In most human endeavors I am an optimist -- tomorrow will be better than today. The human imagination is able to see things that weren't noticed before and progress is made. Pretty soon we live in a world with improved technologies that bring convenience to our lives at lower real cost than the previous generation. But I am not sure that this argument for progress grounded in economics holds for economics as a discipline itself. Tyler Cowen recently had a nice description of the three types of economists: math jocks who advance through the professional ranks through their technical prowess, undergraduate teachers who relish the role of introducing young students to the power of economic reasoning, and iconoclastic thinkers who are able to find their way in the academic world despite their tinkering on the edges of professional respectability.
Consistent with that description I would also divide economic discourse into the following types: technical economics that goes on in the professional journals, policy economics that goes on in think-tanks and government agencies, public intellectual economics that goes on in the newspapers, magazines, radio and TV, and now-a-days to a considerable extent blogs. As modern technologies have lowered the costs of publishing there has been an explosion of opportunities in these three different types of economic discourse. This has many positive consequences, including lowering the professional costs of being an iconoclast. But I also think there are some significant negatives that we should consider.
The most significant negative in my opinion is the disjoint that exists between the different types of discourse. As I mentioned in an earlier post on John Kenneth Galbraith, in the 1960s when Milton Friedman and Galbraith were the public face of economics as a discipline, they also were important figures in the other types of discourse (professional and policy), and there was a coherence to the arguments that they would give across the types of discourse. Friedman's technical arguments about the quantity theory resulted in his argument for a monetary rule rather than discretion, and both fueled his public stance in fighting inflation. A similar coherence could be found in Galbraith's work.
In the economic discourse today, however, the coherence often disappears. The same individual may argue one thing in his technical work, a different argument in his policy pronouncements, and yet another thing in his public intellectual work. Greg Mankiw recently discussed a debate between Ed Lazear and Paul Krugman on inequality and returns to education. Krugman is actually the poster-child for the problem I am suggesting plagues economic discourse. As Mankiw says after quoting Krugman from his textbook where he holds basically the same position on the subject as Lazear:
I suppose that Paul has changed his mind since this book (copyright 2005) was written. It is a bit harsh, however, for Paul to be so hard on Eddie for believing what Paul believed not very long ago.
Perhaps Paul would reconcile the apparent disparity here by drawing a distinction between acquired skills and inherent talent. Eddie suggests that the increased inequality is mostly from higher returns to acquired skills, and Paul may think it is more from increased returns to inherent talent. But that is just conjecture on my part.
But the real problem is that Krugman is like wrestling with jello. He is on three sides of any issue seemingly pulling arguments out of thin air. Well, he is not that incoherent --- he rarely has seen a liberal pro-active government policy that he doesn't like and he rarely finds a conservative concern with big governemnt worth considering. But his academic work doesn't seem to impact his policy position, or his public intellectual stance in any logical manner.
My concern is that Krugman's case is not isolated, but a general trend in economic discourse that is enabled by advancing in modern technology. Multiple outlets have emerged in print, blogs, podcasts, etc. that have led to an expansion of opportunities for would-be economists to voice their opinion. But whereas in the market economy, producers of goods and services are disciplined by the buying and abstaing from buying decisions of the consumers, in the "market for ideas" the discipline of profit and loss is either absent or deemly perceived. So incoherence results and the discourse gets worse over time rather than better. My general optimism turns to pessimism.
There are arguments, namely by Michael Polanyi in his "Republic of Science", that sees the scientific process as analogous to the market process. Bill Butos and I have countered this argument in our essay "Kirznerian Entrepreneurship and the Economics of Science" and David Prychitko and I develop a similar argument to the organization of philanthropic activity as well in our essay "Is an Independent Non-Profit Sector Prone to Failure?"