Who's the Real Economist?

Who's the Real Economist?

E-mail debates of newsworthy topics.
Nov. 6 1996 3:30 AM

Who's the Real Economist?


Jacques Derrida
Ain't no wrida
Then again, ain't no reada

       I learned those lines a few weeks ago, directly from Steven Weinberg, the eminent physicist, whose caustic views on lit crit and science I happen to share. Imagine my surprise, then, to find Paul Krugman calling me, in these pages, a deconstructionist, an "anti-academic" with a "desire to make economics less like a science and more like literary criticism."
       Krugman takes a suggestion I do make (it's actually about professional specialization inside economics departments; the details are not important here), and summarizes it: "Economics, in short, would be a better field if the MIT economics department were more like the Yale English department in its deconstructionist heyday."
       The line is funny, but in fact I have no beef with MIT, precisely because life there is already more interesting than in most departments. Just one page later, in the same essay, I address the situation at MIT specifically. Here's what I say:

MIT, at the pinnacle of professional prominence, has an ideological flavor ... and also a stronger team orientation than most places. The problem is not conditions at the pinnacle but the inferior results when lesser places try to replicate the coverage without the people. And when good people in niches cannot find steady employment because second- and third-rate departments lack the courage to hire them.

       Evidently Krugman ain't no reada, eida.
       Krugman's main point is that he represents the "nerds" of economics, whereas I and the distinguished writer Robert Kuttner are "literati," who would like the profession to be less mathematical than it is. Leaving Kuttner to speak for himself, this view also totally misrepresents not only my position but also Paul Krugman's own professional one.
       This may come as a surprise to outsiders, but Krugman is not a mathematical theorist (and I have heard him admit this, to a knowing audience). Krugman's mathematics are not deep, and he has no interest in complicated manipulations of data. He owes his fame, instead, to an exceptional grace and lucidity of formal presentation. With these gifts, Paul has expanded the range of neoclassical economics in several notable directions, especially international trade theory. Krugman's professional work is mathematically literate, of course. The point is that it is also literate, and, for many economists, that is its appeal.
       My own work is mathematical when it needs to be. In recent years it has become very much so, in papers that are just beginning to appear (one came out this year) and working documents that I or co-authors have presented recently at Harvard, Berkeley, and to the physics department (of all places) at Texas. I have nothing against math, and when my topic (inequality, in this case) is mathematical, then so am I.
       So if the issues between Krugman and myself are neither hermeneutic nor mathematic, what are they? The actual issues are philosophical and theoretical.
       Paul's worldview rests on the belief that useful implications for important questions of public policy can be derived, essentially from first principles, with the help of a well-structured logic. Well-structured deduction from metaphysical first principles is the Krugman forte.
       I don't accept that much of use can be learned about policy in this way. When the world deviates from the principles, as it usually does, the simple lessons go astray. This is not a complaint against math. It is a complaint against indiscriminate application of the deductive method, sometimes called the Ricardian vice, to problems of human action. Mine is an old gripe against much of what professional economists do; not against science but against scientism, against the pretense of science. To combat it, I spend my research time wrestling with real-world data, and I spend much of my writing time warring against the policy ideas of aggressive, ahistorical deductivists.
       Within economic theory, our differences can be stated even more simply, for those who know the jargon. Paul is a moderately liberal neoclassical economist, formed at MIT. I am an unreconstructed and very thoroughgoing Cambridge Keynesian. Paul's main mentors are, I would judge, Paul Samuelson and Robert Solow. Mine were probably Nicholas Kaldor and Joan Robinson, not to mention the influence of my own father. This accounts for many differences between Krugman and myself, on issues ranging from the role of the market to the role of the state, differences that are rooted in deep disagreements over economic ideas.
       In the final analysis, Krugman's argument is that there is a simple distinction between the "serious" economists--who agree with him--and the "critics," who are, by definition, not serious. It is true, of course, that economic-policy discussions are magnets for cranks. But from this it does not follow, and is not in fact true, that all "serious" economists hold to some single position. It is even more absurd to suppose that one gains access to this wisdom by passing an exam in algebra. In this respect, Krugman's argument is so shallow, so actually illogical (a fallacy of induction, in this case), that it is evidently aimed at rubes. I hope not many will be taken in.
       (Many of my articles, including the original target of Krugman's critique, " What Is to Be Done [About Economics?]" are accessible online. Also available, a paper entitled: "Linear Decomposition of Time-Series" [for anyone interested in checking out my linear algebra ...].)

James K. Galbraith, a professor of government at the University of Texas, takes issue with Paul Krugman's recent SLATEcolumn, "Economic Culture Wars." Krugman is a professor of economics at MIT.