I’m not out to defend Lynn (I’m not as familiar with his work as Frank, so I’ll leave that to him), and I happen to agree with much of what you say here. Indeed, I’m probably more concerned to make a few broader philosophical points than I am to argue the merits of specific arguments in economics between economists. But I assume you also agree that even decisions about ‘how something works at a deep level’ and ‘the way the real world works’ are shot through with questions of value (not in the economist’s sense!) in so far as, in the words of the late Robert Nozick, ‘Values enter into the very definition of what a fact is; the realm of facts cannot be defined or specified without utilizing certain values. Values enter into the process of knowing a fact; without utilizing or presupposing certain values, we cannot determine which is the realm of facts, we cannot know the real from the unreal.’ Hilary Putnam, for instance, has shown how even the seemingly innocuous statement, ‘the cat is on the mat, ‘employs conceptual resources—the notions “cat,” “on,” and “mat”—which are provided by a particular culture, and whose presence and ubiquity reveal something about the interests and values of that culture, and of almost every culture.’ Perhaps this point is well understood, but I suspect it is not. In addition, as Nicholas Rescher reminds us, ‘We have to come to terms with epistemic realities, which include:

·the diversity in people’s experiences and cognitive situations

·the variation of “available data”

·the underdetermination of facts by data (all too frequently insufficient)

·the variability of people’s cognitive values (evidential security, simplicity, etc.)

·the variation of cognitive methodology and the epistemic “state of the art”

Such factors—and others like them—make for an unavoidable difference in the beliefs, judgments, and evaluations even of otherwise “perfectly rational” people.’ Of course none of this undermines the importance of ‘positive’ work (after all, the ‘entanglement’ thesis of fact and value is not at the same time a ‘conflation’ thesis) nor the very real virtues of objectivity and rationality.

I’m not out to defend Lynn (I’m not as familiar with his work as Frank, so I’ll leave that to him), and I happen to agree with much of what you say here. Indeed, I’m probably more concerned to make a few broader philosophical points than I am to argue the merits of specific arguments in economics between economists. But I assume you also agree that even decisions about ‘how something works at a deep level’ and ‘the way the real world works’ are shot through with questions of value (not in the economist’s sense!) in so far as, in the words of the late Robert Nozick, ‘Values enter into the very definition of what a fact is; the realm of facts cannot be defined or specified without utilizing certain values. Values enter into the process of knowing a fact; without utilizing or presupposing certain values, we cannot determine which is the realm of facts, we cannot know the real from the unreal.’ Hilary Putnam, for instance, has shown how even the seemingly innocuous statement, ‘the cat is on the mat, ‘employs conceptual resources—the notions “cat,” “on,” and “mat”—which are provided by a particular culture, and whose presence and ubiquity reveal something about the interests and values of that culture, and of almost every culture.’ Perhaps this point is well understood, but I suspect it is not. In addition, as Nicholas Rescher reminds us, ‘We have to come to terms with epistemic realities, which include:

·the diversity in people’s experiences and cognitive situations

·the variation of “available data”

·the underdetermination of facts by data (all too frequently insufficient)

·the variability of people’s cognitive values (evidential security, simplicity, etc.)

·the variation of cognitive methodology and the epistemic “state of the art”

Such factors—and others like them—make for an unavoidable difference in the beliefs, judgments, and evaluations even of otherwise “perfectly rational” people.’ Of course none of this undermines the importance of ‘positive’ work (after all, the ‘entanglement’ thesis of fact and value is not at the same time a ‘conflation’ thesis) nor the very real virtues of objectivity and rationality.

I might also note that while I do not think all developments in economics since Smith have been to the good, lets not go too far with our critique of the positive here. For the purposes of policy analysis, understanding how something works at a deep level ought be a precondition to telling everyone how the thing should work, no? In fact, understanding the ACTUAL impact of particularly policies can held shed some light on very serious ethical problems. For a classic example that Frank and I like to chat about from time to time: that barring compensation in organ markets increases the number of deaths while folks wait for organs. Or how about in antitrust: taking Lynn’s view of competition and prices seriously would reduce consumer welfare. If this is all economists have to offer (i suggest it is not), isn’t this incredibly valuable? Frank and Lynn seem to think so — it is just that Lynn’s normative vision doesnt match up with the way the real world works.

