Macroeconomists have physics envy

[Alcibiades]

I’ve noticed that criticisms of economics of the sort that have dominated this thread tend to be pretty common among what I would describe as well-read laypeople, who often latch onto criticisms of it (frequently as originally presented in the high-brow media) because they, ostensibly, seem original and incisive. I think, in general, economics is unfairly demonised by people with some, but not lots, of knowledge of it.

I mean, I kind of find it hard to believe that some people think economists have just never considered these very broad critiques. To take just one example, behavioural economics has obviously been one of the major developments in the field in the past couple of decades, and has itself spawned a lively debate among economists as to its usefulness and accuracy. It is quite stunning that intelligent people would simply write off an entire field as illegitimate based off some caricatures of it they’ve picked up, despite never having studied the subject to a high level.

Much of this confusion probably comes from the way introductory undergraduate economics courses are taught, which does bear little resemblance to the discipline at higher levels, and in some cases even includes as examples theories economists now believe to be wrong. There are certainly very valid questions to ask about the current mode of undergraduate teaching of the subject, but ultimately this is the way most subjects are taught; you start with basic, fairly crude models, and as you advance to higher study, you refine them more and more, and begin to question your original assumptions and introduce further complications. It would be rather unfair to throw first-year undergraduates in at the deep end in this way, so to speak, however. Related to this, there seems to be some confusion here as to the nature of modelling itself. The purpose of modelling is not to perfectly describe reality, but rather to try and gain some insights as to important aspects of it. This is nicely summed up by the saying, “All models are inaccurate, but some are useful.”

None of this is to say that there are not legitimate debates to be had about economic methodology. For instance, you could definitely say that too many economists these days use complicated maths to obscure either weaknesses in their arguments, or the fact that they are not really saying anything profound. There is certainly a role for research which explains things in easier terms to non-maths specialists (though still backed up by rigorous quantitative reasoning) — a favourite example of mine is George Akerloff’s 1970 paper ‘The Market for Lemons’, which was absolutely groundbreaking in its contributions to information asymmetry (which, on a side note, is another example of a challenge to traditional economic models — in this case those that assume — which has been well-established among academics for almost half a century, but is still not taught that often in introductory courses), but yet is pretty readable for the intelligent layperson. Ultimately, though, any calls to more-or-less banish maths from economics are absurd — economists use it for a reason, which is that maths is a much more precise language than, say, English, and if used correctly is more conducive to tight logical reasoning.

Finally, I have to say the charge that economics is an “ideological” or “political” project, which, amusingly, has been levelled by both right-wing and left-wing posters in this thread, is pretty bizarre. While it is true that the centre of gravity of the academic field lies on the centre-left, economists span a very broad range of political positions. In general, I would also say that not all that many are passionate ideologues either.