On studying economics

I was going to do a quote by Joan Robinson as a quote of the day – but then I realised, I’d done this before!

The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.

And in 2008 I made the same point I was about the make now:

Training to be an economist does not tell you the answer to any economic question – it gives you the tools with which to determine answers for yourself, given your own set of value judgments.

Although I would note “any” is a bit strong, it really depends what the question is 🙂 .  So why was I going to post this quote again?

The reason I was going to post this is because I’m currently in the throws of reading a significant amount of ‘normative’ economics, specifically on issues such as household income distribution.  In some (not the majority – but a significant minority) of these papers the authors will state we need value judgments in order to discuss these issues (true) and they then use that as an excuse to throw ANY value judgment out there as justified, often without an indication of the limitations of the assumption – and as a result, in a non-transparent way.  This type of rhetorical sleight of hand saddens me greatly.

Studying economics allows you to spot when people are doing this, so you can ask yourself whether you agree, and then ask them why they hold that judgment.  We can have rational discussion about value judgments, these things are not fixed for all of time within an individual or invariant to evidence.

In my ideal world we don’t study economics to win, or persuade others, on the role of policy.  We study economics to help evaluate, understand, and justify both policy views, and views of social organisation that are of interest to all.  We should appreciate that reasonable people may hold different value judgments, and thereby hold different views on what is ‘right’ or ‘good’ – that is information that helps to inform a public without the time and the inclination to every little element of policy.  These judgments should be tempered by empirical data – but I avoid the term empirical ‘fact’ as we can often confuse the data with our interpretation of it.  Our interpretation requires we put theory and beliefs into the data – and if we are not clear on that, we will often overestimate the strength of our own results!

By making our own value judgments for a policy transparent we should be less dogmatic about policy – and as a result, when I see rhetorical sleight of hands such as the ones I’m hinting about in some of the literature I’ve read I feel uncomfortable.

Update:  The economics blog ‘sex, drugs, and economics’ by Michael Cameron from the University of Waikato discusses these points as well.

4 replies
  1. jamesz
    jamesz says:

    “In my ideal world we don’t study economics to persuade others”

    But what is science if not persuasion? [McCloskey, always]

    • Matt Nolan
      Matt Nolan says:

      Indeedy! But in my defence – I am talking about my ideal world, which may neither be practical or have anything to do with how these matters are done 😉

    • Matt Nolan
      Matt Nolan says:

      I love how the majority of the studies use reported action rather than revealed preferences – and then ignore the possibility that economics simply makes people more honest about their own actions when push comes to shove!

      Of course, if any of the other authors from other disciplines had the slightest inclination to be charitable and actually ask what economists do, instead of demonising them to fit in with their own group, we would never see papers like this 😉

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