The post-autistic economics review

Since economics comes up here so frequently, I thought some ofyou might be interested in this.

This is a pretty cool heterodox economics journal, in general riffing on the limitations of the reigning neoclassical theories, the nature of research, and political economy implications. Most of the contributors are respected, so it’s not some crank thing.

See the strange history of economics for some background.

The description of Keynes in that history seems to be limited to “He is very cool and a lot of his theory has been ignored” without a hint as to what ihis theory was or how ignoring it affected economic thought.

EDIT: Basically, what the fuck is that site about? None of it makes sense. I read a little bit of the articles also.

It appears to be some non-austrian economics guys who are deeply upset that they didn’t get a promotion and rationalize it as the result of a massive conspiracy.

Academics get “promotions?”

Yes, they do. They get positions of greater importance at nicer universities. A TA at Chucklesville Bible College is not the same as the Chair of the department at the University of Chicago.

From “The Nature of Heterodox Economics,” by John B. Davis:

Tony Lawson’s critique of mainstream economics is that it is everywhere formalistic and deductive, that this leads it to a closed systems approach based on identifying social event regularities, and that this is inappropriate strategy for dealing with the subject matter with which economics is concerned (Lawson,1997, 2003). Heterodox economics is then distinguished by its rejection of all this and by its commitment to an ontological analysis that takes social reality to be intrinsically dynamic or processual, interconnected and organic, structured, exhibits emergence, and includes value and meaning and is polyvalent (Lawson, 2006, pp. 495-6).

That totally reads like it was written by a bot trying to get past a Bayesian spam filter.

Whoa, I’m getting this totally Kuhnian vibe here.

Sounded like pretty standard Academese to me.

That quotes from Davis is poorly written (“takes social reality to be x, y, z,” is then followed by “exhibits emergence” which is ungrammatical… anyway…) but I think I basically agree with the gist of it, which is, orthodox economics is based on simplifying assumptions which make it formally elegant but disconnected from social reality, and heterodox economics is concerned with getting some of that messy reality back into the picture. I don’t like his list of descriptors of social reality at the end, but “polyvalent” is an important one, imho. Assuming that all valuable things are expressions of one underlying type of value (“utility”) might seem like a nice simplifying assumption but it has some seriously unreal consequences.

Someday someone will write an economics book in plain English, instead of in Buzzword or Academese, and then they will realise it’s not only more readable, but also just as precise.

It just doesn’t look as profound.

See, Freakonomics for an academese-free description of some, contrary to the title, mainstream economic research. An economist wouldn’t want to try to communicate to other economists without academese (jargon) and math, though. That would make the writing far less precise, not more.

“Heterodox” economics consists almost entirely of hacks, aging Marxians (I do not mean to imply that those are mutually exclusive groups), and, judging by that quote, postmodern refugees from the English department. It’s taken seriously by perhaps – perhaps – 1% of the population of economists.

Incidentally: Yes, academics get promotions (Lecturer < Assistant < Associate < Full, at North American universities). One does not get “promoted” to Chair, though. One gets coerced or bribed to do that shitty job.

On the note of “bunch of marxist cranks”: every economics 101 student is taught that minimum wages as actually implemented increase unemployment.

The evidence for this? Jack fucking shit. Yet the discipline is apparently immune to the real world on the subject. Here’s an interview with David Card, John Bates Clark medal winner, where he describes the reaction to some of his data on how a minimum wage increase had no effect on employment.

I’ve subsequently stayed away from the minimum wage literature for a number of reasons. First, it cost me a lot of friends. People that I had known for many years, for instance, some of the ones I met at my first job at the University of Chicago, became very angry or disappointed. They thought that in publishing our work we were being traitors to the cause of economics as a whole.

I recommend The Undercover Economist, by Tim Harford. Also, Hidden Order: The Economics of Everyday Life, by David Friedman. Both are entertaining, readable and informative.

Friedman is Milton Friedman’s son, so I’m just going to leave a big blank space here where McCullough can insert a paragraph about how everything the Friedmans and other classical economists believe is a lie.

Let us suppose you were correct. Would one example of a phenomenon taught differently at the 101 level than expressed in current journal articles be sufficient cause to damn all of mainstream economics? It takes time for new results to filter down to 101 textbooks, and contrary to your claim there were many dozens of econometric studies finding negative employment effects prior to Card and Krueger’s work in the mid-nineties.

You are, however, incorrect. The reason minimum wages are discussed in Economics 101 is to illustrate the effects of price floors in competitive markets. If the effect of the minimum wage were perverse, we would look for the ways in which the labour market fails to match those assumptions to understand what’s going on. That’s what Card and Krueger, two decidedly mainstream economists, do at length in their book, and there are lots of mainstream theories which are consistent with a positive effect of the minimum wage on employment – labour economics hardly ends at the simple supply and demand model taught in Economics 101. Even Economics 101 students are taught at least one theory which predicts positive employment effects in some circumstances: monopsonistic labour markets.

But the empirical literature following Card and Krueger has not verified the positive effect on employment they found. See, for example, this recent review. This topic is a good example of useful and productive mainstream economic research: theory met with evidence of various sorts, and a healthy debate in leading mainstream journals on what it all means. One need merely observe that mainstream economists published highly-cited papers in mainstream journals attacking mainstream conventional wisdom to realize that many of the “heterodox” claims about the exclusionary and dogmatic nature of mainstream economics are false. Obviously, the discipline is not “immune” to new empirical results and new theories.

