Is There An “Economic Event” That Will Change the Economics Profession?

BY busadmin  January 22, 2009 at 10:59 AM EST

Money; file photo

Question/Comment: Dear Mr. Solman, Is there an “economic event”, or re-discovery of economic history that can impact the incredible ideological stranglehold on the economics “profession?” In my opinion we have sacrificed rigorous econometrics on the altar of existence theorems, Diophantine analysis and just plain epistemological bankruptcy. A lot of people are hurting while this silliness is being funded in the name of economic research. Is there any change coming?

Paul Solman: Cool. An email in which “epistemological” isn’t the hardest word. How many economics web-scribes get one of those, do you figure? Wait just a moment while I Google “Diophantine.”

Oh right, how dumb of me: “a Diophantine equation is an indeterminate polynomial equation that allows the variables to be integers only.” Named after Diophantes of Alexandria. I think I met him once in the library.

But on to the core question.

First, I don’t know that we’ve “sacrificed rigorous econometrics” to economic math, if that’s what you mean. Hmm, come to think of it, maybe I better Google “existence theorems.”

Omigod. As Roberto Duran said when he was been pummeled by Sugar Ray Leonard: “No mas.” Look, I’m going to ASSUME you mean that abstruse math is strangling economics.

If I could understand your email, I’d be in a better position to agree but yes, my sense is that math and math proficiency have diverted the discipline – narrowed its focus. I was gratified when I read Adam Smith, in Wealth of Nations, saying that he had “no great faith in political arithmetic.” And he was only talking about statistics (and their accuracy or lack thereof).

Two further points. I think MODERN “political arithmetic” – i.e., statistics – is extremely important and relevant to people, hurting or otherwise. The alternative is ANECDATA, on which we humans all too often rely.

Second, I DO think the profession is changing its priorities somewhat. Look at the last several recipients of the John Bates Clark Medal, given only once every other year to “that American economist under the age of forty who is adjudged to have made a significant contribution to economic thought and knowledge.”

They include Freakonomist Steven Levitt, who uses statistics, but can hardly be called a math freak.