Why Economists Aren't as Important as Garbagemen (but they might be)

|Peter Boettke|

That is the subtitle of Dan Stastny's very insightful book, The Economics of Economics (Wolters Kluwer, 2010).  

In discussing our program at GMU to would-be graduate students or potential donors and other interested parties I often stress that economists have a professional obligation to communicate their research findings and the knowledge of the discipline to four distinct audiences: scientific peers, students, policy makers, and the general public.  The true master economist, such as Milton Friedman, can communicate effectively to all four levels.  But not everyone is so talented as Milton Friedman.  

At GMU, however, we do provide opportunities for graduate students to learn and develop their communication skills so they can pursue their comparative advantage at any 1 or more of these levels.  The most successful of these students can and do master more than 1 level.  Even though priority is given to the ability to communicate with one's scientific peers, we recognize that value in pursuing one's comparative advantage and in mastering the art of economic communication (in spoken and written word) more generally.  This is what makes our department unique more than anything else, we respect as a group all four communicative activities of the economist.  We also see a strong connection between all four communicative acts --- understanding the science improves our ability to talk to students, policy makers and the public.  In short, economics from our perspective is not just a game to be played by clever people, it is a discipline of immense importance for our understanding of, and the potential for improvement in, the human condition.

Dan concludes this wonderful book by informing his readers that for economics to be respected and to have its teachings heeded, "it may not only needs its Samuelsons, Friedmans or Hayeks, but also its Cobdens, Brights, and Bastiats.  When economists figure this out, there will be a better chance that they may at last become as important as garbagemen, at least in the eyes of those who consider handling of ideas as momentous as handling of garbage."

Discuss.

Comments

[Daniel Kuehn]

It's interesting that he seems to contrast guys like Samuelson and Friedman with those who make economics generally intelligible whereas I (like you) think of Friedman as one who reaches a wider audience. Samuelson is also important to mention. A non-trivial share of the "general public" has taken one or two large economics lectures in college, and Samuelson's inauguration of economics textbooks has done a great service in clear communication to the public in that sense. In a way it's communicating with students - but many of those students don't go on to do more economics, so it's probably better thought of as communication with the general public. I have no information on this, but I would wager that before the rise of textbooks in economics it was not a subject that was quite as widely taken by college freshmen.

Thomas Kuhn writes a lot about textbooks and their replacement of treatises as one of the hallmarks of the rise of science. In that sense, too, Samuelson has done a lot for scientific peer communication and of course student communication.

The other obvious thing is blogs. We tend to think of them as a "general public" communication strategy, but this too touches all four. Students are likely to be among the most avid readers of economics blogs (it's almost like having several additional professors to consult), and a lot of peer-to-peer communication and exchange goes on there too.

[Daniel Kuehn]

By the way - PERCEPTIONS of our importance relative to garbagemen is, of course, different from actual importance. After all, practical men, who believe themselves to derive greater value from garbagemen than other intellectual influences, are usually the slaves of some defunct economist.

[J Oxman]

Of course, DK, I believe Murray Rothbard would disagree with Thomas Kuhn's take on the value of textbooks. The argument is that you lose the notion of an all-encompassing system of thinking to the notion that economics is a series of results.

Since I've been employed as a prof, I've come to agree more and more with Rothbard on this issue.

Very good economists can have complex models that can be explained intuitively to non-economists. These are the same economists who are very good undergraduate professors. These people are a small percentage of the overall profession - or at least that's my experience have attended only research universities. But then, I would think that many economists at teaching universities would not be keen researchers.

[Daniel Kuehn]

Could you explain why he/you thinks textbooks lose the notion of an all-encompassing system of thinking? I find the criticism unusual because that's precisely why Kuhn emphasized the replacement of treatises with textbooks as being so important - because they ushered in an all-encompassing system of thinking.

In a lot of ways, I think the true value of the massive freshman lectures is not cramming specific facts or theories into students' heads but to get them to "think like an economist".

[Martin Pánek]

But most of the textbooks won't make you "think like an economist", I think. They will make you think: "Yeah, curves... but how's that connected to reality?"

