uphill battles

Killing EJMR, redux

/ jdc / 2 Comments

Once again economics Twitter is being forced to confront the racist, misogynistic, and abusive website called Economics Job Market Rumors. This time the catalyst is abuse directed towards graduate students who have been discussing how to advocate for anti-racist changes in their home institution. This is taking place in the context of anti-racist protests and the Black Lives Matter movement across the U.S. and the world, and the associated discussions of the economics of racism and racism within economics.

Three years ago I wrote about killing EJMR in the context of its misogyny, where it is a symptom of toxic attitudes in the profession at large.Now we are talking about its racism, where EJMR is a symptom once again. Two resources to begin to learn more about the broader context of racism within the profession is William Spriggs’s open letter to economists and Lisa Cook’s work on how the economics profession excludes Black women. I argued before that, in addition to taking positive steps to enhance diversity in our ranks, we could take concrete steps to reduce the demand for EJMR by better supporting students. I want to continue to make that argument here.

I’m reluctant to give oxygen to the dumpster fire that is EMJR. I want to make quite clear that I think that to the extent possible we should never, ever visit the site. Clicks and traffic are the currency of the internet, and we should not spend ours there. I realize that sometimes it is unavoidable—when targeted abuse is being perpetrated, for example, we may have to learn what is being done in order to combat it and protect its victims. But I felt like I wanted to write about it once more to continue to advocate for changes in our behavior and mindset as economists that might contribute to undermining the site.

When we as economists find ourselves in situations where we have power or privilege—because of our professional role, our status in the profession or our institutions, our appearance to the world—we can try to use our power or privilege in a positive way. I want to suggest a few ways in which I think we might be able to, slowly but surely, diminish the influence of EJMR and the role it plays for graduate students by taking concrete actions.

  1. Intervene and speak up in a constructive way when an economist speaks or acts in an explicitly or implicitly racist and sexist way.

When we witness discrimination, harassment, or marginalization, we should try to say something to try to contribute to a change in attitude or behavior. I think this is important because it shows the person who has displayed implicit or explicit bias that you notice, you care, and you would prefer them to behave differently in the future. Even small acknowledgements could make a big cumulative difference, particularly if you belong to a common in-group with the person whose words or actions were offensive or damaging.

It can be exhausting or humiliating to have to engage with racist or sexist attitudes in a respectful way. But we have to do so, particularly because members of the groups being targeted don’t have a choice. They have to navigate the dilemma of speaking up or staying silent in the face of those attitudes every time they hear them.

2. Understand and engage with the fears and insecurities of non-“superstar” graduate students and job market candidates.

If we are in contact with graduate students in our home institutions or at conferences and so on, we must talk to and engage with all grad students. We must not neglect those who are not perceived to be on a trajectory to a top department, top publications, and positions of power.

This is important because economics is a rigidly hierarchical profession and doctoral programs tend to inherently valorize the narrative of academic superstardom. It can be discouraging and scary to be a graduate student in general, but it can be worse for those who are either implicitly or explicitly told by their home department that they are lesser in the eyes of those who should be their mentors and teachers. It is not enough that departments have some faculty who are “nice” to grad students—when there are some faculty members who treat graduate students as the embodiment of their research and not as people, it becomes clear to students that this is a risk that they may face in the profession.

3. In job searches and in hiring, be as transparent as possible with candidates at every step of the process.

This is important because the job market for graduate students is intimidating and stressful but also opaque. An alleged reason for EJMR to exist is to provide scraps of unverified information to anxious students as they navigate a process that, unfortunately, is cruelly deterministic of their professional future.

We have to do this even when it makes our lives as recruiters more difficult or more inconvenient. I understand why we don’t want to tell candidates that interview offers have all been made or that a job offer has gone out to a particular candidate. But it is a generous and kind act to do so, and it undermines a key role that EJMR plays for grad students, even those students who do not at all subscribe to the abusive attitudes and behaviors that flow from the site. We’ve seen a rise in the use of hashtags like #EconJobMarket to try to increase the flow of public information in the last few years, and I think that kind of thing is a nice way to try to reduce demand for EJMR at the margin.