Now, what are some examples of research by self-proclaimed “heterodox” economists that have, through compelling theory and evidence, changed the way we think about important social mechanisms? The deafening silence you hear is all one really needs to about “heterodox” economists, which consists almost entirely of whining about assumptions in economic theory as it stood circa 1935. Mainstream economics is constantly changing; it is “heterodox” in the relevant sense of the word. Ironically, “heterodox” economists are remarkably orthodox and dogmatic in their views.

it is everywhere formalistic and deductive

This is not standard academic writing, it’s the word “everywhere” placed in the middle of a sentence for no obvious reason. He also uses 6 commas in 2 sentences.

Skedastic, the point of the example is that Chicago people got angry at him for daring to contradict their model.

Obviously. Yet apparently it has no effect on the way the discipline presents itself to the world or makes it any more accurate at predicting anything.

Couple of exercises: poll some students who’ve taken a some economics about the minimum wage. You’re going to get a near universal consensus that it “raises unemployment.” Another one: find an occurence when an economist, or some one with a strong alignment to the discipline (political, commentator, whatever), mentions anything more subtle than “minimum wages raise unemployment”, or contradicts it, in the public sphere. Doesn’t happen. In the field of real-world debate about policy alternatives, “economics” coincidentally ends up having the exact same opinion about the proper design of the world as very rich people. Don’t even get me started on trade policy.

I’d you they’re not immune; the discipline hasn’t cared much about empiricism in the first place.

It seems extremely odd to me to ignore publication of Card and Krueger’s research in the American Economic Review, among other leading journals, and focus on the personal reaction of a few economists. Publication of results which counter conventional wisdom in the leading mainstream journal is strong evidence against the sort of dogmatism claimed by the “heterodox.”

Couple of exercises: poll some students who’ve taken a some economics about the minimum wage. You’re going to get a near universal consensus that it “raises unemployment.”

Again, the weight of the evidence is consistent with that idea:

No one is supposed to know about the conspiracy. Don’t make us to do you what we wound up having to do to Jim Morrison and Kurt Cobain.

I’d you they’re not immune; the discipline hasn’t cared much about empiricism in the first place.

Something like 75% of published papers in economics are empirical. Also, you are allegedly responding to a post in which I point out a large empirical literature on the minimum wage. I fail to understand how you conclude that economics is not empirical. Seems a particularly odd thing to say to an econometrician.

I enjoy the idea that the entire field of economics is a tool of the very rich. What other academic disciplines are ruled by shadowy conspiracies?
Also, when the fuck do I get my check?

First, it cost me a lot of friends. People that I had known for many years, for instance, some of the ones I met at my first job at the University of Chicago, became very angry or disappointed. They thought that in publishing our work we were being traitors to the cause of economics as a whole.

Remember when I was all like “this reads like people who are bitter about something and rationalize it as the result of a conspiracy”? Humans hate blaming individuals(especially if that individual is themself!(themselves? Stupid humanities)) when it’s far more ego-friendly to believe that there were a bunch of people out to get you so your successes were against all odds and your failures were inevitable.

mentions anything more subtle than “minimum wages raise unemployment”, or contradicts it, in the public sphere.

Some people hold a view that is disputed by others! ZOMG!

Jason, doesn’t it strike you as a bit implausible that every single academic you disagree with politically is part of a right wing conspiracy while every single academic you agree with is just looking for the truth? I know everyone thinks their views are correct, but is it so hard for you to imagine someone who honestly and sincerely believes the minimum wage increases unemployment?

Ah yes, I’m now asserting a right wing conspiracy. Much easier to rationalize than “the approach of the field to analysis has gone very strange, and ended in up a dead end of strange models that don’t fit the data.”

I thought it was clear, but I’ll rephrase: if you teach people things that aren’t really supported by the data - namely, that the minimum wage is bad for poor people because it raises unemployment, or that the way for poor third world countries to get rich is eliminating all capital controls and deregulating everything - than you’re not basing your analysis on empirical data. Sure, sure, there’s some studies with data in them that claim to find a link; I haven’t read lots of things, because I’m not a professional economist - but I really don’t see how anyone can rationally look at the state of the labor market today and say minimum wage increases unemployment with a straight face, or similarly for the history of successful industrializing countries doing so behind enormous tarriff walls, or the enormous increase in poverty in the “World Bank and IMF” class of industrializing states.

How strange. I was responding to this comment:

In the field of real-world debate about policy alternatives, “economics” coincidentally ends up having the exact same opinion about the proper design of the world as very rich people. Don’t even get me started on trade policy.

I don’t really understand how that comment relates to your ideas about models that don’t fit the data. It seems rather to be a claim that economists are in the pockets of the wealthy.

I thought it was clear, but I’ll rephrase: if you teach people things that aren’t really supported by the data - namely, that the minimum wage is bad for poor people because it raises unemployment,

I do teach people that minimum wages decrease employment (you keep stating the simple theoretical prediction incorrectly). I teach them that because that’s what the bulk of the evidence says.

Sure, sure, there’s some studies with data in them that claim to find a link; I haven’t read lots of things, because I’m not a professional economist - but I really don’t see how anyone can rationally look at the state of the labor market today and say minimum wage increases unemployment with a straight face,

Just to make sure we’re clear on Jason’s idea of empiricism here: he is not basing his ideas on careful statistical analysis of the data, rather he’s just “looking” at the labor market. Out of curiousity: what are you observing that lead you to the conclusion that increases in the minimum wage don’t have disemployment effects?

Well, remember that heterodox economics is opposed to the “formalistic and deductive” approach of mainstream economics. Once you’ve rejected formal logic and deductive reasoning, you’ve pretty much rejected the scientific method, and you’re not left with much to contribute but postmodern literary criticism.