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December 05, 2006

I, For One, Do Not Welcome Our Economist Overlords. But I Like Reading Their Papers.

I'm sort of baffled by all this talk that economists are poorly treated by the public at large. Robin Hanson wants the credulity he imagines physicists have. On the other hand, Robin Hanson also wants to restructure health care and economic policy, while physicists tend to just tell me the universe is cool, so the increased skepticism Hanson is sensing may just be the natural tension engaged when he tries to screw with people's lives.

Physicists aside, economists strike me as the best treated of all the sciences engaging with the public realm. When's the last time you saw a major paper quote a sociologist's views on a serious matter of public policy? That some scientists are treated with a credulous curiosity as they theorize about alternative universes is not the same thing. If physicists ever deploy string theory to try and eliminate the minimum wage, you'll see a rather more hostile reaction.

Meanwhile, the fact that this stuff is coming from Hanson proves why economists don't get to simply pronounce on matters of public policy. Hanson is a sort of self-styled, contrarian genius whose website pronounces that "I have a passion, a sacred quest, to understand everything, and to save the world. I am addicted to "viewquakes", insights which dramatically change my world view." All of which is well and good, but it means his career has been based on arguing that everyone else -- economists included -- are going about things all wrong. In other words, economists disagree with each other and routinely turn out to be wrong. That their disputes are empirical and their mistakes rigorously implemented isn't much comfort.

More: self-described "recovering economist" Echidne has more on the silliness of all this and Megan (rapidly becoming one of my favorite, self-critical economists) has more on the "white-collar welfare" that is modeling.

December 5, 2006 in Economics | Permalink

Comments

I would think the point here is that Economics is not a science.

Posted by: weboy | Dec 5, 2006 11:48:37 AM

To put what weboy might mean another way, economics is a science, just not as successful a science as physics. Economics makes empirical claims and tries to subject them to empirical verification, but that's not easy, as the subject matter is so messy. Physics is successful in large part because the phenomena it centers on are very simple in comparison to those other sciences deal with. The more complex the subject becomes, the less successful the science, even within physics. Sociology is even more complex than economics in the ways that matter scientifically. To the extent empirical tests are lacking, a field is more prone to philosophizing, i.e. spinning out plausible theories based on intuitive appeal, which isn't a very reliable way to get at the truth of things in controversial areas, comparatively speaking. A study of the history of physics show this in very striking ways.

Physicists and other hard scientists do enter into public policy in myriad ways, but since their advice is almost always uncontroversial, we don't have cause to complain, or even notice. That is, when we build a bridge, we rely on engineers; when we print money we use various hard sciences to add security. If economics were a more successful science, we wouldn't have so much cause to complain when an economist "tries to screw with people's lives." It's not the entering into public debate, which unavoidably involves economics, but the lack of success.

Posted by: Sanpete | Dec 5, 2006 12:38:44 PM

"When's the last time you saw a major paper quote a sociologist's views on a serious matter of public policy?"

You're well read, so surely you've heard of the multi-paper joint venture to find and publish intelligent quotations by sociologists concerning vital issues of the day? As I remember, it was during the '90s, and the papers were heavyweights, including the LA and NY Times, Washington Post, one of the Chicago papers, and others (the WSJ refused to participate). Each assigned several staffers full time. Went on for about 3 years. In all that time they couldn't find a single usable quotation, so they folded their tents and went home.

Posted by: ostap | Dec 5, 2006 1:06:26 PM

"Robin Hanson wants the credulity he imagines physicists have"

I suspect it's credibility that Hanson wants. Sounds like he's probably got enough credulity already.

Posted by: jackd | Dec 5, 2006 1:35:27 PM

two krugman articles on economic models I think are good:

http://web.mit.edu/krugman/www/dishpan.html

http://www.pkarchive.org/trade/company.html

the concept of an open systen (like a company trying to increase sales) and a closed system (like a crowded parking garage) I found really important, and taught me a lot.

Posted by: roublen | Dec 5, 2006 2:07:10 PM

You raise some excellent points. Most of us focus on the fact that physics is a harder science than economics, and so it's possible to overlook that people just argue a lot about things that actually effect them.

Also, I found echidne's post that felt economists wanted nothing less than for all to accept their math without understanding it and thereby do what they say, to be insulting to all of academia.

Posted by: Tony v | Dec 5, 2006 2:11:05 PM

I think that maybe there was a significant anti-economics movement (in the sense of many people questioning the legitimacy of economics as a discipline, not just specific models) in the mid-1990s, but I don't see much of it anymore.

One must expect, of course, that people -- from journalists to electricians to economists to farmers to doctors -- will whine about how hard done-by their profession is -- no one thinks they receive enough respect, money, prestige, or whatever -- but that's just how life is, sometimes. I don't think that economists are either particularly victimized by public skepticism nor do they really perceive themselves as such, at least to any greater extent than other professions.

