Wednesday, November 10, 2004

Sins of the Economists

by Tom Bozzo

Via Marginal Revolution, I see that Deirdre McCloskey has a new essay "The Secret Sins of Economists." (Stop smiling, Brian Leiter!)

A workable joke about economist sins is eluding me -- something about violating the "Law" of One Price by filling up at the more expensive gas station on the corner, maybe, or buying something where the price exceeds the value of its marginal utility. Ah well, not so funny.

I read it, and I can recommend it as one of the better examples of the what's-wrong-with-economics genre, though (or because?) McCloskey's style is a little over the top in places. McCloskey seems more inclined than Leiter, and much more inclined than some of the philosophers Leiter cites, to absolve us of a number of serious but nevertheless venial sins.

As for the mortal sins -- a lack of quantitative precision in theorizing, and a matching obsession with statistical significance testing on the econometric side -- these are legitimate, at least with respect to some practice in the fashionable academic districts.

(Part of my post-election coping mechanism has been to greatly expand my economics literature intake beyond the friendly Journal of Econometrics, in hopes of being a better economist and thus earning enough to survive Bush's "Ownership Society." My delight-to-disappointment ratio is so far zero, though the denominator is still small, and there's a bit of selectivity bias as I do some screening of what I read for possible commercial relevance. In any event, I don't deny McCloskey's indictment, especially as it applies to most empirical results reported in the blue ribbon economics journals.)

Still, criticizing economics for failing to ask and/or answer "how much" questions is indicative of a somewhat blinkered view of the profession. I'd aver that non-academic economists, not to mention some academic stars like Steven Levitt, are primarily concerned with such questions -- as those are our clients' questions -- as opposed to basic qualitative judgments a la "trade good!" or "monopoly bad!" for which we probably could not be paid.
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