economists who sell snake oil

Oxford economist Simon Wren-Lewis is pessimistic about the future of economics as an academic discipline.

Greg Mankiw is known to every economist and economics student, if only because of his best selling textbook. John Taylor is known to every macroeconomist, if only because of the large number of bits of macro with his name on it (Taylor rule, Taylor contracts etc). Both are respected by other academics because of the quality and influence of their academic work.

With two others, they recently wrote this about the Obama administration’s attempts to stimulate the economy through fiscal policy after the recession: “The negative effect of the administration’s ‘stimulus’ policies has been documented in a number of empirical studies.” They then quote from two studies. … No other studies are directly referred to. That might just be because the overwhelming majority suggest that the stimulus package worked. ….

Now the quote comes from a paper prepared for the Romney presidential campaign. It is clearly political in tone and intent. As both academics are Republican supporters, it may therefore seem par for the course. But it should not be. ….

This is sad, because it tells us as much about economics as an academic discipline as it does about the individuals concerned. In the past I have imagined something similar happening in physics…, if it did, the academics concerned would immediately lose their academic reputation. …. Responding to evidence rather than ignoring it is what distinguishes real science from pseudo science, and doctors from snake oil salesmen.

Simon Wren-Lewis:, “Giving Economics a Bad Name“, Mainly Macro, 9 August 2012.

HT Mark Thoma.

FT columnist Martin Wolf, commenting on this post (9 August 2012 06:55) wrote that economics, unlike physics, is inherently ideological:

You [Simon Wren-Lewis] are being naive.

Physicists are not god: they cannot change the universe, merely seek to understand it. Economists do play god: they seek to change the economy, not just understand it. Physicists can manipulate nature. They cannot create it. Economists seek to do both.

Of course, physics was also inherently ideological in a world in which it was taken for granted that some authority (Aristotle, the Bible or something else) had determined how nature works. But the last time that was true in Europe was the 17th century. Even in biology, it is possible to imagine a world in which evolution is simply accepted as true. But economics is always going to be ideological, because it is always going to be about how societies should be run. It is inherently ideological in a way that physics or biology is not.

Economists need to accept this.

I agree. Economics is not a true science. It resembles engineering more than it resembles physics. Readers need to remember that the writings of economists are sometimes (often?) ideological tracts dressed up in the language of science.

Update: Simon Wren-Lewis responds to Martin Wolf.

Martin Wolf comments that it would be naive to think that economics could ever be as free from ideological or political influence as science or engineering, and I agree. However that does not mean that it is wrong to try and expose and reduce that influence. So it is therefore interesting if the influence of right wing politics and free market ideology is less powerful in some parts of Europe than it is in the US. Unfortunately I have little idea quite why that is and what it implies.

Simon Wren-Lewis, “Why do European Economists write Letters while US Economists Endorse Candidates“, Mainly Macro, 16 August 2012.


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