4. Learn, understand, and internalize the truth that there are many ways to be a good, successful, fulfilled economist.

There are many paths to a successful career as an economist—not just becoming a “top academic researcher” with “top publications” at a “top department”. This is a more abstract cultural issue, but I think it’s important that each of us take steps to “deprogram” ourselves from this infectious idea.

That means taking the time to educate ourselves about career paths, research topics and methods, job types, journals, and pedagogy that are outside the area of our own personal experience. I confess that I learned this one the hard way, though years of my personal career journey and choices. Economists who are primarily teachers, who write about less popular topics, who publish in different journals than you or not at all, who work outside academia, who have chosen a different work-life balance, or who have prioritized different things in their life from you are not worse than you. Luckily, this can be as simple as learning about people who are in different positions in the profession and about their experiences and journeys. There are many economists in the world doing work, living their lives, and traveling their careers. We must not only recognize and celebrate those who we perceive as “successful” according to our own personal measures.

In summary: whenever we can, let’s support members of the economics community in situations where they are less powerful. Our active learning, generosity, and intervention can help us to lift each other up, and wouldn’t that be a great thing?

 

Killing EJMR

/ jdc / 2 Comments

For the last couple of weeks, the online economics community has been discussing and reacting to rampant misogyny on a website, Economics Job Market Rumors. A Justin Wolfers post to The Upshot at the New York Times reported on research by Alice Wu that laid bare the ugly, shocking language used to describe women on the website.

I recommend this post by Emily Eisner, Fiona Burlig and Aluma Dembo for a brief overview of recent research on gender inequality and discrimination in economics. Beatrice Cherrier’s post on the topic is rich and thoughtful.

The context of this discussion is that women are unacceptably underrepresented at all levels of the economics profession (source):

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Our profession, our work, and our image suffer from being male-dominated. EJMR is both a disease unto itself, and a symptom of a sick discipline.

Killing EJMR

One: the supply of bullying and bile on this anonymous forum must be stopped. A minimally moderated website dominated by lowest forms of vulgar misogyny cannot continue to be a significant institution in economics. And no, I do not want to hear it that EJMR is “just another” facet of tantrum-and-harassment masculinity on the internet. Don’t even say that. It makes you look like you are grasping for excuses.

Two: the sexist culture of the profession must be changed. Even if EJMR as it is now is mercifully destroyed, the rot is deeper. Smarter people than me have been fighting for women in economics for decades. We all must promote a culture that allows all people to succeed. This means confronting and shutting down “locker room talk” in any setting, including private conversation. It means reflecting on the structure of our institutions, from our classes to our schools to our professional associations, to promote diversity. It means mentoring women at all stages.

In no way am I looking to deflect from, minimize, or excuse these top, difficult priorities. I view this as an urgent crisis.

But three: I think, though, that there is one more thing we could all be more conscious of: what can we do better to reduce the demand for EJMR, or whatever comes next?

The EJMR website has been an open and significant part of the experience of graduate students in economics for many years. It is anonymous and extremely lightly moderated, and it is known for sourness, cruelty, and bullying. As with any online community, there is a core user base who either enjoy participating in the vulgarity or are willing to overlook it. However, the site is also widely used by young economists desperate for scraps of information on the gauntlet of the academic job market.

A narrative is emerging in which there is undeniable value to EJMR that helps to explain its persistence as an institution in the economics profession. It’s a place, this narrative goes, where valuable and mostly accurate information flows that young economists want.

Has a school called to schedule interviews yet? What type of candidate are they looking for? Has a job offer gone out? Who to? Are they going to take it?

What journal should I submit to? Why haven’t I heard about my submission yet? Is my dissertation idea garbage? What kind of research are people laughing at?

The academic job market is an intensely stressful experience. It is hard to surrender agency over where you would like to live and work, to navigate dual career concerns with partners, to fly around the country on a shoestring budget, to have one’s work and worth judged over and again, to compete against hundreds of other talented and deserving people, to fear the derailment of a career before it can even properly begin. It is overwhelming.

I want to reject the narrative that EJMR is an inevitable, valuable salve for the understandable neuroses of the young academic. I think that there are concrete steps that individuals and institutions in the economics profession can take to mitigate the need for something like EJMR, not just clean it up.