Posted by: Julian Elson | Dec 5, 2006 2:16:33 PM

Tony v, my post is a sarcastic one, and largely directed to the initial comments that Hanson made. But it is also somewhat motivated by the "economist imperialism" movement that I was exposed to during my training.

Posted by: Echidne | Dec 5, 2006 2:30:53 PM

I was reading something this morning (can't remember what) that repeatedly referenced a chart, graph or model in a sidebar. I wondered if it would be worth my time to try to sort out the meaning of the multi-directional arrows etc. which were as obscure to me as my astrological chart or i-ching or tarot spread would be. Obviously I decided it wasn't worthwhile since I can't even remember the text at this point.

Communicating with arcane graphs to the initiated is one thing. If someone wants to their ideas broadcast to a larger audience they should communicate in a language that audience will understand easily enough to pique their interest. If they consider doing so beneath them, then stop complaining about being ignored.

PBS's NOVA series on string theory made physics fun and interesting. Could economists do something similar?

Posted by: Emma Zahn | Dec 5, 2006 2:34:10 PM

I have some further thoughts on the question why economic models attract more debate than physics models, for example.

One reason why students, say, don't accept some economic models right away is that most models make a large number of specific assumptions which don't match some real world circumstances, and those are the circumstances which are most familiar to us.

For example, take the perfectly competitive model with its assumptions of a homogeneous product (like flour or sugar, perhaps) and many atomistic sellers and buyers with perfect information on the prices (the only aspect which matters if quality is constant) and no barriers to entry (such as the need to qualify or the need for the money to start a large factory). If you teach that model and its predictions, a student may try to compare the results to his or her experiences with the oil industry or the labor markets and so on, and the model then looks pretty weak. To point out real world examples of markets which come close to perfectly competitive markets helps, but then those examples don't cover very many actual situations.

So the difficulty is in some ways that we all have some experience with how more complicated markets might function, and it's hard to ask people to start with something simpler. The real problems is that many introductory courses don't get to the more realistic models in any great detail, and that leaves some students with the idea that they can analyze anything with the simpler models they were taught, and that these models are the right ones in all circumstances, and even somehow more correct than any actual data from real markets.

Posted by: Echidne | Dec 5, 2006 2:53:37 PM

One thing that seems to be missed in this comparison, is that when Robert Hanson talks about Physics models dealing with 11 dimensions he is talking about a very controversial model in physics. At least as controversial as the minimum wage unemployment debate.

So all the talk about physics models being different than economic models is missing the point. Both are complex, both are controversial, but one is reported differently then the other (acording to Kaplan anyway, and it seems that way to me as well.) Criticism of Hanson that his models are not as good is probably unwarrented, his example was quite good.

I think Ezra has hit on one point, economics matters more than theoritical physics. Whatever the physics gurus come up with, we pretty much expect that the sun will come up tomorrow and gravity will still work. Economic predictions have more immediate effect on our lives.

I also think Echidne has hit close to an important point. I expect that students of physics and students of economics have pretty much the same expirience, but I think that most people think they know more about economics then they know about physics, especially theoretical physics. We have to deal with economics all the time, while physics just take care of themselves. I expect that this leads to a lot of people who know a whole lot less about the subject then they think they do, but it does leave them free to cast judgement on economic models where they would not on physics models.

I certainly think it would be beneficial if more people knew more about economics, but I am far from sure that the lack of trust economists have is a bad thing.

Posted by: Dave Justus | Dec 5, 2006 3:06:23 PM

It is a pleasure to see a reasoned discussion here, instead of the waves of undisciplined emotion at Kevin Drum's Political Animal.

I agree with Echidne and Dave, that economics is treated more skeptically primarily because people care about its topics more. That was in fact my original point, which has been lost in the single paragraph excerpt that has received so much attention.

Posted by: Robin Hanson | Dec 5, 2006 3:43:02 PM

P.S. I've published in physics as well as economics, and just as many of my "viewquakes" have been regarding physics as regarding economics.

Posted by: Robin Hanson | Dec 5, 2006 3:44:54 PM

I was mostly trying to be cute, but Sanpete's "restatement" of my thinking, while interesting isn't quite it. I think Economics is useful, as a study, but I don't by claims of "science" at least not as we understand that term. I think the study of Economics has been placed, by those in the Academy in the place it belongs - as part of the Liberal Arts disciplines, or in Business Schools. I think Economics, like Sociology and a few others ("Political Science" is an obvious one) suffer from Psychology envy (heh heh, I made an intellectual funny) - that is, Psychology is the libeeral arts/socialscience discipline that somehow got itself taken seriously by the "Real Science" departments - Bio, Chem, Physics - so why can't they? You can hear their arguments "We do studies, we have peer review, we're really really rigorous" as if that's what it took. And it's not.