At least, that's my notion of the textbooks I have seen.

[Troy Camplin]

A science textbook holds together because it has a set of unifying theories -- quantum phyiscs at the smallest level, Newtoninan mechanics at the middle level, and relativity at the cosmic level for physics; atomic theory for chemistry; Darwinism for biology. As psychology moves more and more toward neurological and evolutionary psychological explanations, it is moving toward having this kind of textbook unity. Without it, though, we have a hodgepodge. Economics textbooks are bad textbooks because they are not held together by a common theory. There are a wide variety of theories, many contradictory. Until a common theory is settled upon, there cannot be a good textbook written for economics. Sure, the other sciences have controversies, but they are controversies on the margins, not on the fundamentals.

[Atlas]

The statement should really be rephrased..."Why economics professors aren't as important as garbage men?"

Economists with advanced mathematical and econometric capabilities are highly valued in the private sector.

[Peter Boettke]

Atlas,

Why don't you read David Colander's book of that title and perhaps you might understand what the thought experiment actually is, and it applies equally to private sector economists as it does to academics.

Pete

[Atlas]

Pete,

I could read a whole book or you could make a short answer....

You just blogged about sharing economic knowledge with others and dismissed my comment by saying "go read this whole book; I don't have the time to answer." The hypocrisy is striking.

Ridiculous

[Rafe Champion]

Daniel, do you think that Samuelson really thought like a good economist? I know he was excited by Keynes (joy it was to be alive), mathematics and the welfare state, but how come he made such a hash of reading the Soviet economy?

[Daniel Kuehn]

Rafe - I think he thought like an excellent economist, Soviet errors aside. I'm sure I haven't read all the passages in question, but initially he seems to have just been looking at rapid initial growth of the Soviet system and making poor inferences from it. Peter is best placed to arbitrate whether that initial growth was even substantial in reality, but I had always been under the impression that the Soviet Union did grow tremendously - the point is it grew in contradiction to a liberal society and (more important for the economic question at hand) unsustainably for reasons that marked-based economics demonstrates.

Fine. He was wrong on the Soviet Union and he was too caught up in the initial growth spurts.

The thing is, Rafe, when virtually anyone outside of the Austrian community thinks of Samuelson this is a miniscule part of what they think of. That wasn't "Samuelson's contribution" - and Samuelson's contribution was truly great.

It's like Mises with non-Austrians. There are a lot of non-Austrians who when they hear the name "Mises" just think of his thumbs up to fascism - couched (as Samuelson's thumbs up was couched) in recognition that it wasn't the most liberal society, but that it got the job done. No Austrian thinks of this as Mises's contribution. Some vociferously deny he had such sympathies. Some accept it and move on to more important contributions of Mises. The same goes for Samuelson. Of course not every word he spoke or wrote was pure gold. Who does? But I'm not going to deny the contributions of a truly excellent economists because there's a group of people who exclusively think about this small point from him when they think of his contribution.

Big picture, would the discipline be better or worse without Samuelson? I think indisputably worse. This isn't to say we accept him unmodified today. Of course not. Science always modifies itself. But he provided a solid foundation.

[Daniel Kuehn]

On the Mises point - I acknowledge those sentiments are there in Mises, but I'm not the sort of non-Austrian that goes around thinking Mises was a closet fascist any more than I think Samuelson was a closet Communist. My point was to illustrate how some people can obsess over points that are completely beside the point of what "Samuelsonian economics" is or what "Misesian economics" is.

[Methinks]

Samuelson was a great economist if you think Keynes was a great economist. If you think Keynes was a great economist, then you obviously have no issue with the Soviet Union.

As Samuelson said in later versions of his textbooks when the human tragedy of the Soviet Union could no longer be denied or ignored - "it is worth it".

[Peter Boettke]

Daniel,

There aren't any fascist sympathies whatsoever in Mises. I am completely confused. There are anti-communist sympathies and thus some on the intellectual left thought that meant they could paint him in the light you suggest. But that was just confused. Mises is as anti-fascist as any intellectual history. Look at Omnipotent Government, or even the relevant passages in Human Action.

