Thursday, December 06, 2007

Recognizing a Theory

In looking at colleges for my daughter, one of the things I do is to drop into the economics department and get into a conversation with one of the professors. Part of the reason is that "economist" is in some ways an ethnicity--I have things in common with other economists that I don't have in common with most other people, making it easier to talk with them and get them to talk with me.

A second reason is that I want to know how tolerant the college's culture is of intellectual diversity. Economics as a science is neither right wing nor left wing--there have been good economists who were socialists, good economists who were extreme libertarians. But it is, in a very real sense, its own ideology.

It is almost impossible to be a good economist and accept traditional conservative arguments against free trade--because those arguments depend on not understanding economic ideas worked out nearly two hundred years ago. It is almost impossible to be a good economist and accept common left wing rhetoric about "people not profits" or the equivalent--because a good economist knows that the argument on the other side isn't about profits as an end in themselves but about profits as part of a signaling system that results in benefits for people. A left wing economist might think that system works poorly and can be improved by proper government intervention--but he knows that the standard rhetoric misrepresents the position it argues against.

One consequence is that a good economist is almost certain to find himself in conflict with the left wing orthodoxy that dominates the sort of top liberal arts colleges we have been looking at--just as he would be almost certain to find himself in conflict with the right wing orthodoxy that (I presume) dominates some Christian fundamentalist schools. So talking to economists at a school gives me some feel for how that school's culture treats heretical views.

The point was initially brought home to me in a conversation with an economist at one of the colleges we visited who may, for all I know, be a liberal Democrat. She was commenting on the difficulty of teaching environmental economics to students who viewed pollution as a sin, not a cost. Her view of the subject differed from theirs not because she was right wing or left wing but because she was an economist.

It later occurred to me in a different context that there is a more general point buried here. The context was the book The Moral Animal, an interesting exposition of the implications of evolutionary biology, in particular evolutionary psychology. The author argued, I think correctly, that while evolutionary biology is often thought of as a right wing approach, some of its implications provide arguments for left wing positions.

The general point is that one way of recognizing a real scientific theory--in the broad sense in which neo-classical economics, or evolutionary psychology, can be thought of as a single theory--is by its inconsistency with other theories, similarly defined. If a particular point of view is merely a smokescreen for right wing, or left wing, views, it will conveniently produce arguments all of which support the same side. If it is a real theory, an internally consistent body of ideas for making sense of the world, on the other hand, it is almost certain to clash with other ways of making sense of the world. Both evolutionary psychology and neoclassical economics pass the test.

In principle this would not be true of two theories both of which were entirely true. But that is not likely to be an exception of much real world significance.


Kevin Carson said...

A couple of caveats:

What most economists conventionally think of as "free trade" isn't really free trade at all. And ditto for what the left-wing orthodoxy means by "free trade." In both cases, the tendency is to take at face value the neoliberal "free trade" rhetoric as applied, by politicians and journalists, to corporate globalization.

Considering the extent to which international trade is currently subsidized, genuine free trade would probably result in a lot less of it. The main purpose of World Bank loans, along with a great deal of foreign aid, is to subsidize the utility and transportation infrastructure without which foreign capital investments could not be profitable. And it's probably not by coincidence that the most profitable and flourishing sectors of the global economy are those industries dependent either on "intellectual property" [sic] monopolies (software and entertainment), direct government subsidies (agribusiness and arms), or both (electronics, biotech and pharma). Another effect of "intellectual property" is to create artificial "comparative advantage" by setting up tollgates to impede the free flow of knowledge and technique.

My guess is that if all trade had to be done on the nickels of those directly engaged in it, we'd be buying a lot more stuff produced by small-scale industry close to where we live.

Anonymous said...

"She was commenting on the difficulty of teaching environmental economics to students who viewed pollution as a sin, not a cost."

Unless their response was positively disruptive and/or a complete closing of the mind, I'm not sure why thinking of it as a sin should create such serious difficulty. Most students are, presumably, capable of discussing the economics of law enforcement?

If so, consider the 'sin' of murder - the wilful and malicious taking of another person's life. I think that most people, rightly, do consider this a 'sin' - something that is simply forbidden, for which no pretext or alleged side-benefit is a justification. Sure, one can argue cases, but the general principle is pretty well accepted.

Of course it doesn't follow from this that preserving any given human life, or saving it from murder, has infinite value - it does not loom particularly large among most people's endeavours, after all. We can talk about the costs imposed by a murder, or murder in general upon a population, and in some ways hope to quantify them. We can move onto the costs and benefits of various methods of preventing murder, and discuss which it might be rational to adopt. I don't see how this is inconsistent with the 'sin' status of murder - an act which it remains flatly tabu for any person or group to perform.

Why can't a student with the same view of (some) acts of pollution be led to discuss environmental economics in a similar spirit?

I grant that if they claim that *all* harm to 'the environment' is equally forbidden, and maintain the further absurd claim that mere animal existence doesn't involve a modicum of such harm, there appears to be small grounds for rational discussion. But even in my experience of student whackiness, this seems whacky beyond all likely bounds; and for students not skipping quite so blithely off to the world's flat edges, even the trivial 'animal existence' argument is surely wedge enough to bring economic thinking in?

Anonymous said...

"Unless their response was positively disruptive and/or a complete closing of the mind, I'm not sure why thinking of it as a sin should create such serious difficulty."

Unfortunately, I think there are many highly educated individuals who will exclaim "how can you talk about it as a cost when it's a crime against humanity!"

There is an anti-intellectual attitude that brands any attempt at quantitative reasoning as cold-hearted or as a rationalization of capitalist greed.

I grew up in Sweden where this attitude was dominant in any discussion of health care and other things during the seventies and eighties. Today, I'm happy to report, Sweden is a bit more open, more rational, and more capitalist.

Will McLean said...

I don’t think the argument works. To the extent that Classical Economics is a definable group of beliefs, it both supports and contradicts the beliefs of particular left wing factions or right wing factions, such as the typical beliefs of Ivy League English departments. But the same is true of orthodox Catholicism or Wahabism, and vice versa.

Anonymous said...

In my experience, a rational discussion of the costs and benefits of various bits of anti-murder sanctions (abortion aside) is not usually perceived by either in good vs evil terms.

People who consider pollution a sin to be stamped out also generally think of people who disagree with their positions as, at best, sinners, and at worst, positively evil.

David Friedman said...

Will points out that both orthodox Catholicism and Wahabism pass my test. I agree, but don't see why that is a problem. It isn't a test of truth, after all, but of independence.

Neither of those sets of ideas is merely a proxy for left or right wing views or, so far as I know, any other preexisting set of ideas.

Anonymous said...

It's ironic that Friedman complains of left-wing orthodoxy in academia when the people on the far left decry the right-wing orthodoxy of economists. Profits are more important than people, come on! :)