I think Economics is fascinating, and the seriousness with which the discipline takes itself speaks well of its intentions. But this is not a scientific study, it is a theoretical one, and we shouldn't conflate what they do as "scientific" because it does a disservice to both sides. (Maybe it's cause my Mom spent her life in the University and in the Allied Health Professions - Nursing, OT, PT, etc - that I have an insider/outsider perspective on this... you should hear those social "scientists" take themselves so seriously, and look so pompous in going about it.)

I don't care really, what economists want to think of themselves as; if it helps puff up their resumes to use their PhD's to call themselves "Doctor," so be it. Universities have a lot of that. But I think it's damaging to lay people and people unfamiliar with the sciences to blithely accept the notion that economics is a science. And it ain't helping the economy, either. :)

Posted by: weboy | Dec 5, 2006 3:53:04 PM

Sorry Echidne, I apologize for my confusion.

This discussion between physics and economics does humorously remind me of the Black Scholes Equation, a way of pricing options that won its derivers the nobel prize.

Only after the prize was given was it determined that this equation was a simple transformation of the heat equation from physics.

http://en.wikipedia.org/wiki/Black-Scholes

Posted by: Tony v | Dec 5, 2006 4:27:34 PM

Whoa there sport!

Physicists aside, economists strike me as the best treated of all the sciences engaging with the public realm.

I almost spewed coffee on my keyboard, you bastard. Economics and economists are not part of the sciences. Physicists are, biologists are, astronomers, cosmologists, etc, etc, all that is science. Economics is politics and greed writ into pseudoscientific jargon in an attempt to vampirically attempt to suck some legitimacy into their fevered fantasies. Economics is not science and economists are not scientists.

Economics is "science" the way astrology or phrenology or creationism/Intelligent Design is "science". The fact that the followers or practitioners of such nonsense realms my snatch this bit of science or that bit of science from legitimate science in a vain attempt to make their rantings seem logical or legitimate doesn't in any way make them so.

Start from there, THEN make the rest of your points accordingly.

Posted by: Terminus Est | Dec 5, 2006 4:48:16 PM

Incidently, I am a practitioner of real science: molecular biology/biochemistry. As such, I am part of a sub-speciality of another real science: chemistry. Chemistry is a stepchild of physics: physics in everyday action.

Economists aren't even in the same area of University, let alone in the same set of buildings. Perish the thought! (Shudder)

Posted by: Terminus Est | Dec 5, 2006 4:58:03 PM

I think Ezra has hit on one point, economics matters more than theoritical physics. Whatever the physics gurus come up with, we pretty much expect that the sun will come up tomorrow and gravity will still work. Economic predictions have more immediate effect on our lives.

I agree with Echidne and Dave, that economics is treated more skeptically primarily because people care about its topics more.

But, as I was saying less plainly earlier, this just isn't true, as far as I can tell. We depend on the results of applied physical theory 24 hours a day. Technology depends on it. We don't complain about its intrusions into our practical lives the same way we do with economic theory because, unlike economic theory, physics actually produces very reliable, very useful theories that we don't need to worry about. If practical electrical and physical theory were controversial in the ways economic theory is, it would be regarded in a similar way.

We should expect a controversial but respected theory in physics to be regarded differently than a controversial but respected theory in economics. The prospects for the two are very different.

Weboy, what do you understand by your distinction between the scientific and the theoretical? Science includes theory, of course. I think the key difference between science and nonscience is the empirical nature of the claims and the tests for them. Economics is essentially empirical, just not very successfully.

Posted by: Sanpete | Dec 5, 2006 5:01:21 PM

I think the key difference between science and nonscience is the empirical nature of the claims and the tests for them. Economics is essentially empirical, just not very successfully.

I suppose Sanpete, I could compromise on calling Economics "bad science." :)

But seriously, I said "theoretical" for want of a better word - my main point is that Economics, while possibly one of the "social" sciences, is, like the rest of them, not really a science. A study of something, to be sure, but not scientific (Economicology?). I think those who passionately tout sociology along these lines face the same problem; and I for one, think Psychology flim-flammed its way into the Science building, but it's there, and I think the main lesson is... the other ones are not getting in nearly so easily. :)

Posted by: weboy | Dec 5, 2006 5:52:09 PM

Sanpete, the physical sciences matter, but not via the public's beliefs about them. The public doesn't care why the devices it uses work. Social beliefs, in contrast, are posed to the public as things they should believe, which often contradict other things they believe.

