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June 2, 2009

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Talismanic Economics

Ezra Klein and Matt Yglesias are talking about “prestige cross-pollination” in economics:

“…the habit of distinguished economists using prestige acquired within their field to pass off sloppy work in other fields.”

Klein backs it up:

…it’s not just about commentary. Take the Obama administration. Brian Deese, the guy quarterbacking the auto restructuring, is a 31-year-old members of the economics team. Peter Orszag is probably the most powerful voice on health-care policy. Larry Summers, by most accounts, has a hand in literally everything. Economists, in other words, are the prime movers on not only the economy, but health care, climate change, housing policy and much else.

Klein finished with: “I’m not saying whether this is good or bad.”

I think it’s probably bad. Economics has been afforded a strange, special status in our society. It’s become the master science of large-scale planning. It’s become psychohistory.

Except it’s not cut out to be either of those things. There are simply too many important values in the world that we can’t tally in monetary terms. (And when we try, it’s a hack — better than nothing, but still a hack.)

Well, one caveat: To the degree it’s been able to absorb social insights from other fields — sociology, cognitive psychology, math, law, even some biology — sometimes “economics” is just a convenient umbrella for a lot of very different tools.

But that integrative role needn’t belong to economics alone. I think certain kinds of social scientists, and certain kinds of historians, could frame big policy decisions just as well — or better — than economists.

“Now do it bigger! And more humble.”

Posted June 2, 2009 at 4:53 | Comments (7) | Permasnark
File under: Briefly Noted, Snarkonomics, Society/Culture


There's no reason to suspect that those guys were given those responsibilities *because* they are economists, though.

To start, I don't think Deese even is an economist; he's a law school grad, I know. Orszag was chief of staff for Daschle, the health-cariest senator in DC. Summers had some other experience, too, didn't he? A university somewhere?

Ha ha. OK, good points, and Klein's list is too short anyway, so let's count it out.

Don't you think economic arguments carry more weight at the highest levels than [insert almost any other kind of argument here]? And those trained to make good economic arguments therefore have an advantage?

There is no question that data collection and data mining are still in their infancy; is just getting off the ground. As long as we are quantifying things in the public policy sphere there will be plenty of economists.

Is there anything firmer to suggest that people actually working as economists get too much respect in government? When I read the website, it seems like there is way too little public discussion of the economics behind our public policy.

Well, I think that having economists work as policy wonks is generally a good thing. Good economists are good at understanding data, systems, and outcomes. Lawyers, who have dominated government for the last quarter-millennia, are not always terrific at those things. Also, given how much of our political debates are shaped by economic concerns, and often cartoonish ones, it's good to have some sophisticated expertise to bear on these things. Also, having economists think seriously and practically about public policy problems is probably good for economics and economists.

@Robin - I'd be stoked if rigorous economic arguments are really being being privileged over partisan, plutocratic, nationalistic or religious ones. Yes, the US government could use more great minds from all fields, but one thing at a time.

Posted by: Jake on June 3, 2009 at 02:08 PM

You know what? Howard, John, Tim, Jake -- you're totally right. I didn't think this through. You've brought me around. And I guess it's in my self-interest, too -- as an economics major ;-)

I read the comment snippet, and I really, really wanted it to read:

"You know what? Howard, John, Tim, Jake -- you guys are dicks. Call me when you get your heads out of your asses."

Part of it is the collapsing of two mutually compatible ideas/observations.

Economists are highly represented in public policy AND
Economists are treated as allknowing secular wizards who through arcane rites, jiggle the handle of our economy.

Taken together, these two things are dangerous.

So maybe part of what these economists ought to be doing is pushing for tranparency and working to educate the public, share information with companies and investors, etc., rather than clinging to the value of the secrecy of their own utterances.

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