A few years ago at an interdisciplinary conference I met an English professor and, in a spunky mood, asked "So why do you guys hate us economists?" I fully expected to hear "Oh we don’t hate you, though we do think you mistaken about …" But in fact he said "You know why." I have since received similar reactions from other academics, sometimes in their words but more often in their eyes – their dislike for economics goes way beyond the
The answer is, of course, "Most and nearly all, but with timing questions." It was obvious that the housing market was an unsustainable bubble, driven by loans that depended on the bubble's being sustainable. The only surprise was that it lasted as long as it did before collapsing. The market can stay irrational longer than you can stay solvent.
If the majority of any developed country learns the basics of microeconomics, come back and make that post again. If you can get ten countries to enact no mercantilist policies for ten years, come back and make that post again. Heck, read The Myth of the Rational Voter by Bryan Caplan, take his list where the public is both ignorant and biased on 32/33 economic issues, fix one, then come back and make that post again.
People are learning to dismiss economists because they have no predictive powers. There are some useful aspects of economics (e.g., microeconomics) but that's old news. People are interested in what you can do for them _today_.
Economists are poorer than weathermen at prediction. They cost us a lot of money if we listen to them. How many economists predicted the credit crisis? The LTCM collapse? The 1987 collapse? The savings & loan crisis?
The answer is, of course, "None or very few, and never with consensus." Economics has no predictive power and likely never will. But these people still come out of universities, put on suits and ties, call a press conference and try to tell us what the economy will do.
Perhaps Shakespeare was off a bit: Dick the Butcher should have said "The first thing we do, let's kill all the economists."
Thanks to Nassim Nicholas Taleb for explaining this in his excellent book "The Black Swan".
"Economists model the world with numbers, something that non-mathematicians and non-economists feel is emotionally insensitive. This one is probably the biggest reason. Normal people don't understand the effectiveness of a mathematical model in showing how others behave. This is mostly because people don't understand math."
And yet, I don't sense a lot of love from the physical sciences directed toward economics. Or rather, I've occasionally encountered strong opinions directed, in student days, against economists from those quarters, some derision that economics is a soft science, despite the fact that they use math. The numbers aren't so easy to measure, and their physical signficance and relationships are not always clear to everyone (outside the field) or justified. The theories are difficult to falsify. Bad science is easier to refute than bad economics, and economics (good or bad) is often used to make or justify policy. Economic theory has been the basis for political systems in fact, and those lasted longer than the Jacobins.
Personally, I think macroeconomics is by nature closer to engineering than science. That is, it's a business of lumping individual behavior into state variables and running through the differential equations to evaluate credible scenarios. I never read as much I intend to, or as much as would help me, but it's certainly the seed of my interest.
K (haven't lurked, but couldn't resist a comment--small world, FB.)
Your reply is basically standard Libertarian ideology; I used to be one myself, so I understand it quite well.
>Market relations comprise the whole of voluntary relations.
Um...the whole of voluntary relations? I don't think so. To give just a few counter-examples; family-ties, friendships and sexual relationships are not based entirely on contractual exchanges, not even implicit ones.
>For me "Authoritarianism" is someone using violence and threats of violence to coerce others to conform to their ideal of human behaviour;
No, Authoritarianism just means that some relationships are based on relative status, rather than contractual exchanges. Examples; a solider directing his unit against the enemy, a policeman stopping a burgler, a fireman yelling orders to his team. I think you can agree in some cases, authoritarianism is justified.
>"The market judges everything solely in *functional* terms (ie the external uses of things)."
>I have absolutely no idea what this is supposed to mean. The market cannot judge anything in any way as it is not a conscious, purposeful agent - it has no judgements or opinions.
Let me rephrase: A person who tries to define the whole of human relationships in terms of contractual exchanges can only assign value to something on the basis of its external behaviour or use. Contractual exchanges can't recognize intrinsic worth. This shows the big limitation of the market.
Yes, Richard, I have found those conversations, and to be fair, I will re-phrase:
"economists have done next to nothing to utilize the freedom of software movement and open source projects as possible new evidence that might change underlying economic theories."
Of the conversations about open source software that I've found, most economists do one of two things. They take the position of anonymous above and point that, well, most of the *important* projects have paid members or work just like regular businesses--the code being "free" is just a business model. Or, they point out that really all these programmers are new businesses operating in markets that have a low to no threshold of entry.
