[My wife is a physician-PhD, so I doubt I am an impartial observer here.--ES]
In reality, medical care during pregnancy seemed to be one long list
of rules. Being pregnant was a good deal like being a child again. There
was always someone telling me what to do, but the recommendations from
books and medical associations were vague and sometimes contradictory.
It started right away. "You can only have two cups of coffee a day." I
wondered why. What did the numbers say about how risky one, two or three
cups were? This wasn't discussed anywhere.
The key to good decision making is evaluating
the available information—the data—and combining it with your own
estimates of pluses and minuses. As an economist, I do this every day.
It turns out, however, that this kind of training isn't really done much
in medical schools. Medical school tends to focus much more,
appropriately, on the mechanics of being a doctor--Emily Oster in WSJ [HT Diana Weinert Thomas via Facebook].
Oster's editorial is a pre-publication to a commercial book. It's supposed to be provocative. Indeed, it 'ticks off' all the 'right boxes:' babies, a desire for self-ownership/autonomy ("Pregnant women...want to assess risks for themselves and make their own best decisions"), rejects scientific over-reach ("fuzzy science and half-baked research"), embraces the good life ("a glass of wine every now and then, plenty of coffee, exercise when I wanted it") etc. Her editorial also offers a glimpse into the eugenic ideals of the new epistemic elite: "the other big concern with alcohol [consumption during pregnancy] is low IQ" of the child. (Fetal alcohol syndrom is not just about IQ.)
George Gale pointed me to this news-story, which recounts how a PhD student, Thomas Herndon, "first started looking into Reinhart and Rogoff's work as part of
an assignment for an econometrics course that involved replicating the
data work behind a well-known study." Beyond the significance that politics may be guided by flawed science, here is a part of the story that transcends partisan politics; economics (like many other sciences) has terrible practices in sharing and replicating data (here's a link to recent scholarship on this.) My economist friend, David Levy, has been publishing about these issues for at least two decades (here's a link to a paper in Social Epistemology), so I am not optimistic that we will see a change in ethos in the field any time soon.
Before "Larry Summers" became synonymous with expert for hire by Wall Street, he was the Harvard President, who suggested, while claiming that he wished to "provoke," that "there are issues of intrinsic aptitude, and particularly of the variability of aptitude," that might explain the relatively low presence of women "in high-end scientific professions." Summers insisted that his is an "entirely positive" not "normative approach." (Summer 2005; he is deploying a standard distinction among economists.) The lecture set off a furore that contributed to his eventual resignation from Harvard (it surely did not help he was in charge of a nearly US$ 1 Billion loss on speculative investments). But...before his notoriety Summers was one of those economists that effortlessly move between academia and government (while generally serving the interests of the wealthy). Such folk become prominent within public policy economics through highly regarded academic work, which won Summers the John Bates Clark Medal (1993) and which partially accounted for his selection as Chief economist at The World Bank (1991-3). As the politically influential, but nevertheless academic Vice-President of the World Bank, Summers was invited to Pakistan to give The Quaid-i-Azam Lecture in 1992, "Investing in All the People," to the Pakistan Society of Development Economists. The main point of Summers' lecture, which has been cited close to 300 times and is easily found on the internet, is:
Investing in the education of girls may well be the highest return
investment available in the developing world. As such, increasing the
level of female education is an especially high priority in Pakistan.
So, before Summers became synonymous with sexism in academia he was an advocate of underprivileged women's education. (A topic Summers continues to talk about.) The paper was admiringly profiled in Business Week, and created the meme of Summers as "iconoclastic Liberal." For those that like their irony fully symmetric, I note that the 1992 magazine article treats Summers as an academic "provocateur." Summers' Pakistani hosts asked a mathematical economist hailing from Waziristan, MA Khan (then as now at Johns Hopkins), to offer comments (see here). Rather than dazzle his famous American colleague and "the Pakistani Minister of Defence and Minister of Water and Power" (quoted from Richard H. Sabot's response to Summers) with state of the art mathematical technique, Khan quotes Derrida and Clifford Geertz in the process of calling Summers "reckless."
The behavior of Andrei Shleifer et al in Russia is a scandal that has never been adequately addressed by the Harvard economics department (and the economics profession more generally), and often wished away. This is not a small matter because the Harvard department has been a key source for advisers to government, important textbook writers, consultants to Wall Street, and opinionmakers. (And note that I have not even mentioned Larry Summers, or Martin Feldstein's role at AIG (the link leads you to a cute note on how the Harvard buddy system works), etc).