My point was a simple one: economics is a powerful tool for understanding real world phenomena; hand waving is not. This doesnt mean economics can do everything (who would expect that in a field that is about specialization?) or that other disciplines cannot offer valuable insights.

So, offer your critiques of economics. I’ve offered my examples of economists who have done exactly those things that Lynn claims are missing from economics (though I dont claim they are equally prevalent across ALL fields). There is all sorts of serious debate that can be had if one wants to take the question seriously. But I would suspect that no serious scholar would find anything to endorse in Lynn’s style of “analysis.”

For one example with regard to the importance of clarity regarding ethical and normative concerns and how those relate to and are entangled with the descriptive and analytical questions intrinsic to economics in particular, you might read Sen’s book above, but especially chapter 3, ‘Fact and Value in the World of Amartya Sen,’ in Hilary Putnam’s The Collapse of the Fact/Value Dichotomy and Other Essays (Cambridge, MA: Harvard University Press, 2002), pp. 46-64. See too Sen’s recent book, Rationality and Freedom (Cambridge, MA: Belknap Press of Harvard Univ. Press, 2002). Because neoclassical economics is often taught without directly addressing normative questions it takes for granted or puts aside (one textbook I had in college stated in the introduction: “There are two kinds of economics: normative and positive, this books deals with positive economics.” But of course there were/are no books about “normative economics,” at least in the neo-classical economics curriculum, and the distinction becomes an untenable gulf, rather than an acknowledgement that positive/analytical and normative/ethical questions are bound up with each other…. Sen’s work here makes constant reference to Adam Smith and what has been ‘lost’ or ‘forgotten’ in the development of economics as a science and profession since the time of Smith (and is retained in the notion of ‘political economy’).

For one example with regard to the importance of clarity regarding ethical and normative concerns and how those relate to and are entangled with the descriptive and analytical questions intrinsic to economics in particular, you might read Sen’s book above, but especially chapter 3, ‘Fact and Value in the World of Amartya Sen,’ in Hilary Putnam’s The Collapse of the Fact/Value Dichotomy and Other Essays (Cambridge, MA: Harvard University Press, 2002), pp. 46-64. See too Sen’s recent book, Rationality and Freedom (Cambridge, MA: Belknap Press of Harvard Univ. Press, 2002). Because neoclassical economics is often taught without directly addressing normative questions it takes for granted or puts aside (one textbook I had in college stated in the introduction: “There are two kinds of economics: normative and positive, this books deals with positive economics.” But of course there were/are no books about “normative economics,” at least in the neo-classical economics curriculum, and the distinction becomes an untenable gulf, rather than an acknowledgement that positive/analytical and normative/ethical questions are bound up with each other…. Sen’s work here makes constant reference to Adam Smith and what has been ‘lost’ or ‘forgotten’ in the development of economics as a science and profession since the time of Smith (and is retained in the notion of ‘political economy’).

That’s a fair point, Frank … but let me be clear in response:

I don’t want to write him off because he has a vision of this, that or the other — there is nothing particularly special or alarming about having such a vision. I want to write him off because he attempts to dress up his conclusory assertions about the way the world should look like according to this vision as ANALYSIS.

What Lynn offers is not analysis. It is hand waving at its very best. To purport to criticize a discipline in this fashion without understanding it at an even rudimentary level is not just bad form, it is misleading and intellectually dishonest.

I am quite happy to leave Lynn to his ruminations about economic justice. I’m just asking for truth in advertising and disclosure here, Frank. Heck, cognitively biased consumers of economics literature might even take this stuff seriously!