Posted by: Robin Hanson | Dec 5, 2006 7:04:41 PM

Weboy, I can't tell from what you say why you don't think economics is a science. Maybe if you said what you mean by science it would help.

Robin, I don't think I understand how what you say connects with what I've been saying. In any case, if physical science were in the condition economics is in terms of settled theory and practice, it would be equally controversial and would attract as much public concern and debate any time a major public venture requiring application of physical theory arose (which would be all the time). In a democracy that would mean what the public believes about them would matter. Those on various sides of the issues would try to sway the public and tell them what they should believe and why. And their beliefs might well contradict each other. Many physicists also have beliefs about physics that appear not to be self-consistent.

But as I say I'm not sure how these points are intended to relate to the point that physics and economics are regarded differently not because the latter isn't relevant to what people care about but because it just doesn't produce reliable results.

Posted by: Sanpete | Dec 5, 2006 7:56:11 PM

I'm always amazed when the Nobel-like prize for economics (NB: Nobel had more sense than to actually endow a prize for economics) is awarded, it's usually for something like demonstrating that saving over a lifetime is the best way to build up retirement income. By contrast, a Nobel prize in physics will be for something like, detected the residue of the big bang.

Posted by: Doh | Dec 5, 2006 9:02:01 PM

Posted by: Sanpete | Dec 5, 2006 9:38:44 AM


To put what weboy might mean another way, economics is a science, just not as successful a science as physics.

Posted by: weboy | Dec 5, 2006 12:53:04 PM

I think Economics, like Sociology and a few others ("Political Science" is an obvious one) suffer from Psychology envy (heh heh, I made an intellectual funny) - that is, Psychology is the libeeral arts/socialscience discipline that somehow got itself taken seriously by the "Real Science" departments - Bio, Chem, Physics - so why can't they?

I think both weboy and sanpete are bumping up against different sides of the same elephant and one is calling out snakelike for the trunk while the other is calling out treelike for the hindleg.

The traditional marginalist economics that dominated the second half of the 20th century has physics envy. It wants to be a social physics. Indeed, its core analytical model, the original metric utility model, was adopted directly from pre-Laws of Entropy Thermodynamics. Heck, when we work through it in class, we still use lambda as the dummy variable to convert a bounded maximization into an unbounded maximization in honour of Lagrange, and draw by name on the work of Laplace and their predecessor L'Hospital.

But trying to act like physicists when the population of interest consists of unique individuals engaged in constant interaction with others and possessing characteristics evolving over millions of years, including characteristics allowing them to work together in groups without constantly evaluating whether to cooperate or defect, begs the question ... is that the scientific thing to do?

A common critique of a number in the Post Autistic Economics movement is that it is not the scientific thing to do. An Economist that aspires to be a scientist ought to have biolology envy.

Indeed, the blog by Megan shows part of the way that traditional mainstream economics manages to get by despite frequently adopting anti-sicentific habits of behavior. Megan cites a claim about the serviceability of models, and then talks about how the claim does not really capture what is going on about models ... and all the time it is clear that the models in the quote and the models in Megan's experience are two quite different beasts. The models in the quote are the analytical models that traditional marginaliste build and then analyse in lieu of doing scientific theory about the material provisioning of society. The complex computer "models" of aspect X, Y or Z of the economy that Megan is talking about is the ad hox response to the demand to realize the scientific sounding claims of the scientific appearing mathematical manipulations. They are not scientific models, but rather simulcra, and as described in detail by Robert Rosen in Anticipatory Systems Theory, they must inevitably diverge from the system they are emulating in ways that cannot be detected from within the simulcra, and therefore be reset and retuned on an ad hoc basis.

And why is it that the mathematical manipulations are not scientific? Because they do not feel compelled to anchor their formal assumption in the characteristics of the systems that they are studying. And therefore their most rigorous conclusions show us that if we were to start at point A, a place that we are not necessarily at, operating under laws of motion that do not necessarily apply, we would possibly arrive at point B, supposing that some possible roadblocks that are well understood do not intervene. It is the economics of life on Mars, if Mars was inhabitable and inhabited by intelligent tigers capable of but not necessarily drawn to social interaction.

It is, in brief, and with a far smaller vocabulary than brief, not an Evolutionary Science, when it perforce must be if it aspires to be a science at all.

Posted by: BruceMcF | Dec 5, 2006 11:56:03 PM

economics is a science, just not as successful a science as physics

Yes. In much the same way that shamanism is "just not as successful" as epidemiology.

Posted by: sglover | Dec 6, 2006 12:22:20 AM

I find that Economists, their work & the level of respect they recieve, correlates highly with how their work jibes with people's political sympathies.

Posted by: DRR | Dec 6, 2006 1:17:41 AM

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