Superstars and insecurity

EJMR, like so much else in the profession, caters to the elite. Its tone is dominated by the concerns and perspective of the “top schools” and their students. It belittles “low ranked” students and schools. It devours the perceived weak and shrouds itself in the excuse of “the market”. Like a person who treats waitstaff as subhuman, it is a callous manifestation of the insecurity of the wannabe who feels that they must display their superiority by belittling others.

Of course people want to gossip about the “stars” of the market and to know where the “best” research is coming from. Page Six prints gossip about celebrities, not little people. Let us leave aside for a moment that “best” is located in a Catch-22 of “top school” path dependence. We could agree, maybe, that a little luck and a little path dependence do not undermine the achievements of the top economists. Excellence is rewarded. But that’s all a question for another day.

Here’s a funny thing, though. As Trevon Logan pointed out on Twitter, the imprimatur of Berkeley, Harvard, and the New York Times has helped to elevate this story to the attention of the profession at large.

 

EJMR itself could not distract the attention of the profession’s most powerful until it was graced with the formal attention of the elite. It is by the top schools, for the top schools, of the top schools. The vast majority of graduate students desperate for help and reassurance must go begging for scraps at a table of people who will mock them for their perceived shortcomings. It is vulgar in the extreme.

In this it is not alone. For example: there are many “guides” to the job market out there for graduate students. They include such concerns as how to politely turn down an interview when you simply cannot fit any more into your busy schedule. They are not helpful to a student who is ill with worry that their handful of interviews will not convert to a job, who will give a job talk to three people in a broken conference room rather than a shiny hall of power to a faculty of famous faces. The guides become useless and scary.

Edited to add (8/31/17): In my haste to make a case for reform, I made unfair generalizations about job market guides. In particular I was remiss not to acknowledge that John Cawley’s guide is one that has helped countless students over the years (myself included) and indeed addresses many of the concerns that I have raised in this post. This is an example of the kind of document that would be complemented by the kind of real-time and in-person information that I have suggested in my proposals would undermine EJMR. I apologize to John and to others like him who give up their time to provide information and advice on the job market process.

For example: insane paper turnaround times on submitted research favor the students of top schools. If each rejection takes most of a year—conservatively—and if you do not have elite mentorship and an elite network, mistakes will happen and be exceptionally costly. Here is the order in which you submit to journals, they say. They are survivors. They are there to advise you because they hit those journals. Their work is surely excellent, and they also managed to place it well. If you are a little less lucky, or a little less brilliant, where will their advice lead?

The profession has no mechanisms to help the average student.

Almost no graduate students can usefully call on the direct experience of the faculty around them. Each Ph.D.-granting institution hires fewer new faculty than it graduates. The bucket overflows. Students will do worse than their advisors. It is in this context that EJMR thrives. Students see how it is. They are desperate for help. They find it, poisoned by insecure hatefulness, in an anonymous forum that in a tragic twist of fate exhibits the very same elite bias that drove them to it in the first place.

What can we do?

1. Formalize interview information reporting through Job Openings for Economists

This is the most obvious way that the AEA can undercut EJMR. I appreciate that the incentive for schools to report when they have made calls or offered interviews is not clear cut. Too bad.

A more radical approach here would truly centralize interview offers on a clearinghouse schedule, but I accept that a centralized mechanism like this is not going to happen in economics.

2. Establish formal cross-school, cross-rank mentorship networks

Students need help and support that their own school’s faculty cannot adequately provide. We must have institutions that connect students with the economists that they will become, not the economists that they are shamed for being unlike.

This is probably awkward on both sides. No-one wants to admit that they are not a top dog. That means some bravery, humility, and discretion is required.

3. Formalize practical information on journal policies and characteristics

If we were starting with a blank slate, I would imagine most economists would have plenty of ideas for how to design research dissemination—submitting, refereeing, editing, publishing.

Given that we’re not starting over, we need a living database of relevant characteristics of as many journals as we can corral. Turnaround times, journal policies, fees, readership, citations, even the distribution of authors’ affiliations.

The Committee for the Status of Women in the Economics Profession has an excellent document on navigating the research publication process. This provides a great template for the kind of concerns we need to address. The more concrete we can make the advice, the better.

Treat the disease

There are two traps here. One is that we succeed in reforming or replacing EJMR without having an impact on the sexist and racist culture of economics. There may even be a risk of backlash as that certain type of Internet Man resents being prevented from being hateful.

The other is that we achieve a minor miracle in affecting true, even if slight, change on a profession that is overdue for it, but that we miss an opportunity to implement complementary positive reforms.

We can take this opportunity to support young economists whose mental and physical wellbeing suffers under the pressures of our job market and early career concerns. A tiny fraction of graduating economists can choose their own adventure. The vast majority can hope, at best, to get a decent job in a decent place, to uproot their life and their family and their support network, again: to survive.

Let’s all commit to helping each other.

Rehabilitating the economist

/ jdc / 1 Comment

Following up on my post Methodology, Ideology from a few days ago, I’ve started to dig in to Johanna Bockman’s Markets in the Name of Socialism: The Left-Wing Origins of Neoliberalism. It is a fascinating perspective on the history of economic thought and the sociology of economics. Importantly, it is explicitly concerned with separating the standard methodology of neoclassical economics from right-wing, capitalist ideology.

I have suffered from an unshakeable paranoia about being an economist ever since it looked like I was going to become one. To be an economist is, as I have written about a lot before, to be generally understood as someone concerned with finance, business, and money, a soulless being who sees human beings as automatons programmed to maximize their wealth. I began to feel—I still can’t shake the feeling—that we are forever condemned to this tragic, villainous role.

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Coalition building with the disenfranchised

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I’ve been thinking about all of the groups that will be affected by the U.S. elections this fall. The basic unit of account for these elections is the vote. Yet so many groups of people that care about the outcome can never be counted in that way.

Citizens under the age of 18; permanent and temporary resident aliens; potential visitors and immigrants; felons; citizens of trading partners, allies, enemies; unborn future generations!

It must be very tough to build a voting coalition of the franchised to win an election. What on earth are we supposed to make of the real or hypothetical interests of disenfranchised stakeholders? Surely the answer can’t just be that the disenfranchisement can be taken as irrelevance—tough luck and out of vote, out of mind?

We have come to expect that coalition-building will favor the interests of older, richer citizens, since they vote in greater numbers (notwithstanding the chicken and egg problem we have there). The young and the structurally disenfranchised are already behind the eight ball, then, before we even open the other cans of worms, the inescapably voiceless.

And yet we do see, sometimes and someways, electoral coalitions that consider some interests of disenfranchised stakeholders. I find that amazing. I can’t help but root for a platform that includes concern for the interests of the ultimate powerless, those without even a vote to throw into the wind. It’s an expression of something beautiful and unlikely.

The most basic one, I suppose, is the old “won’t somebody please think of the children”, and sure, it’s a bit parochial and an easy thing to make fun of, but there might be some method to the madness.

Hold up. One of the knottiest questions I remember from my salad days learning about environmental economics is: when you’re thinking about how to make use of natural resources, how much weight should you put on the interests of future generations?

No matter which way you turn there are traps. Maybe you say “the same or more weight as today’s generation”. So you’re committing to either zero use of resources today, because there are infinite future generations who need to use them. Unless you assume unbounded technological innovation that will let you perpetually squeeze more and more out of less and less. Or you assume that at some future point there will be no future generations. OK, so you say “less weight than today’s generation”. You monster! But how much less weight? Where do you draw the line?

Stupid tradeoffs, ruining everything since forever.

And that’s just “think of the children”! It’s supposed to be the easy one to sell! So, I mean, where do you begin to square these circles in any meaningful way? How many stakeholders can you bring into the tent before it bursts at the seams? It’s not just The Children. The stakeholders spill out everywhere in time and space. Forgotten communities, immigrants, refugees, impoverished laborers in other countries…

Any social system is bound to have stakeholders that don’t have a formal voice. On one reading this is just a supersized version of an externality problem, path-dependent branches winding across time and space to vanishing points we can’t even conceive of. Externalities are quite straightforward in theory: if a private decision has social effects, maybe find a way to have the decision-maker experience some reflection of the social effects.

But what hope is there when the repercussions affect so inconceivably many?

I think the least we can do, then, is to cultivate an empathetic, other-regarding conception of the Public to arm us in our political thinking. I don’t think this is just pie-in-the-sky wishcasting; it’s something that we can learn and practice. It’s one of the roles of humanistic education. We cannot accept the primacy of the insidious marketability criterion for higher education priorities. Humanities, histories of thought, and classics are necessities, not luxuries if we have any hope of sustaining societies that can reconcile stability with diversity of culture or belief.

I’m reminded of George Saunders talking with Trump supporters, from his recent article:

Sometimes I’d mention a Central American family I met in Texas, while reporting another story. In that case, the father and son were documented but the mother and daughters weren’t. Would you, I’d ask, split that family up? Send those girls to a country in which they’d never spent a single day? Well, my Trump-supporting friend might answer, it was complicated, wasn’t it? Were they good people? Yes, I’d say. The father, in spare moments between his three jobs, built a four-bedroom house out of cinder blocks he acquired two or three at a time from Home Depot, working sometimes late into the night. The Trump supporter might, at this point, fall silent, and so might I.

In the face of specificity, my interviewees began trying, really trying, to think of what would be fairest and most humane for this real person we had imaginatively conjured up. It wasn’t that we suddenly agreed, but the tone changed. We popped briefly out of zinger mode and began to have some faith in one another, a shared confidence that if we talked long enough, respectfully enough, a solution could be found that might satisfy our respective best notions of who we were.

Well, let’s not get too dreamy about it.

Yes, let’s not pretend to have solved the world, but it’s not nothing. How painful it can be to internalize the voiceless, but how calming and empowering, too.

This is why I feel wounded by nativist and racial politics. It’s not just the awful content. Its method is not to internalize the voiceless but to demonize them. It equates powerlessness with worthlessness. The coalition is no bigger than the number of votes it can muster: what you see is all you get. The tents get smaller and smaller, a snowballing Balkanization of forgetting, fear, and hostility.

I feel the failure of education. I feel the fragility of the whole edifice of social knowledge. It needs constant work, and if it’s not passed down, it’s gone. And so back to work we go, rebuilding our ability to hear each other over and over again.

Principles of Economics

/ jdc / 1 Comment

Here at Brown University, our Econ 101 course is actually numbered EC0110 and is called “Principles of Economics”. Like a lot of introductory undergraduate-level economics courses, it uses Greg Mankiw’s book of the same name. What is a principle of economics? Here’s the list that Mankiw suggests in the book:

1. People Face Tradeoffs
2. The Cost of Something is What You Give Up to Get It
3. Rational People Think at the Margin
4. People Respond to Incentives
5. Trade Can Make Everyone Better Off
6. Markets Are Usually a Good Way to Organize Economic Activity
7. Governments Can Sometimes Improve Market Outcomes
8. A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services
9. Prices Rise When the Government Prints Too Much Money
10. Society Faces a Short-Run Tradeoff Between Inflation and Unemployment

Are these principles? I cannot square any of 5 through 10 with any definition of “principle”; those are, at best, positive economic results (not to be too facetious, but by 10 I think many students must be asleep). A principle, to me, is something that you hold as a fundamental truth, before, during and after you do anything. I see the logic in writing a list that looks like this: it summarizes a lot of the “received wisdom” in our discipline.

That, however, is exactly the problem. How can I teach an anti-capitalist student economics if my first lesson says “Markets Are Usually a Good Way to Organize Economic Activity”? “Good” is a normative judgment; the statement is loaded with value and intent. It’s a huge result built on so many layers of qualifications that I couldn’t possibly say it with a straight face. It’s not possible to sell economics as scientific and flexible if we recite dogma in lesson one. Economics is not capitalism. Maybe that should be a principle.

I should probably make some kind of attempt to define “principles” as I see them.

1. Economics tries to describe and predict things about the world around us.
2. Economics is divided into value-free positive method (what will happen, or how do I achieve a particular goal) and normative opinion (what ought to be done). It can inform debate through the former, but cannot settle it, because there are no right or wrong opinions.
3. Economists assume people act as if they try to get their preferred outcome of the ones that are available, but they don’t restrict what people’s preferences are.
4. Positive economics uses simplified models or empirical observation to describe or predict what will happen, and must never make value judgments. We can try to interpret the validity of positive results by testing them against real-world data or by figuring out what would happen if we made different simplifying assumptions.

I’m just thinking (typing?) out loud, and certainly a more thoughtful attempt would be justified. My “list” is certainly less snappy, that’s for sure. In general, though, I really believe that “principles” should describe the foundations of economics, not its received wisdom. The foundations of economics can accommodate everyone, not just those who would find themselves nodding agreement at a statement like “A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services”. With no exaggeration, I can say this is like opening Music 101 with a list of principles that includes “Only Rock Music Is Good Music” or something equally ridiculous. It is heartbreaking.

Rather delightfully, this list of “Principles of Feminist Economics” – again, I must confess, I don’t often see how “[blank] economics” is distinct from “economics”, especially since the [blank] is usually a value judgment – is, despite dripping with normative statement, actually more palatable to me than Mankiw’s list. At a bare minimum, looking at them side by side reveals how neither of them can possibly be considered “principles of economics”. I’m sure mine can’t either, but you get the point: I think a minimum requirement for a list of principles is that they be basic and as agreeable as possible to the people who care.

I applaud the goals of this page entitled “Great Ideas For Teaching Economics”, even if a few of them are really more “how to get people interested”. Allow me to quote at length this contribution from Hugh Himan:

“For a number of years I have devoted 6-9 class meetings in the Principles of Economics course to class debates on current economic issues.

Objectives:

1) to acquaint students with the reality that economists as well as people in general do not think alike on economic issues;

2) to have students realize that disagreements on issues reflect both different positive economic views (cause and effect) as well as normative difference (values)

3) to challenge their own thinking about economic issues

4) to have each student experience through a debate on the beliefs and values of the three major paradigms of Conservative, Liberal and Radical.

The debates are evaluated by the students and instructor on the basis of specific criteria with final scores tabulated on a 100 point scale. The evaluations are based upon how well the team presented their assigned position, not whether the evaluator agrees or disagrees with that particular paradigm.

It has been my experience that the students truly get involved with these debates, well beyond the proportion of the final grade their scores represent. Most enjoy the role playing, some even dressing as they think a Conservative, Liberal or Radical would appear.

Beyond the enjoyment many experience, I like to think that they have gained deep insight into issues i.e., that problems can be viewed differently based upon one’s belief as to “truth” causes and effects as well as on the basis of values (no good vs. bad but in terms of relative priorities). For so many students I have taught over the years who tend to think there are single, simple answers to such problems as poverty, unemployment, national defense, acid rain, exposure to the complexity of such issues is important to their education.”

This is, indeed, a great idea. Is there a better way of understanding the very concept of normative judgment than to force students to debate from all sides? I think it might be fun to ask students to shout out anything they can think of, and to write down an “economic model” that proves it. This really invites students to think of 1) how flexible positive economics is, 2) the importance of assumptions, 3) how to judge an economic theory, and 4) the role of normative opinion.

We need all three levels of understanding in economics: positive, value-free, empty economic science; interpreting whether the positive results are correct, either empirically or by exploring the implications of alternative assumptions; normative, value-laden opinion. Exercises that can explore these distinctions are the most valuable in our teaching arsenal. A list of “principles” pregnant with loaded statements is not the right way to present our discipline.

Unreal

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As someone who laments misperceptions of what economists are and do, the barriers to communication with anti-capitalist groups make me very sad indeed. How did I get there? I was looking for something entirely different when I stopped to read an article by Roy Weintraub talking about neoclassical economics. To someone with my beliefs in what economics is, it’s a bit schizophrenic. This is nice:

“Neoclassical economics is what is called a metatheory. That is, it is a set of implicit rules or understandings for constructing satisfactory economic theories. It is a scientific research program that generates economic theories.”

This is pretty good news: the beast called “neoclassical economics” is merely a box inside which we concoct scientific theories: inside our box, this would lead to that. Weintraub continues to say that the assumptions of neoclassical economics

“include the following:

1. People have rational preferences among outcomes. 2. Individuals maximize utility and firms maximize profits. 3. People act independently on the basis of full and relevant information.”

Of these, 1 is redundant to me because I think rationality is not testable and is therefore irrelevant, especially since it’s probably implied by 2, and 3 is at best outdated (economists these days are very interested in the implications of imperfect or asymmetric information). If I was pressed to define neoclassical economics, I think perhaps the definition I would use is similar to 2. I’d say that neoclassical economics is the branch of economics that models entities (individuals, firms, governments, etc) as if they try to get the outcome they like best from the ones that are available.

I disagree more with the stance of the article when Weibtraub repeatedly invokes “the neoclassical vision”. The connotations of this phrase probably reinforce the misconception that economists think the box in which neoclassical economics works obeys the same rules as the real world. I doubt a physicist thinks that a vacuum is the same as the real world, just as I doubt that any economist thinks that the abstractions of economic modeling are the same as the real world.

It’s true that a positive economist who seeks to explore “what is” should not neglect to examine the differences between abstraction and reality, but again we must ask at what point the value of realism is eroded by its inability to draw any conclusions. I think the real choice we’re faced with is the application of the economic method that says “if this unrealistic simplification, then that” versus a shrug of the shoulders; if it were possible to achieve the ideal “if this, then that”, who would reject it? Should we stop trying because we can’t be perfect?

Perhaps partly because of such confusions, “neoclassical economics”, aside from having a silly name, seems to have become something of a lightning rod for the anti-capitalist set as much as it is for economists with different ideas. Google neoclassical economics and you get – on page one – a page from adbusters (an anti-consumerist publication – Wikipedia entry), and a less histrionic “critique of neoclassical economics” by Herb Thompson.

“Neoclassical economists normally treat economic instability as the effect of exogenous, stochastic factors even though nonlinear economics suggests that what may previously have been considered exogenous, or random, may more likely be endogenous to capitalist social formations.”

I confess I’m not sure what “nonlinear economics” means (the almighty Google was inconclusive): clearly I, too, have been indoctrinated to the neoclassical cabal. However, I actually think that the quotation touches on an interesting idea. Can we figure out if the primacy of money as a measurement of outcomes “caused” the rise of the capitalist method of organizing resources, or if the capitalist method “caused” the rise of the primacy of money?

A difficult one. For example, to take a typical example of an anti-capitalist complaint, do people buy sweatshop goods because they don’t know they’re sweatshop goods or because they care more about cheap goods than where they came from? I think the latter is more consistent with “money primacy leads to capitalism” and the former is more consistent with “capitalism leads to money primacy”, although I’m sure that could be debated.

It is possible to imagine that incorrect normatization of positive economics – by which I mean the mistaken assumption that some measurable positive economic variable is a measure of the quality of an outcome – actually causes problems within the economic system. People will do what they will, but if a policymaker chooses a policy based on the primacy of money as a measure of the quality of an outcome, there’s a real possibility that the system itself is influenced by its measurement.

The Thompson article also includes the following excellent paragraph:

“The ‘rational’ consumer of the mainstream economist is a working assumption that was meant to free economists from dependence on psychology…. The dilemma is that the assumption of rationality as intertemporally optimising is often confused with, and regularly presented as, real, purposive behaviour. In fact, the living consumer in historical time routinely makes decisions in undefined contexts. They muddle through, they adapt, they copy, they try what worked in the past, they gamble, they take uncalculated risks, they engage in costly altruistic activities, and regularly make unpredictable, even unexplainable, decisions.”

First of all, this is crucially wrong: “rationality” is not something that can ever be more than an assumption, unless you think you can test it. Further, assuming rationality does not exclude any of the motivations Thompson talks about. It would be trivial to write down a model of a rational person who “engaged in costly altruistic activities” – I simply have the person care about others and optimize rationally. The assumption that Thompson is really discussing here is the straw man of “rationality equals maximizes money”, which I have previously argued is absolutely not an assumption of any economic theory, neoclassical or otherwise.

Beyond that, this is really back to the same problem that the Weibtraub article was getting at: we’re doing the “if this unrealistic simplification, then that”. There’s a strong push in so-called “behavioral economics” to figure out if there’s a workable way to first make realistic generalizations on how people behave and second to incorporate them into the unrealistic simplification of neoclassical economics. While that goes on, the economist who seeks to defend his method must be clear on what his unrealistic simplification actually is and what it is used for.

As usual, no-one is fit to judge if the anti-capitalist model is “better” than the capitalist status quo, but I greatly hope that we would be able to talk about what each would mean. If somehow I were able to convince adbusters to sit down with me and I asked them what they wanted to do and what they wanted to achieve, what might they reply? I don’t know what they would say, but whatever their answer, I would like to figure out what it would take to achieve their goals, what the consequences of their chosen actions would be, what it would mean for people, not just them or me. I hope they would like to figure that out too. That’s positive economics.