What is *really* happening is that a fundamental economic assumption is being brought into question. "Economics is the study of the distribution of scarce resources." You will find that sentence in any basic economics textbook. Only the resources that we are talking about in the information age: ideas, art, attention; are not resources that are at all scarce. If anything, they are resources growing at enormous rates. What does economics have to say about the distribution of non-scarce resources? I defy you to find me one economist yet willing to take on that hypothesis: that some resources are (relatively) non-scarce and that a distribution system for those resources *might* be fundamentally different from traditional capital models. I don't have an opinion one way or the other yet, but I haven't seen anyone else asking the question either. I could be wrong, and if I am, by all means let me know who's doing the research; I would love to follow their work.
The question has come up as a topic worthy of scientific study, in a 1993 paper by Frank, Gilovich, and Regan, "Does Studying Economics Inhibit Cooperation?". The results suggest that people who study economics tend to be more selfish and less honest:
Scarth: the individualist and rationalist world-view is the correct one.Oh good, glad that is settled.
This is the sort of statement that brings up my hatred: not exactly of economists, but of simple-minded libertarianism. It's a set of ideas that has the power to make intelligent people (I see Scarth has a Ph.D. in mathematics) capable of making deeply stupid statements like the above and the even more risible: Market relations comprise the whole of voluntary relations. when we just were discussing open source and peer production, which is voluntary but non-market-based under any meaningful interpretation of the term. Hate! But again, of the belief system and not the believers, who seem like victims of a pernicious memeplex.
Economists are viewed with contempt as a group, just as lawyers are viewed with contempt as a group. A small number of ambulance-chasers or corporate lawyers defending sleazebag practices give the entire profession a bad name, the equally mercenary economists who work in lobbying groups or think tanks do the same for economists.
I think there's more to it than that. Lawyers are necessary to accomplish all sorts of things in our society, not because lawyers are inevitably required, but because our society has been set up so that they are required.
All lawyers, whether reasonable or not, perpetuate and reinforce the systems that make the existence of so many lawyers necessary. They are hated partly because they are accurately perceived as parasites on society as a whole; they exist because they are needed, but they are needed only because they exist.
mjgeddes - "Perhaps because some economists try to reduce everything to market exchanges?...there are two other general types of human relations which have nothing to do with market exchanges (Communitarianism - community/group-based and Authoritarianism - status based)"
I don't really understand your view of what markets are, and I find your comments confusing because they contradict what I understand by markets. For me, a market is a collection of institutions and customs within which individuals (and coalitions of individuals) voluntarily co-operate, exchanging goods and services. For me there are basically two types of human relations - voluntary and coerced. Market relations comprise the whole of voluntary relations. I am aware that this is broader than is usually understood, but I'm not able to define markets more narrowly without drawing an arbitrary line. For example there is much more continuity between prostitution and other forms of consensual sex than we might perhaps like to think. For me "Authoritarianism" is someone using violence and threats of violence to coerce others to conform to their ideal of human behaviour; a communitarian is an authoritarian who really does believe that they're doing it in your best interests - I can't see any other difference. There is a legitimate role for coercion in human relations - murderers and rapists do exist and it is right that violence and coercion be used against such people. However generally, the use of coercion should be as minimal as possible.
"The market judges everything solely in *functional* terms (ie the external uses of things)."
I have absolutely no idea what this is supposed to mean. The market cannot judge anything in any way as it is not a conscious, purposeful agent - it has no judgements or opinions.
"According to the 'market-exchange' view of the world there is no difference in value between an unconscious robot cleaning a toilet and a human doing the same job."
I've no idea how you come to this view. If you suppose that all the person getting their toilet cleaned cares about is how clean their toilet is, and the human and the robot clean the toilet to exactly the same standard then there is no difference in the value of the job done by the human and the robot. So what? What reason do you have to suppose that a human and a robot provide exactly the same cleaning service, or that the person getting the toilet cleaned cares only about how clean their toilet is? Your comment is just facile.
I don't mean to pick on you mjgeddes, but your views do seem (in my experience) to be representative of much anti-market/anti-economics thinking. They are based on a misunderstanding of what markets are and what economics studies.
Economics is not value neutral. It is based on an individualist and rationalist world-view. But then so is Physics. That the laws of physics are the same for all observers would have been considered absurd by Xerxes the Great - that's why he had the sea whipped and fettered after a storm destroyed his bridge over the Hellespont. Xerxes' modern equivalents want markets whipped and put in fetters when storms blow up and ruin their plans - they are just as foolish and wrong-headed as Xerxes was; the individualist and rationalist world-view is the correct one.
@Daniel Reeves: The lingo creates a barrier of entry.
Indeed. One irritated commenter, apparently quite familiar with economics, put down a lesser-informed writer by saying: "By the way, do you have any numbers on the g-loading of spelling? The g-loading of spelling on the right hand tail? Please do share.. Doctors do this all the time. It's the equivalent of speaking a foreign language, and then blaming the listener for failing to understand.
