Bryan Caplan has inhabited two distant ideological worlds within his profession: mainstream economics and free-market economics:
Despite Berkeley’s far-left reputation, UC Berkeley and Princeton econ were barely distinguishable. Both stood securely at the top of the academic pecking order and squarely in the intellectual center of the discipline. At each school, I studied under a future winner of the coveted John Bates Clark Medal: Matt Rabin taught me intermediate microeconomics at Berkeley, and David Card taught me Ph.D. microeconomics at Princeton. I performed well in both programs, but was no star.
At both Berkeley and Princeton, at least 80% of economics professors presented themselves as technocratic quants who coincidentally happened to be lifelong Democrats. They rarely suggested that their research turned them into Democrats, and would have been livid if you suggested that their Democratic identity even slightly swayed their research. Technocratic quant and lifelong Democrat: From all I’ve heard, these paired identities are now more prevalent than ever not just at Berkeley and Princeton, but every top-twenty econ department. That includes the University of Chicago, formerly a glaring free-market outlier. In mainstream economics, we’re all technocratic quants now — and we’re all lifelong Democrats now.
The biography of a typical mainstream economist starts with a conventional left-wing teenage intellectual from an upper-middle-class home. His parents and school are center-left, but their complacency disturbs him. They pay lip service, while he believes. In college, he discovers economics — and realizes that the world is more complex than he thought. Eventually, the budding economist concludes that a few conventional left-wing views are overstated or mistaken. Support for rent control is a classic example. If you know no economics, rent control sounds like a fine idea: Want the poor to have affordable housing? Then pass a law requiring wealthy landlords to rent at affordable rates. Intro econ highlights rent control’s big negative side effects: shortages, low quality, and dwindling quantity. Politically, though, “a few conventional left-wing views are overstated or mistaken” is normally the end of the line. If you start out as a conventional teenage leftist intellectual, undergraduate economics turns you into a slightly-contrarian twenty-something leftist intellectual.
For most students who fit this profile, admittedly, intellectual curiosity is only a phase. They end up in non-intellectual jobs and turn into their center-left parents. They may even forget that a few conventional left-wing views are overstated or mistaken. The future mainstream economists, however, stay the course. Soon after earning their undergraduate degrees, they continue on to graduate school, where they acquire two new sets of skills.
First, they spend two years grappling with mathematical economic theory. This is demanding material, but too otherworldly to shift grad students’ economic policy views. High theory presents dozens of esoteric ways for markets to fail, but Ph.D. students normally learned all the standard market failures as undergrads. If you’re already deeply worried about imperfect competition, asymmetric information, and externalities, discovering more exotic market failures rarely makes you like markets less.
Second, unless they become pure theorists, grad students immerse themselves in one or two bodies of ultra-specific empirical research. This immersion occasionally shifts economists’ policy views in their areas of specialization. Yet the maximum effect is small because the volume of research is so massive that most economists end up with no more than a few narrow topics of expertise. In all other areas, mainstream Ph.D. students graduate with virtually the same policy views they held when they started grad school. Minor tweaks aside, that’s where they stay for the rest of their careers. They transition from conventional teenage leftist intellectuals to slightly contrarian twenty-something leftist intellectuals to slightly-contrarian mature leftist intellectuals. Possibly with truly contrarian economic policy views in a few ultra-specific areas they know best. Otherwise, mainstream economists barely connect their life’s work to economic policy. When policy comes up, most take off their researcher hat, and put on their slightly-contrarian left-wing intellectual hat.
“The biography of a typical mainstream economist starts with a conventional left-wing teenage intellectual from an upper-middle-class home. His parents and school are center-left, but their complacency disturbs him.”
As far as I can tell, the biography of a typical mainstream economist has a lot of (((parentheses))) around the surnames in his “early life” section.
As far as I can tell, economics is a form of upper-class propaganda. It doesn’t need to follow the facts or have internal logical consistency so long as it blows enough smoke to cover the key abuses.
That description sounds about like what I saw in econ grad school.
Gaikokumaniakku,
What are you trying to tell me? That I can check the “early life” section on their Wikipedia page?
No, Neo. I’m trying to tell you that when you’re ready, you won’t have to.
Funny. However, it’s about Team Keynes and Team Hayek. Of course, both are thoroughly entrenched parts of the mainstream, even if only one can be dominant within it at any given time. Or, as Wapshott titled his book: «Keynes Hayek: The clash that defined modern economics». The “dispute” about primacy of the Market or the State is a big deal in its theological arena, but it’s a formal dance, not a real Guelph vs. Ghibelline grade conflict. Much like other artificial dichotomies, each upholding the Overton Window in its wall. The image of Team Hayek as something new and bold that raises through old asphalt today is as funny as presenting this way the US Outer Party.
The article is named «The Mainstream World Is Not Free-Market». Which directly leads us to a more serious issue: if the economists claim their pastime is a science, the most important question is not how much the abstract Keynes World is the abstract Hayek World, but how much the Real World resembles either.
And that’s what it’s all about. In both parts of the mainstream.
Beyond very basics it’s pretty much what Alexander Zinovyev wrote in “The West”: both mountains of economy papers offer not science, but opportunistic argumentation for policy advice, on two distinct strategies. And as such share a little flaw of… not being truly interactive.
I once (back before twitter purged me) managed to get a “like” from Taleb with a little fable inspired by Zinovyev’s view of the question. I don’t seem to have the page saved, so paraphrasing:
The two Great Schools of Economics can be compared to two gentlemen very eager to tell people time, either of whom owns his own grand clock tower. But their clocks have stopped long ago, about 6 hours apart, and all repair since then is cosmetic.
Either clock shows perfectly accurate time twice per 24 hours. For a few hours more it’s still close enough for practical purpose as far as a lot of people are concerned. Twice as much if you count both (“should have looked at the other one!”). And, of course, often one of these offers an answer at least better than some random dude’s pocket watch that is still ticking, but ran seriously off. Over all of which the owners and their cronies see fit to modestly gloat.
But, of course, both are quite worthless as actual time data providers. Their clocks are long dead, and offer no information which assigning these values to heads and tails and flipping a coin could not provide.
Here’s a simplest model for the observed behavior: their job is to delicately elaborate on the part of the holy doctrine (for two closely related sects) tiptoeing too close to the real world issues (including excuses for failures) and to propagate it, not to take risks revising it. Naturally, the mainstream overdog necessarily must have even less new and bold traits to it than the mainstream underdog.
I tip my hat to Yarvin’s overdog.
Yes, establishment economics is essentially a Potemkin village, and, yes, establishment economists are essentially court Jews, and, yes, Jews make the best court Jews.
It’s much more pleasant to read the flowing, wonderful verbiage of Friedman or von Mises or Marx and argue about things that mean nothing than it is to look at the brutal publicly available USG numbers and ask why they are what they are, or ask what finance is, or follow the money. Some soils are much more profitable on which to found a long and prosperous career safely masturbating oneself to completion in the ivory tower.
The epicentral question of real economics is as simple and brutal as USG’s numbers: Who shall work for whom?