Yves here. Lest you mistakenly think that Black is caviling about some minor issues in this post, he’s actually focusing on the core of what is wrong with economics. Greg Mankiw effectively admits that economics is really about learning how to “think like an economist” and that that process is so removed from notions of rigor, verification, and completeness (as in explanatory power) as to amount t indoctrination. Steve Keen makes the same point, longer-form, in his book Debunking Economics. He explains that undergraduate economics students are taught to accept both overly reductive models and a circumscribed set of mathematical techniques, and are told that if these simplifications will be explained and legitimated in graduate school. But Keen points out that economics as a discipline rejects the more demanding mathematical techniques that would better characterize economic phenomena, in part because more accurate modeling would not be tractable, as in would not produce tidy (and only randomly correct when you get out past six months) predictions and policy recommendations that give economists a seat at the policy table. And when graduate students are finally told of the qualifications and exceptions to what they’ve been taught for years, most are too deeply inculcated to embrace the implications, which would be to reject a lot of their prior instruction.
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly published with New Economic Perspectives
In this first installment I discuss the unacknowledged contradiction that lies at the core of the two meta-myths in the preface to N. Gregory Mankiw’s textbooks. Mankiw is among the leading providers of introductory economics textbooks. In his preface to these volumes he preaches his first meta-myth in his first substantive sentence about economics.
Economics combines the virtues of politics and science. It is, truly, a social science. Its subject matter is society–how people choose to lead their lives and how they interact with one another. But it approaches its subject with the dispassion of a science.
As it is preached by Mankiw, theoclassical economics is a dogma that repeatedly violates the most basic tenets of science. It is unlikely that many scientists approach their work with “dispassion” – passion is one of the keys to success in many humans – but theoclassical economists routinely fail to bring dispassion to their dogmas. Indeed, the first step in their adoption of the scientific method would be to renounce Mankiw’s first meta-myth.
Mankiw’s preaches his second meta-myth in the next paragraph of his preface.
Economics is a subject in which a little knowledge goes a long way. (The same cannot be said, for instance, of the study of physics or the Japanese language.) Economists have a unique way of viewing the world, much of which can be taught in one or two semesters. My goal in this book is to transmit this way of thinking to the widest possible audience and to convince readers that it illuminates much about the world around them.
Mankiw does not see the fundamental contradiction between his two meta-myths. It turns out in his second meta-myth that learning economics is not really like learning a real science or even a language. A “little knowledge” supposedly “goes a long way” in economics, unlike physics or learning Japanese. What explains this paradox? How is it possible for a subject as massively complicated as economic life, much less all the fields such as the family that theoclassical economists now purport to study and devise proper public policies, that a brief introduction in a freshman course “goes a long way” to actually understanding proper policy choices in such enormous spheres of life?
Mankiw’s does not understand how revealing his answer is to this paradox. He actually preaches that economists are “unique.” The sheer arrogance of the claim – offered with no proof or analysis – is staggering. But the claim is also hilarious in context, for Mankiw purports to be explaining why economics exemplifies the scientific method. Mankiw has just got done assuring the reader that “science was analytic, systematic, and objective.” How is it, then, that economists are “unique” among scientists? I can assure readers that economists are not taught some secret hand shake or statistical technique and are not secretly selected based on unique genomes. Mankiw is making the opposite point – claiming that in two semesters of studying his “Ten Principles of Economics” he can turn your 18-year old freshman son or daughter into someone who will “think like an economist.” Mankiw fails to understand that this means that economists cannot be “unique.” Mankiw teaches his ten commandments to anybody’s son or daughter regardless of whether they will become an economist, political scientist, physicist, or student of Japanese language and literature. Even if economics had some unique “secret sauce” they would have given away the recipe many decades ago.
But consider the bizarreness of Mankiw believing that economists all “think” the same way. Recall that the way he claims we think is not a result of our studying and believing in the scientific method – for then we would not be “unique” – we would simply be like all good scientists. Mankiw is asserting that all economists share the same belief systems (creed). Indeed, if you do not share his dogmas – his interpretation of his ten commandments – you cannot be a “real” economist. Lots of professors believe they are demi-gods, but few go so far as Mankiw in drawing up his own ten commandments and then claiming that economists are unique because they all worship Mankiw’s commandments. Recall that this is in the context of Mankiw preaching his first meta-myth that economists approach their field with pure “dispassion” as a “science.”
Economists are unique among scientists in the frequency, severity, and persistence of their errors. No other field has such a disastrous series of predictive failures in modern times. No other field gives Nobel awards to economists for preaching critical policy issues and predictions that have proved dead wrong. Conventional economists claim that they should be judged on the basis of their predictive success.
Economists are unusual, but not unique, in their frequency of scoring low in altruism. Part of this is self-selection. Students who choose to study economics score lower in altruism. There also appear to be learning effects. After they major in economics students score even lower in altruism. The ways that economists are unique, or at least statistically unusual, reflect badly on economists and economics. Mankiw is a leading contributor to what makes theoclassical economics so dogmatic, false, and immoral.