There are plenty of reasons why people "hate" economists, in my opinion.
1) Economists model the world with numbers, something that non-mathematicians and non-economists feel is emotionally insensitive. This one is probably the biggest reason. Normal people don't understand the effectiveness of a mathematical model in showing how others behave. This is mostly because people don't understand math
2) Dissenters dislike that most economists agree on a few issues. This one is probably held by progressives (free trade) and anti-tax populists (the gas tax).
3) Economists may be seen as "out of touch" or even "greedy." This one is held by people who don't understand association biases or simply don't know what economists do in the first place, which may be more frequent than one might expect (I had to explain to my mom that economics requires lots of math). Those in the latter category probably lump economics with business and marketing.
4) The lingo creates a barrier of entry. For example, my dad claimed that a 5% drop in consumption and a 20% drop in price of oil meant that there was a speculative bubble. So I had to try to explain elasticity to him, except that was pretty hard without simply using the term. In the field, jargon is a handy shortcut. When talking to people who don't know better, it isn't.
"The economists who actually manage our economy don't seem to think that way" -Brian Jaress
The fact that you believe economists manage our economy gives me reason to doubt your other beliefs on the subject.
"Among rational thinkers, I don't think there's a particular "hate" for economists. There is a strong disdain, however, given that beyond simple applications of the basic concepts in micro and macroeconomics, the field has almost zero predictive capacity. This makes it fundamentally unscientific, fundamentally unreliable, and unappealing to rational thinkers." -Alan Yeung
I often here people say that economists can't predict what the market will do and so they are bad scientists. I wonder if you would apply the same reasoning to physicists? Do we make fun of physicists for not knowing if it is going if there is going to be an Earthquake next year or when the next tornado is going to strike? If physicists study matter and energy, shouldn't they be able to predict what the world will do like we expect economists to predict what the market will do? Isn't predicting what particles will do even more simple than predicting what humans will do?
I think "hate" is excessive. Economists are viewed with contempt as a group, just as lawyers are viewed with contempt as a group. A small number of ambulance-chasers or corporate lawyers defending sleazebag practices give the entire profession a bad name, the equally mercenary economists who work in lobbying groups or think tanks do the same for economists. They just tend to be more visible than most.
Heh: "Economists were created to make weather forecasters look good."
- http://www.guardian.co.uk/m...
The answer is, of course, "Most and nearly all, but with timing questions." It was obvious that the housing market was an unsustainable bubble, driven by loans that depended on the bubble's being sustainable. The only surprise was that it lasted as long as it did before collapsing. The market can stay irrational longer than you can stay solvent.
If the majority of any developed country learns the basics of microeconomics, come back and make that post again. If you can get ten countries to enact no mercantilist policies for ten years, come back and make that post again. Heck, read The Myth of the Rational Voter by Bryan Caplan, take his list where the public is both ignorant and biased on 32/33 economic issues, fix one, then come back and make that post again.
People are learning to dismiss economists because they have no predictive powers. There are some useful aspects of economics (e.g., microeconomics) but that's old news. People are interested in what you can do for them _today_.
Economists are poorer than weathermen at prediction. They cost us a lot of money if we listen to them. How many economists predicted the credit crisis? The LTCM collapse? The 1987 collapse? The savings & loan crisis?
The answer is, of course, "None or very few, and never with consensus." Economics has no predictive power and likely never will. But these people still come out of universities, put on suits and ties, call a press conference and try to tell us what the economy will do.
Perhaps Shakespeare was off a bit: Dick the Butcher should have said "The first thing we do, let's kill all the economists."
Thanks to Nassim Nicholas Taleb for explaining this in his excellent book "The Black Swan".
Maybe it has something to do with this study?
"Economists model the world with numbers, something that non-mathematicians and non-economists feel is emotionally insensitive. This one is probably the biggest reason. Normal people don't understand the effectiveness of a mathematical model in showing how others behave. This is mostly because people don't understand math."
And yet, I don't sense a lot of love from the physical sciences directed toward economics. Or rather, I've occasionally encountered strong opinions directed, in student days, against economists from those quarters, some derision that economics is a soft science, despite the fact that they use math. The numbers aren't so easy to measure, and their physical signficance and relationships are not always clear to everyone (outside the field) or justified. The theories are difficult to falsify. Bad science is easier to refute than bad economics, and economics (good or bad) is often used to make or justify policy. Economic theory has been the basis for political systems in fact, and those lasted longer than the Jacobins.