Of course, they are not alone. That is to say, at the top of the economics discipline there is a considerable rot that suggests that in many way the discipline behaves more like a racket than a science, as one of my favorite right-wingers, Gordon Tullock, argued in The Organization of Inquiry.
And here is the weirdness: philosophers have spent a huge amount of energy exposing psycho-analysis, intelligent design, and Marxism as pseudo-science, yet we remain remarkably reluctant to say anything about our good friends, the economists. (Of course, as we reported here, some of us live in a glass house.)
You may recall that I was rather critical of the Harvard economist Mankiw on this blog recently. In my piece I quoted Mankiw in a concessionary way, "it is also a standard result that in a competitive equilibrium, the factors of production are paid the value of their marginal product. That is, each person’s income reflects the value of what he contributed to society’s production of goods and services." I then argued, "Well, yes, this is true, and the theoretical work of "Gerard Debreu and Herbert Scarf" (1963) does allow one to see that "if the freedom to exit a society is taken as axiomatic, then the only permissible allocations of resources are the competitive market equilibria." I then went on to show why this provides no support for just-desert theory in the real world.
But as the distinguished mathematical economic theorist, M. Ali Khan (Johns Hopkins) (whose writings on the shared history of philosophy and economics are a must read to anybody serious about these matters) pointed out to me, "the Debreu-Scarf] theorem is false (first noticed explicitly by Foley of the New School) in the presence of public goods." (See Foley's piece here; see especially the conclusion. See also Muench 1972) Mankiw's whole appeal to Debreu/Scarf should be understood rhetorically (now in pejorative sense): cite some esoteric/technical literature in order to silence opponents and assume that the real experts are too polite to call you out (or maybe he misremembered from graduate school?)!
UPDATE: In an early version of this entry, I wrote "Since Mankiw's argument tendentiously ignores the contribution of public goods." Professor Mankiw kindly and correctly points out that he does discuss public goods in his piece. (In particular, to argue for progressive taxation and transfers to the poor.)
In fact, in his piece, Mankiw discusses Lindahl's work, so it all the more puzzling he chose to make his argument in terms of Debreu/Scarf.
One of the most exciting young philosophers of economics, Anna Alexandrova, recently called my attention to a blog "the Moral Heart of Economics," by EDWARD L. GLAESER (A Chicago trained Harvard Economics profesor) in the New York Times. Glaeser's piece makes a historical argument about Adam Smith, J.S. Mill, and Milton Friedman, and a separate conceptual argument about the nature of welfare economics. The bottom line of both arguments is that "freedom" is treated "as a fundamental good, a thing to be valued for itself" in economics. (It turns out that in Glaeser "freedom" means more choice; more about this below.) Because that's 'how freedom is treated at the very heart of economic theory." Both arguments are flawed, and they are flawed for revealing reasons. (Last week I also criticized a Harvard economist, but this week my tone will be more businesslike. While Glaeser's rhetoric is self-serving mythology, he should be applauded for trying to think out loud about the moral foundations of economics.) I will start with the historical claims about Smith, Mill, and Milton Friedman, although I take no pleasure in correcting economists lack of understanding of the history and philosophy of their own discipline. So, some may want to skip to the argument about welfare economics, which I will discuss in light of a now forgotten but very intense debate between two then-future Nobel laureates, Paul Samuelson and George Stigler in 1943.
I may be in a vile mood this week (probably because the decision-theoretical mafia within philosophy does not deem my methodological-historical work on Chicago economics "philosophical"--about which another time.) Anyway, this week I aim my critical fire at the deplorable state of the debate among leading contemporary economists about the philosophic underpinnings of public policy. I will use the Presidential Address (at the Eastern Economics Association) by Gregory Mankiw as exhibit A. It is an instance of specialization without any (openness to intellectual) gains from trade--which provides me with the title of this blog. (In passing I'll call attention to Rawls' deep knowledge of economics.) The ad personam kicker of this week's entry will be in the final paragraph below where I will suggest that Mankiw's naked financial self-interest may be a further proximate cause behind his superficial theorizing. But first let me show how when he comes to normative theory, he deploys standard economics theory in ideological fashion.
Mankiw (who has a widely read blog) teaches at Harvard; his most famous papers are contributions to so-called growth theory. (I have to admit that I view most of that work as dressed up curve-fitting, but at least it's empirical.) Anyway, his presidential address takes aim at utilitarian justification for wealth transfer in order to advocate a just deserts account.