Are Economists Free-Market Apologists?

12 July 2007 at 3:52 pm 5 comments

| Peter Klein |

This New York Times piece describes contemporary economics as a rigid free-market orthodoxy, challenged by a few courageous iconoclasts who question free trade, support minimum wages, favor tax and spending increases, and the like. To the author: What color is the sky on your planet?

I was to blog a more detailed reaction but Alex TabarrokLarry White, and Greg Mankiw, among others, have beaten me to it. Note that Alex and Larry both refer to Dan Klein’s work on the ideological views of economists, which we’ve discussed often here at O&M. The Times piece did not bother to include any data, of course.

Entry filed under: - Klein -, Classical Liberalism, Institutions, Myths and Realities. Tags: .

Adam Smith and the Corporation “As Bad as PowerPoint”

5 Comments Add your own

  • 1. Paolo MARITI  |  13 July 2007 at 10:22 am

    The NYT is of course unfair. Yet it is influential and has a large audience. May be economics is mystified by some economists themselves when they deliberately make their arguments hard to understand, so as to prevent people finding out about what they mean.

    Ronald Coase writes “… and large, dissatisfaction is not with the basic economic theory itself but with how it is used. The objection essentially is that the theory floats in the air. It is as if one studied the circulation of the blood without having a body”.

  • 2. jc  |  13 July 2007 at 12:52 pm

    This matter deserves wider discussion, both by those rare economists interested in the true state of their profession, and by the rest of us whose lives are often shaped by their thinking and/or ideologies.

    But as we engage in this discussion we should not kid ourselves this dispute belongs to economics alone. It is simply a present surfacing of the Methodenstreit – the fundamental methodological battle in the social sciences which has still to be resolved and/or transcended.

    The same dispute is equally present, though less remarked, in the managerial and organizational sciences, as many post-docs looking for work can attest. Try looking for work as a strategy academic without the neoclassical model behind you.

    But the news (given the article in the NY Times) is not all bad. Though the dispute is already around 150 years old in our field, I have become convinced that herein lies a path to a new era of organizational theorizing. Bottom-line, therefore, I think that we should address and resolve the dispute in own field rather than make sneering remarks (to use McCloskey’s fine term) about economists and what they think their work is good for. That is at least one of the reasons why the ‘search for micro-foundations’ by those who keep this blog going needs wider circulation.

    There’s a point at which we have to get real about what we are doing and it seems to be that we are better off saying we are dong a form of ‘applied economics’, than that we are doing ‘real economics’. After all the AEA is not the year’s most important academic event for most of us.

    But if we are dong applied economics then doing something about the gap which Coase speaks of is more urgent. We are, as it were, conceptually grounded in the body rather than in the abstractions of circulation theory. If this is true how can we continue to ignore the questions which the Methodenstreit raised?

  • 3. Robert Vienneau  |  15 July 2007 at 3:34 pm

    I’ve been mystified by bloggers reactions to that article. Consider mainstream reactions to claims that orthodox economics tend to be be uniformly laissez-faire. My impression is that mainstreamers have responded by saying that there are too many orthodox economists who favor government intervention. Shouldn’t the line be, “As scientists, we have no opinion on the desirability of policies at all”?

    I think that if you want to address heterodox economics, you need to look at the professional literature.

    I think the question is not politics in the larger world, as the Times article puts it. The first political question in this debate, to me, is the quest for resources (grad students, tenure slots, entry into reputable journals) and reputations in academia. And George Mason fits into this story alongside Amherst, the New School, and the UMKC.

    I think of the Times article as trying to catch up to Chris Hayes and failing. Of course, Hayes had more words in his article.

  • 4. Kevin Carson  |  18 July 2007 at 2:27 am

    He’s equally clueless to claim that all heterodox economists are enemies of free markets. The new institutionalism complements some deficiencies of both neoclassical economics and the Austrianism of the first half of the twentieth century: the neoclassical treatment of the firm as black box or production function, and the Misesian treatment of it as the unitary instrument (thanks to the magic of double-entry bookkeeping) of the entrepreneur’s will.

  • 5. David Hoopes  |  20 July 2007 at 10:04 am

    My big complaint to the endless complaining about economics is how vauge the complaints are. I read the NYT piece, and there is very little about specific economists or economic work. I find the the constant complaining from Org Theory to be similarly vague. Worse yet, it seems to me that a lot of the criticism of “economics” generally reflects a very, very, shallow understanding of the field. The Pfeffer AMR piece is a very good example. The economics they complain about, as best as I can tell, does not exist. P.S. my Ph.D. is in “Strategy and Organization” and I did have a sociologist and “organization scientist” on my committee.

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