys. Cambridge: Cambridge University Press; 1996; 1 pp. 102-104. A History of Modern Planetary Physics.)

    I cannot help but see parallels (albeit not exact) in the current pluralist vs. orthodox mainsteam economists. Few scientists are able to think outside the specialist box, but when they do new things are frequently discovered:

    As Frankel (1976) noted in connection with Wegener’s theory of continental drift, a theory that ranges over many diverse fields is unlikely to perform as well as a special theory in each individual field, and since most scientists are specialists rather than generalists they judge a theory primarily by how well it accounts for the evidence in their own field. He sees this as the main reason why Wegener’s theory was rejected for several decades even though it had greater overall explanatory power than the established theories in geology, geodetics, paleoclimatology, and biology. (Brush 1996c: 87)

    Comment by Rob Reno— 21 Mar, 2019 #

    • Science is fickle, arbitrary social consensus …

      Comment by Robert S Mitchell— 21 Mar, 2019 #

      • I like that. One way I have come to view it is as a very human endeavour repleat with all the human strengths, creativity, imagination, methodical discipline, along with human weaknesses, such as egotism (hubris, greed, power lust), etc.

        At times consensus can inhibit new paradigms from emerging for less than admirable reasons. Yet, emerge they do over time as old scientists die off and young but upcoming scientists take anomalies seriously and work to establish new facts and theories. Also, I think chance and timing play a role. Yet the crowning glory of science is that over time the interesubjective consensus is self-correcting. So yes, you are right about consensus. At least that is what I have learned from decades of studying the history of evolutionary developmental biology and the history of the earth sciences, the two areas I focused on.

        My daughter’s education in biology was very different than those raised and educated in the pre-evo-devo generation. They grew up with my excitement about emerging discoveries in evo-devo in the early years. Their teachers too were of the epigenetics revolution era.

        Unless one is in the thick of such conceptual shifts it is hard to grasp the conceptual battles that play out in seminars and symposiums ( people yell, swear, insult, all in the name of science!).

        Such is true science as a human endeavour opposed to the idealized polished papers in journals.

        Fickle, arbitray (at times), consensus … I like that.

        Comment by Rob Reno— 21 Mar, 2019 #

  3. Have you read this Lars?

    Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America

    Comment by Rob Reno— 21 Mar, 2019 #

  4. James M. Buchanan, as reality turns out to prove, is a part of a “bevy of camp-following whores.”

    Comment by Rob Reno— 21 Mar, 2019 #

  5. ” in consequence, economists can do nothing but write as advocates for ideological interests………. we have not yet become a bevy of camp-following whores.””
    .
    All very ironic.

    Comment by Henry Rech— 21 Mar, 2019 #


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