Personally, I think macroeconomics is by nature closer to engineering than science. That is, it's a business of lumping individual behavior into state variables and running through the differential equations to evaluate credible scenarios. I never read as much I intend to, or as much as would help me, but it's certainly the seed of my interest.
K (haven't lurked, but couldn't resist a comment--small world, FB.)
Robin, Can you at least tell us why that person said they hated economists? I'm curious.
Hi Robert,
Your reply is basically standard Libertarian ideology; I used to be one myself, so I understand it quite well.
>Market relations comprise the whole of voluntary relations.
Um...the whole of voluntary relations? I don't think so. To give just a few counter-examples; family-ties, friendships and sexual relationships are not based entirely on contractual exchanges, not even implicit ones.
>For me "Authoritarianism" is someone using violence and threats of violence to coerce others to conform to their ideal of human behaviour;
No, Authoritarianism just means that some relationships are based on relative status, rather than contractual exchanges. Examples; a solider directing his unit against the enemy, a policeman stopping a burgler, a fireman yelling orders to his team. I think you can agree in some cases, authoritarianism is justified.
>"The market judges everything solely in *functional* terms (ie the external uses of things)."
>I have absolutely no idea what this is supposed to mean. The market cannot judge anything in any way as it is not a conscious, purposeful agent - it has no judgements or opinions.
Let me rephrase: A person who tries to define the whole of human relationships in terms of contractual exchanges can only assign value to something on the basis of its external behaviour or use. Contractual exchanges can't recognize intrinsic worth. This shows the big limitation of the market.
@Richard Hollerith
Yes, Richard, I have found those conversations, and to be fair, I will re-phrase:
"economists have done next to nothing to utilize the freedom of software movement and open source projects as possible new evidence that might change underlying economic theories."
Of the conversations about open source software that I've found, most economists do one of two things. They take the position of anonymous above and point that, well, most of the *important* projects have paid members or work just like regular businesses--the code being "free" is just a business model. Or, they point out that really all these programmers are new businesses operating in markets that have a low to no threshold of entry.
What is *really* happening is that a fundamental economic assumption is being brought into question. "Economics is the study of the distribution of scarce resources." You will find that sentence in any basic economics textbook. Only the resources that we are talking about in the information age: ideas, art, attention; are not resources that are at all scarce. If anything, they are resources growing at enormous rates. What does economics have to say about the distribution of non-scarce resources? I defy you to find me one economist yet willing to take on that hypothesis: that some resources are (relatively) non-scarce and that a distribution system for those resources *might* be fundamentally different from traditional capital models. I don't have an opinion one way or the other yet, but I haven't seen anyone else asking the question either. I could be wrong, and if I am, by all means let me know who's doing the research; I would love to follow their work.
The question has come up as a topic worthy of scientific study, in a 1993 paper by Frank, Gilovich, and Regan, "Does Studying Economics Inhibit Cooperation?". The results suggest that people who study economics tend to be more selfish and less honest:
http://www.gnu.org/philosop...
Scarth: the individualist and rationalist world-view is the correct one.Oh good, glad that is settled.
This is the sort of statement that brings up my hatred: not exactly of economists, but of simple-minded libertarianism. It's a set of ideas that has the power to make intelligent people (I see Scarth has a Ph.D. in mathematics) capable of making deeply stupid statements like the above and the even more risible: Market relations comprise the whole of voluntary relations. when we just were discussing open source and peer production, which is voluntary but non-market-based under any meaningful interpretation of the term. Hate! But again, of the belief system and not the believers, who seem like victims of a pernicious memeplex.
Economists are viewed with contempt as a group, just as lawyers are viewed with contempt as a group. A small number of ambulance-chasers or corporate lawyers defending sleazebag practices give the entire profession a bad name, the equally mercenary economists who work in lobbying groups or think tanks do the same for economists.
I think there's more to it than that. Lawyers are necessary to accomplish all sorts of things in our society, not because lawyers are inevitably required, but because our society has been set up so that they are required.
All lawyers, whether reasonable or not, perpetuate and reinforce the systems that make the existence of so many lawyers necessary. They are hated partly because they are accurately perceived as parasites on society as a whole; they exist because they are needed, but they are needed only because they exist.
mjgeddes - "Perhaps because some economists try to reduce everything to market exchanges?...there are two other general types of human relations which have nothing to do with market exchanges (Communitarianism - community/group-based and Authoritarianism - status based)"
I don't really understand your view of what markets are, and I find your comments confusing because they contradict what I understand by markets. For me, a market is a collection of institutions and customs within which individuals (and coalitions of individuals) voluntarily co-operate, exchanging goods and services. For me there are basically two types of human relations - voluntary and coerced. Market relations comprise the whole of voluntary relations. I am aware that this is broader than is usually understood, but I'm not able to define markets more narrowly without drawing an arbitrary line. For example there is much more continuity between prostitution and other forms of consensual sex than we might perhaps like to think. For me "Authoritarianism" is someone using violence and threats of violence to coerce others to conform to their ideal of human behaviour; a communitarian is an authoritarian who really does believe that they're doing it in your best interests - I can't see any other difference. There is a legitimate role for coercion in human relations - murderers and rapists do exist and it is right that violence and coercion be used against such people. However generally, the use of coercion should be as minimal as possible.
