Via Stephen Kinsella’s twitter feed I got linked to this, by Noah Smith.
The piece is worth a read but the overwhelming message that I get from the discussion is that some macro economists do not want to engage in discussion with people outside the macro-economic tribe because they don’t know enough about macro economics. I think this is probably wrong.
Most people’s lives are directly affected by macro economic policy. Whether you want to claim that macroeconomics is generally descriptive, the fact remains that elements of macroeconomic research and ideas pervade macro economic policy for most governments. Those policies, with the best will in the world, can rarely be roadtested on a few people, so effectively, every time a government announces a shift in macro economic policy, it is a gamble, and that gamble directly affects people’s lives. There is no lab in which you can really experiment.
So.
I used to work in IT on operations support – this means making sure things keep working on an ongoing basis. Mostly, things kept working. It’s when things don’t work, that you find out where people’s strength’s, and where an organisations strength’s lie. Ultimately, major problems were extremely rare occurrences, and were always the cause of some learning. This is important. You could argue, for example, that if the lessons learned from the great recession of the 1930s were absolutely learned from, we wouldn’t have had the latest iteration of great recession. The narrative around that is pretty much history repeating itself, and people not learning from history. Most of the protections put in place after 1929 and its fall out were basically unpicked. Would we have had the economic crash of the 00s if that hadn’t happened? Probably not. We might not have seen a lot of the growth of the previous 20 years either. Arguably, you can question whether the growth was worth more than the ensuing cost. I don’t think there is a straight answer and if an economist told me there was, I’d question the grounds on which he made that assertion.
Macroeconomics is a large part of everybody’s lives. I think economists need to recognise this, and recognise that a key result of that is that people will have opinions on macro economics. You can, as at least one has done on twitter, argue that macro is descriptive rather than prescriptive. To do so, however, is not strictly speaking, intellectually honest. Macroeconomists do advocate for particular types of economic policies, often depending on their general ideological leaning. I am not a great fan of the labels right and left because I think they tend to be overly simplistic, but there are certainly some economists who see things from a small government, laissez-faire point of view, and some who see a certain amount of regulation being of use. Economists are fundamentally tribal. You can see it in their own labels for themselves; whether they are Keynesian or Austrian school for example. What large groups of macroeconomists often cannot do is agree on things.
If they are fundamentally descriptive in activity rather than prescriptive, from the outside, this is troubling. If, of course, they are not purely prescriptive, but biased per a particular world view, this is not surprising.
I have somewhat complex feelings about non-experts weighing in on matters requiring expert knowledge. This tends to be very troubling when it comes to assertions over various health matters (cf, vaccination, cf, nutrition as two examples of areas where non-experts (putting it kindly) have caused a lot of damage). One of the things I feel people need to learn to be aware of is where their knowledge ends and their learning needs to start. As such, I’m not sure that computer science graduates are qualified to give nutritional advice, for example. So I have some sympathy with the poor macroeconomist, a target of the great unwashed in society, daring to voice an opinion on their subject.
However, I do think that macro economists also need to recognise where their expertise ends and starts, the limitations in their field of study, the issues caused by their field of study. One of the biggest issues I have with economics as a field of study as a whole is the tendency for people’s thinking to be coloured by ideological views. I don’t know how many economists would recognise that this happens but it does. The tribalism that exists within the field could not exist otherwise. The net result is you see assertions coloured by those views rather than data, and data sweated to support those views. Historically, there is no evidence that neoliberalism is always right, or always wrong. Most neoliberalists will never understand that as a tool it is only sometimes appropriate, and at those times where it is not, they assert the problems are caused by non-pure application of neoliberal policies. People’s lives get damaged by absolutism like that.
In the meantime, macroeconomics is not the same as high level physics, nor high level mathematics. It impacts on people’s lives in a way that the latter do now. Additionally, a high level understanding of macro economics is not outside the capability of most people. I do not think that the world is helped by macroeconomists retreating into a world where they only talk to other macroeconomists about economics. In certain respects, they enjoy a position which most serious academic physicists (Brian Cox being a notable exception) do not, which is that people are interested in and have an opinion on their field of study.
Instead of fighting against it, and more importantly, moaning about it, maybe they should embrace it.