Social scientists who offer a view of the “truth” through real analysis should not be crowded out by this style of rhetoric. So, lets take both forms of proferred analysis very seriously and call them out for their strengths and weaknesses (you and Patrick have done so here, right?) and be honest about them.

The truth of the matter is that economics has long been capable of addressing the questions Lynn raises and has been doing so for a very long time. See, e.g. Alchian, Becker, Demsetz, North, Coase, Klein, Williamson, Stigler, …

To be perfectly honest, I admit that I dont know what you mean by social scientists who have some normative foundation guiding their work. But if Lynn is an example of this, I’ll pass.

http://press.princeton.edu/titles/7946.html

“Inequality has increased between nations over the last half century (richer countries have generally grown faster than poorer countries). . . [And] over the past two decades inequality within countries has increased.”

For Josh: I have trouble with the Lynn article, too. I wish he’d looked at the IO literature, but perhaps he looks at it in other work. I have to say that one work of IO I recently perused, Richard Caves’s Creative Industries, strikes me as a great work of scholarship in the econ field.

For Josh and Patrick: The relationship between ideology, facts, and values here is a difficult one. I don’t think one can write off Lynn just because he clearly has a vision of economic justice that he wants to see implemented. And I think that many of the thinkers Patrick cites may be sympathetic with the idea that perhaps we should only pay heed to the work of social scientists who have some normative foundation guiding their work.

Do you have a cite for your contention about the growth in global inequality? Most of the work I’ve seen (by Sala-i-Martin, for example) says that while within-country income inequality is increasing somewhat, global inequality has gone down over the past decades (fueled largely by the growth in China and, to a lesser extent, India).

Myself, I think it’s fairly ludicrous to argue that the failure of some parts of the income distribution to grow as fast as others is in any sense comparable to the 30% drop in economic output that occured in the Great Depression, but perhaps you disagree.

Uh oh. I’ve done that for short periods of time. I was going to do so again this past summer, but a certain someone stopped me.

I think it is important not to conflate these two. Many people conducting “cute” research are quite aware of the details of legal and other institutions and in fact often rely on these details to construct instruments for their econometric analysis.

I am sympathetic to the view that the economics profession as a whole might be better off with greater attention paid to larger problems. But for what it is worth, do not agree with the claim that Freakonomics is in the least bit responsible for this trend, and disagree strongly with the proposition that Levitt or Freakonomics has made economics worse off.

As to the second critique re: the role of institutions in economic analysis. The state of affairs is not so depressing as Lynn suggests. I would suggest that Lynn (and Frank, who appears to endorse Lynn’s position) spend some time in the industrial organization literature (for one). Folks have been thinking about institutions in economic analysis for a quite some time there and have addressed exactly the questions that Lynn wanted answered.

The problem, I suppose, is that the research did not produce the answers Lynn wanted or confirmed his priors: industrial concentration did not always end in bad results, and more often than not, it was demonstrated that it could make consumers better off.

But I think the second critique here avoids at least 50 years of important work by some very good economists. The larger problem, I think, especially for law and economics, is the fetishization of formal economics that has distracted some of the profession from thinking about new, important problems (despite some of its benefits).

But I really appreciated Scheiber’s questioning of the extrapolability of such studies. For example:

“[A] forthcoming AER paper finds that catalog shoppers overindulge in cold-weather clothing when the temperature abruptly drops. These papers invariably predict that such irrationality will recur in more meaningful contexts–for example, in decisions about jobs or home purchases. Maybe. On the other hand, maybe the only reason people behave irrationally when buying snow boots is that no one gives a damn about snow boots. At least not the way they give a damn about their jobs and houses.”

Here’s a few other questions Scheiber raises:

“Many of these papers deal with sexy topics like corruption and, well, sex. One top journal recently published a paper deducing that Iraq had received billions in kickbacks from rogue buyers under the Oil-For-Food program. . . . .[T]he fact that Saddam Hussein would try to profit from a scarce commodity, or that people might pay extra for services they value more, will surprise no one who has opened an economics textbook lately.”