"The market judges everything solely in *functional* terms (ie the external uses of things)."
I have absolutely no idea what this is supposed to mean. The market cannot judge anything in any way as it is not a conscious, purposeful agent - it has no judgements or opinions.
"According to the 'market-exchange' view of the world there is no difference in value between an unconscious robot cleaning a toilet and a human doing the same job."
I've no idea how you come to this view. If you suppose that all the person getting their toilet cleaned cares about is how clean their toilet is, and the human and the robot clean the toilet to exactly the same standard then there is no difference in the value of the job done by the human and the robot. So what? What reason do you have to suppose that a human and a robot provide exactly the same cleaning service, or that the person getting the toilet cleaned cares only about how clean their toilet is? Your comment is just facile.
I don't mean to pick on you mjgeddes, but your views do seem (in my experience) to be representative of much anti-market/anti-economics thinking. They are based on a misunderstanding of what markets are and what economics studies.
Economics is not value neutral. It is based on an individualist and rationalist world-view. But then so is Physics. That the laws of physics are the same for all observers would have been considered absurd by Xerxes the Great - that's why he had the sea whipped and fettered after a storm destroyed his bridge over the Hellespont. Xerxes' modern equivalents want markets whipped and put in fetters when storms blow up and ruin their plans - they are just as foolish and wrong-headed as Xerxes was; the individualist and rationalist world-view is the correct one.
@Daniel Reeves: The lingo creates a barrier of entry.
Indeed. One irritated commenter, apparently quite familiar with economics, put down a lesser-informed writer by saying: "By the way, do you have any numbers on the g-loading of spelling? The g-loading of spelling on the right hand tail? Please do share.. Doctors do this all the time. It's the equivalent of speaking a foreign language, and then blaming the listener for failing to understand.
There are plenty of reasons why people "hate" economists, in my opinion.
1) Economists model the world with numbers, something that non-mathematicians and non-economists feel is emotionally insensitive. This one is probably the biggest reason. Normal people don't understand the effectiveness of a mathematical model in showing how others behave. This is mostly because people don't understand math
2) Dissenters dislike that most economists agree on a few issues. This one is probably held by progressives (free trade) and anti-tax populists (the gas tax).
3) Economists may be seen as "out of touch" or even "greedy." This one is held by people who don't understand association biases or simply don't know what economists do in the first place, which may be more frequent than one might expect (I had to explain to my mom that economics requires lots of math). Those in the latter category probably lump economics with business and marketing.
4) The lingo creates a barrier of entry. For example, my dad claimed that a 5% drop in consumption and a 20% drop in price of oil meant that there was a speculative bubble. So I had to try to explain elasticity to him, except that was pretty hard without simply using the term. In the field, jargon is a handy shortcut. When talking to people who don't know better, it isn't.
"The economists who actually manage our economy don't seem to think that way" -Brian Jaress
The fact that you believe economists manage our economy gives me reason to doubt your other beliefs on the subject.
"Among rational thinkers, I don't think there's a particular "hate" for economists. There is a strong disdain, however, given that beyond simple applications of the basic concepts in micro and macroeconomics, the field has almost zero predictive capacity. This makes it fundamentally unscientific, fundamentally unreliable, and unappealing to rational thinkers." -Alan Yeung
I often here people say that economists can't predict what the market will do and so they are bad scientists. I wonder if you would apply the same reasoning to physicists? Do we make fun of physicists for not knowing if it is going if there is going to be an Earthquake next year or when the next tornado is going to strike? If physicists study matter and energy, shouldn't they be able to predict what the world will do like we expect economists to predict what the market will do? Isn't predicting what particles will do even more simple than predicting what humans will do?
I think "hate" is excessive. Economists are viewed with contempt as a group, just as lawyers are viewed with contempt as a group. A small number of ambulance-chasers or corporate lawyers defending sleazebag practices give the entire profession a bad name, the equally mercenary economists who work in lobbying groups or think tanks do the same for economists. They just tend to be more visible than most.