Gintis Smashing Heterodox Economics
| Nicolai Foss |
Remember the “post-autistic” movement in economics that began in France in 2000? Have you, too, been irritated by the sometimes, ehmm, bizarre claims that are put forward by members of the “post-autistic economics network“? Do you think utterances such as the following one are, to put it nicely, not accurate representations of modern economic theory:
Game theory cannot be “applied”: it only tells little “stories” about the possible consequences of rational individuals’ choices made once and for all and simultaneously by all of them. . . . Akerlof, Spence and Stiglitz have no new “findings”, they just present, in a mathematical form, some very old ideas — long known by insurance companies and by those who organize auctions and second hand markets. . . . Amartya Sen, as an economist, is a standard microeconomist (that is what he was awarded the Nobel Prize for): only the vocabulary is different (“capabilities”, “functionings”, etc.).
(The quotation can be found here).
… the authors seem completely unaware of contemporary economic theoretical research, which addresses many of the serious problems with neoclassical theory. There is a short piece on behavioral economics, which has been one of the most vibrant areas in economics over the past 25 years, but the author assumes that behavioral economics is an alternative to neoclassical economics. Rather, it is a complement to economic theory and a source of empirical data that can be used to generate better models. Behavioral economics uses decision theory and game theory to critique the Homo economicus of traditional economic theory, but the profession is responding by revising Homo economicus, not by rejecting behavioral economics (see recent papers in Econometrica, the Quarterly Journal of Economics, and other journals).
Post-autistic economics ignores the innovative work of Ernst Fehr, Abijit Banerjee and Esther Duflo, Colin Camerer, Samuel Bowles, George Loewenstein, Daniel Kahneman, Benoit Mandelbrot, Edward Glaeser, David Laibson, Matthew Rabin, Bruno Frey, Elinor Ostrom, Armin Falk, Simon Gaechter, Jean Tirole, Aldo Rustichini, and many others. It ignores neuroeconomics, econophysics, and the notion of the economy as a complex system, with its stress on agent-based modeling. These researchers transform analytical economics to meet the empirical challenges posed by new data. Unlike leaders of the post-autistic school, they do not urge a retreat to philosophy or some defunct 20th century doctrine.
Although I largely agree with Gintis, parts of what he says may be over the top, and he seems to neglect that it may be possible simultaneously to endorse elements of heterodoxy and mainstream economics. I (like co-blogger Peter) have leanings towards Austrian economics and I like mainstream economics. Austrian economics is not simply verbal mainstream economics, but there is very substantial overlap.
Still, as Gintis points out, a main problem with heterodoxy is the too often uninformed opposition to mainstream economics. Why don’t heterodox economists themselves adopt the tolerant attitude (towards mainstream economics) that they accuse mainstreamers of lacking? Couldn’t this be beneficial to both parties?
HT to Marginal Revolution.
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