Economics departments — turning out generation after generation of idiot savants

Economics departments — turning out generation after generation of idiot savants.

from Lars Syll  — reposted from RWER blog. 

Paul Samuelson once claimed that the ergodic hypothesis is essential for advancing economics from the realm of history to the realm of science.

That view on what constitutes economics doesn’t please neither yours truly nor Nassim Taleb, who writes (emphasis added):

However, if you believe in free will you can’t truly believe in social sci­ence and economic projection. You cannot predict how people will act. Except, of course, if there is a trick, and that trick is the cord on which neoclassical economics is suspended. You simply assume that individuals will be rational in the future and thus act predictably. There is a strong link between rationality, predictability, and mathematical tractability …

In orthodox economics, rationality became a straitjacket … This led to mathematical techniques such as “maximization,” or “optimization,” on which Paul Samuelson built much of his work … This optimization set back social science by reducing it from the intellectual and reflective discipline that it was becoming to an attempt at an “exact science.” By “exact science,” I mean a second-rate engineering problem for those who want to pretend that they are in the physics department— so-called physics envy. In other words, an intellectual fraud

The tragedy is that Paul Samuelson, a quick mind, is said to be one of the most intelligent scholars of his generation. This was clearly a case of very badly invested intelli­gence. Characteristically, Samuelson intimidated those who questioned his techniques with the statement “Those who can, do science, others do methodology.” If you knew math, you could “do science” … Alas, it turns out that it was Samuelson and most of his followers who did not know much math, or did not know how to use what math they knew, how to apply it to reality. They only knew enough math to be blinded by it.

Tragically, before the proliferation of empirically blind idiot savants, interesting work had been begun by true thinkers, the likes of J . M . Keynes, Friedrich Hayek, and the great Benoît Mandelbrot, all of whom were displaced because they moved economics away from the precision of second-rate physics. Very sad.

 

This may sound harsh, but in fact already back in 1991, Journal of Economic Literaturepublished a study by the Commission on Graduate Education in Economics (COGEE) of the American Economic Association (AEA) — chaired by Anne Krueger and including people like Kenneth Arrow, Edward Leamer, Robert Lucas, Joseph Stiglitz, and Lawrence Summers — focusing on “the extent to which graduate education in economics may have become too removed from real economic problems.” The COGEE members reported from own experience “that it is an underemphasis on the ‘linkages’ between tools, both theory and econometrics, and ‘real world problems’ that is the weakness of graduate education in economics,”  and that both students and faculty sensed “the absence of facts, institutional information, data, real-world issues, applications, and policy problems.” And in conclusion they wrote (emphasis added):

The commission’s fear is that graduate programs may be turning out a generation with too many idiot savants skilled in technique but innocent of real economic issues.

Sorry to say, not much is different today. Economics education is still in dire need of a remake!

Advertisements
4 comments
  1. Bruce E. Woych said:

    ‘In Greek mythology, Procrustes (Προκρούστης) or “the stretcher [who hammers out the metal]”, also known as Prokoptas or Damastes (Δαμαστής) “subduer”, was a rogue smith and bandit from Attica who physically attacked people by stretching them or cutting off their legs, so as to force them to fit the size of an iron bed. In general, when something is Procrustean, different lengths or sizes or properties are fitted to an arbitrary standard http://en.wikipedia.org/wiki/Procrustes.” The Bed of Procrustes: Philosophical and Practical Aphorisms is a philosophy book by Nassim Nicholas Taleb. “His book The Bed of Procrustes summarizes the central problem: “we humans, facing limits of knowledge, and things we do not observe, the unseen and the unknown, resolve the tension by squeezing life and the world into crisp commoditized ideas http://en.wikipedia.org/wiki/Nassim_Nicholas_Taleb.”.Economics should be concentrating upon FAILING ECONOMIC SOCIAL STRUCTURES that are serviced by destructive concentrations of harmonizing political economies of scale, but instead has been generating academic business successes under a progressive (and aggressive) uptick in financialization and brokering success as economic agents and managers
    (see: http://en.wikipedia.org/wiki/Financial_economics for the true model of what economics is centered upon). Meanwhile, the dynamics of sand and oil could demonstrate how far society itself is away from economics…not the other way around: (see:http://www.mongabay.com/history/saudi_arabia/saudi_arabia-diversity_and_social_stratification.html)
    Saudi Arabia-Diversity and Social Stratification.
    Incidentally: when was the last time we saw the “economics” of poverty and survival ???

  2. Bruce E. Woych said:

    Worth noting…

    Economics of Poverty and Discrimination, [9th Edition] by Schiller, Bradley R. [Prentice Hall,2003]

    Poverty and Income Distribution by Edward N. Wolff (Dec 31, 2008)

    The Economics of Inequality, Discrimination, Poverty and Mobility by Robert S. Rycroft (Jul 30, 2009)

    Making Americans Healthier: Social and Economic Policy as Health Policy (The National Poverty Center Seriesin… by Robert F. Schoeni, James S. House and George A. Kaplan (Feb 18, 2010)

    The Undeserving Poor: America’s Enduring Confrontation with Poverty: Fully Updated and Revised by Michael B. Katz (Oct 31, 2013)

    The Economics of Inequality, Poverty, and Discrimination in the 21st Century [2 volumes] by Robert S. Rycroft
    (Mar 7, 2013)

  3. Bruce E. Woych said:

    Ecological Economist Joan Martinez-Alier, Professor, Department of Economics and Economic History,
    Universitat Autonoma de Barcelona, Spain

    The Environmentalism of the Poor: A Study of Ecological Conflicts and Valuation (October 26, 2003)
    by Juan Martinez-Alier
    [quoted From the book description]
    “The Environmentalism of the Poor has the explicit intention of helping to establish two emerging fields of study political ecology and ecological economics whilst also investigating the relations between them.

    The book analyzes several manifestations of the growing environmental justice movement , and also of popular environmentalism and the environmentalism of the poor , which will be seen in the coming decades as driving forces in the process to achieve an ecologically sustainable society.
    The author studies, in detail, many ecological distribution conflicts in history and at present, in urban and rural settings, showing how poor people often favor resource conservation. The environment is thus not so much a luxury of the rich as a necessity of the poor. It concludes with the fundamental questions: who has the right to impose a language of valuation and who has the power to simplify complexity? “

  4. David Harold Chester said:

    The idea of education is so that would-be students who seek knowledge can find out about their subject form the experience and knowledge of others who are more expert. So instead of all the fuss about what should be taught, why not ask the students what they want to know?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: