by Mario Rizzo
Once upon a time, in a land far away from New York civilization, a famous economist told a good friend of mine that “we” need more scientists and fewer scholars in the economics profession. He was serious.
This is the time of year that many Ph.D. dissertations are being defended in graduate departments of economcs. We have many would-be scientists and almost no scholars. I think we need more scholars and fewer scientists.
What is the difference?
I prefer to say what a scholar is rather than get into the issue of how precisely to define “science” (or even the abuse of scientific methods — often called “scientism.”)
The scholar knows well the history of the discipline. He is also familiar with the major issues of the philosophy of science as applied to his discipline. More specifically, with respect to economics, he knows the difference between interesting economics questions and perhaps-interesting mathematical questions. He also knows how to interpret theories, that is, how to get to their (potential or actual) relevance to the real world after penetrating the mathematics and the general formalisms that frame their presentation.
So, in the past few weeks, I have been seeing abstracts of NYU doctoral dissertations. Very few, if any, scholars here; a lot of would-be scientists. I ask myself, “What is the point of all this stuff?”
One might think that with so few scholars their marginal utility would be quite high. Not so, in the perception of the job market — a job market where few schools dare to excercise independent or contrarian judgment. Part of the reason is that many academics are quite desperate for approval by the “top brass.” Another part is that they must justify their hiring decisions to deans who know nothing about fields and who want to say to the the higher-ups, “We are hiring what, by consensus at the top schools, are the best.” It is not hard to see what a closed system this is.
But, at least, these would-be scientists are producing a public good — basic research which, though it may not have immediate applications to understanding or solving real-world problems, will generate great insight that may lead to all sorts of good things. Or even insight that is good in itself.
My God, another closed system! What would falsify the public-good claim? Some might say that if the profession values the work it has value. But I ask: to whom? Shouldn’t the profession have to show a value to someone or for some purpose; not simply that they like it? Or else how can we distinguish a true public good from a consumption good or amusement for a small number of economists?
If I were trying to rationalize the public-goods quality of what goes for economic theory or even applied economics at most top schools (Chicago excepted), I would be at a loss.
‘Tis a pity. Economics used to be, can be, and sometimes is about really interesting and important things. Can it be so again? We need more scholars.
ThinkMarkets 
Or perhaps “more scholarship, more science, and more making sure neither is done in the absence of the other” 🙂
This is a key distinction. Interestingly, the great scholars in economics – Buchanan, Hayek, Friedman, Knight are a few that come immediately to my mind – were also great social scientists but without the pretension of being physicist clones.
Another of those great scholars of the 20th century was the German liberal economist, Wilhelm Roepke.
He bemoaned the same tendency in economics that Mario (despairing)draws our attention. The following quote is from Roepke’s 1951 lectures delivered in Cairo, Egypt, and published under the title, “The Problem of Economic Order”:
“In Economics as almost everywhere else, with all our cleverness, we have become decidedly less wise, while knowing more and more about less and less. We have lost the sense of proportion–so indispensable for every economist — while analyzing the curiosities of hypothetical economic situations and forgetting what has a bearing on real economic life.
“In spinning out the fine threads of the New Economics [Keynesianism], we forget the most elementary principles of economics, and while stressing what might happen at best in highly exceptional circumstances we overlook are the most perennial truths. While proudly parading our elaborate equations we unlearnt that simple common sense which consists in reckoning with human reactions and institutions as they really are. While studying the trees we have been all too prone to overlook the forest . . .
“Whereas formerly a good economist was a man who knew how to assess the relation of the actual economic forces and whereas formerly judgment, experience, and a sense of proportion were rated higher than the formal skill in handling certain research techniques introduced illegitimately from the natural sciences into economics–today glory goes to him who knows how to express more or less hypothetical statements in mathematical symbols and curves.”
Alas, that older generation of economic “scholars” has all but died out. Edward Shils, in his book, “Tradition,” pointed out that for traditions to be likely to survive there needs to be three overlapping generations (child, parent, and grandparent), so “wisdoms” learned may successfully be passed on from generation-to-generation.
There are virtually no overlapping generations of economics “scholars” in the profession to pass on that earlier tradition of intellectual scholarship and alternative notions of “science.”
There are only a handful of cloistered “remnants” here and there — an “endangered species.”
They have one in “captivity” at New York University. I understand that he can be “observed” during normal office hours.
Richard Ebeling
@ DK,
I think this is the first time we’ve been in 100% agreement.
From “The Language of Economics” in John Kenneth Galbraith’s Economics Peace and Laughter (p. 43):
The oldest problem in economic education is how to exclude the incompetent. A certain glib mastery of verbiage—the ability to speak portentously and sententiously about the relation of money supply to the price level—is easy for the unlearned and may even be aided by a mildly enfeebled intellect. The requirement that there be ability to master difficult models, including ones for which mathematical competence is required, is a highly useful screening device.
I just completed a week with scholars.
I was a visiting scholar with the Mercatus Center, which meant that I interacted with the faculty and students in the Austrian economics program at GMU. Scholarship is alive and well among the faculty and students there.
Two observations. My seminar presentation was at the Politics, Philososphy and Economics Workshop. It was an intense and beneficial intellectual experience.
My final duty on Friday was to lead a 3-hour discussion for graduate students in the money and prices reading group. It is a self-selected group of students willing to read 120 pages and then comment on the readings in a Liberty Fund-style.
The readings group was held in Buchanan House on campus. Unexpectedly, James Buchanan showed up. He came in and conversed with us on money and the constitutional framework. That made my week.
Some of us also travelled into DC to Cato’s release of the 50th anniversary edition of Hayek’s Constitution of Liberty. Amazingly, George Soros participated along with Ronald Hamoway, Bruce Caldwell and Richard Epstein.
Quite a week. And all scholarship, no scientism.
I abandoned science for scholarship precisely because I kept running into the problems of what I wanted to ask, one could not come up with very interesting answers. It has to do with the necessary narrowness that comes with scientific questions — and the kinds of answers possible. It is almost necessarily reductionist in nature, even when dealing with complexity. And since my interests have increasingly been directed at complexity, scholarship became increasingly of interest. The result was that I abandoned a Master’s in biology and ended up with a Ph.D. in the humanities with a dissertation titled “Evolutionary Aesthetics,” in which I make extensive use of biological and evolutionary psychological theory to explain the arts, particularly literature. Now I am increasingly interested in the connection between economics and literature, and the scholarly work of the Austrians is naturally easier to use in that manner.
What excellent comments — all of you!
Jerry–
It is great to hear of your week of intense scholarship on a topic obviously of top current relevance, directly bearing on the economic questions of the day.
Mario,
I think the overall profession has too much “science” and not enough “scholarship.” Right on. Austrians have devoted more effort to “scholarship” than to “science,” which makes them hard for “scientists” to understand. If we are interested in persuading others and influencing the profession, therefore, we should allocate more effort to “science” and less to “scholarship.” We should seek out the “scientific” grounds for the superiority of our perspective over that of more mainstream views.
“We” should do whatever our comparative strengths “dictate.” I am a big believer in changing the subject. This is what has happened in many a paradigm shift.
Dr. O’Driscoll,
Do you think there will be some Austrian Macroeconomists coming out of the group you you met?
My biggest complaint with GMU has been turning all of these young Austrians toward doing economics on what I (just me) think are smaller issues and when the big macro events hits we do not have a younger generation having worked on the big issues (as I see them.)
When this crisis hit, the debate, as Prof. Rizzo titled a piece here, was really Hayek vs. Keynes all over again.
Nothing from the recent generation of GMU Phd.s
I hope under your and Prof. White’s leadership these young scholars try to advance Austrian macro.
Thanks
Adam Smith said that you acquire a comparative advantage in your specialism, not the other way around.
Roger, please explain.
As a school of thought, our comparative advantage is endogenous, not exogenous. If we cultivate a more “scientific” attitude, then we will be good at “science.” IMHO our guys are smart and able and we have the better arguments. But we haven’t done that good a job at “science.” We have not, for example, worked up an empirical research program in macroeconomics. If we put a higher priority on that sort of thing, I think we might find our views getting more traction with the mainstream. Indeed, a blogger I admire has said, in the context of macro, “We need good empirical researchers. I am, quite frankly, not interested in reviewing all of the qualms about certain kinds of econometric work. No single econometric result is definitive but little by little a case for taking a theory seriously can be built.” Right. We need to do more “science.”
I believe Larry White currently has 5 Ph.D students working under him. I expect a regular supply of money/macro dissertations out of GMU.
Thank you. I look forward to the careful scholarship under Prof. White’s guidance.
I will provide regular demand for the output.
I think Mario is right that one cannot create a paradigm shift by embracing the methods of the old paradigm. At the same time, Roger is right — if by science we mean that Austrian economists are embracing the current paradigm shift in science away from reductionism and toward complexity and emergence. I learned about complexity first, and found Austrian economics sensible because it was the only one that looked at economics in its full complexity. It was the only tradition in which complexity science seemed to completely fit — even though its scientific methods were not being used. The science has caught up. You just have to use the right, not the wrong, science. The rest of economics is terribly behind the times in its science. The Austrians are not, but only if they embrace the science that supports them.
I also look forward to these money-macro papers.
Roger,
You cannot go from: “As a school of thought, our comparative advantage is endogenous, not exogenous” to statements about what individuals “should” do. Many people are attracted to Austrian economics precisely because they perceive it quite correctly as an antipode to the “science” of standard economics. These are the people whose “social function” is to say the Emperor has no clothes.
In any event, people will do what they are comfortable with. That what I have done and I have absolutely no regrets. I will encourage people who do what I think is interesting and important. I do not think that having more “scientists” in the profession is interesting or important.
I just find your continual statements about what Austrians *should* do pointless. Cultivate your own garden. No one will devote his or her professional life to doing what he or she should do. If the person knows how to live a satisfying life, he will do what he wants to do. I recommend it highly.
As Hoffmann said.
Maybe the problem isn’t science vs. scholarship but merely too many PhDs?
http://www.nature.com/news/2011/110420/full/472276a.html
I don’t know about economics’ departments, but in my area (generally molecular biology) PhD candidates often do not select their dissertation topic. They enter a lab and their mentor (professor) suggests (or tells them) what to work on. From that point forward it’s like a hamster on a wheel – run as many experiments as possible, collect the data, make your figures, publish a paper or two, and get out. I can’t say I never felt subject to that perverse goal myself when I went through (’05-’10).
I think all PhD candidates should at least be able to articulate what the most important, outstanding questions are in their area of science, and how their work will incrementally move us closer to a solution or provide an important insight. And not, how will this work improve the chances of your mentor getting another grant.
I think Joesph Pott’s quote from J.K.Galbraith is important.
One of the strengths of mathematical sciences is that they are quite good testers of intelligence. The intelligence of someone with a physics or maths degree from a respectable University can be relied upon. Work that concentrates on prose and reasoning isn’t necessarily the same. It depends on far more capabilities. As such people who are less than perfectly intelligent can succeed at it. To those who see intelligence as being most important for later tasks this is a failure.
I think part of the problem is that Universities perceive that they have to give some guarantee of intelligence to those who employ their graduates. They see it as unlikely that the graduate will use the knowledge gained at university. So, they’re driven to slant courses towards mathematical work. That may be the correct choice for training economist who are going to become Wall Street analysts. But it’s not the correct choice for training economists to be economists.