Where do you get the sense that he has those sympathies?

As for Samuelson, the critical issue is to read his first edition to see where he thinks his economics leads, and on the Soviet issue, the paper to read is David Levy's and Sandra Peart's paper in JEBO.

I would also suggest reading the work on economic growth done by Gregor Khanin, and Vasliy Selyunin. And then compare that work to someone like Gur Offer, and more recent work which pushes for the growth rates. Personally, I think there are significant issues associated with the measurement issues.

[Gene Callahan]

"If you think Keynes was a great economist, then you obviously have no issue with the Soviet Union."

The art of the non sequitur!

[Methinks]

There were no greater champions of the Soviet Union in the West than Keynesian economists - Samuelson and Galbraith among them. We had full employment and tons of aggregate demand. Unreliable private investment was supplanted by government planning. Keynes himself said that his theories would work best in a totalitarian state. Or haven't you heard?

[Daniel Kuehn]

"If you think Keynes was a great economist, then you obviously have no issue with the Soviet Union."

Then either (1.) Keynes didn't have that much self-esteem or sense of self-worth (which is NOT true), (2.) Keynes struggled with a great deal of cognitive dissonance, or (3.) Methinks has made a poor inference.

[Troy Camplin]

The Soviet Union's "rapid growth" is a prime example of the poverty of GDP/GNP as a concept. I have talked about the problems of GDP here:

http://zatavu.blogspot.com/2010/10/is-macroeconomics-nonsese.html

Like most aggregates, it hides reality.

[Daniel Kuehn]

Peter - Mises was not a fascist, I completely agree. Mises did refer to the fascists as the saviors of Europe for being willing to use violence to beat back the Communists.

I really think you're taking this the wrong way - I used it as an example to say that you all would not think much of people who emphasized Mises's comments about fascism and for good reason. I similarly don't think of Communism when I think of Samuelson, and it's bothersome that that's what perks up in some circles every time his name is mentioned, as if that somehow constituted his contribution.

Thanks for the thoughts on the growth rates - I know you know that literature well. As for the evaluation of the growth rates, etc. that Samuelson cites - I am not defending him on specific points like that and wouldn't be surprised a bit if he were dead wrong.

[Daniel Kuehn]

re: "Keynes himself said that his theories would work best in a totalitarian state."

No he absolutely, unequivocally did not say this: http://factsandotherstubbornthings.blogspot.com/2010/07/keyness-foreword-to-german-edition-of.html

You could in theory have a totalitarian state do things consistent with Keynesianism. But if you take the broader Keynesian economic, social, and political philosophy nothing could be more anti-thetical to it than totalitarianism.

[sewa mobil]

Nice article, thanks for the information.

[Rafe Champion]

Daniel, misreading the Soviet economy was not a minor error, it demonstrated that he simply did not understand the way real economies work. That is what his particular kind of mathematical approach does to you. So you produce a generation of economists who could not see that the housing bubble had to burst unless the actors paid attention to the real processes at work (including the political processes).

That limitation was apparent in the chapter on Development economics in a student text that he wrote with two coauthors. They completely missed out the critical institutional factors.

Do you regard his revealed preference theory as another minor error, since it was apparently sunk by Stanley Wong?

[Methinks]

"Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire." - Lord Keynes

Keynes himself didn't advocate for a totalitarian state and, having visited the Soviet Union twice, didn't care for it. Keynes, initially intrigued, found the living terrible. Messy as it is, a liberated people produces abundance. But, planning is necessary - if done by the right people. Keynes wrote to Hayek after reading "The Road to serfdom": "the line of argument you yourself take depends on the doubtful argument that planning is not more efficient. Quite likely, from the purely economic point of view, it is more efficient." You decide if that's cognitive dissonance and economics.

The same lack of love for the Soviet Union did not plague future plan-happy Keynesians - including Samuelson and Galbraith. Sorry. Complete lack of understanding of what's going on and Ignoring that much empirical evidence does not a great economist make.