Arnold Kling  

Alan Blinder is not Boring

Alan Blinder is Not Stupid... The Misconception of the Twent...

In another paper, on the relationship between economics and policy, he writes,

In the academic world, where we routinely prepare papers that perhaps two dozen other people will ever read, the standards of evidence are quite strict. Proofs must be exact. Econometric techniques must be up to snuff. Scholarly papers routinely get rejected by journals for picayune errors. And what is at stake in the answer? Nothing but scientific integrity. But in the world of policy, where so much is at stake, the hurdle of evidence is set pathetically low.

His main conclusion:

good economic policy is best achieved through a series of carefully arranged marriages between cerebral economists and worldly politicos

This leaves popular opinion as something to be manipulated. The economist knows what is "right," and the politician knows how to work around public opinion.

I may be idealistic, but I think it would be better for the economist to communicate with the public than to try to use relationships with politicians to make an end run around the public. My thinking is that if the public were more receptive to good economics, then good economic policy would not be so difficult to enact. But that belief of mine may be a candidate for what Tyler Cowen calls an absurd claim.

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CATEGORIES: Political Economy

COMMENTS (11 to date)
Silas Barta writes:

Econometric papers rigorously establish their theses with solid, indisputable evidence? Two words: no. Everyone knows exactly how inexact econometrics is.

T.R. Elliott writes:

I think Kling has a major problem in his concept of "good economics." The economists cannot agree on a whole host of issues. I think Moisés Naím describes the issue well:

And they are right. Economists today are still grappling with basic questions for which they have no answers. Much more than fodder for academic squabbles, this uncertainty often has serious consequences. When economists err in theory, people suffer in practice. Fernando Henrique Cardoso, Brazil’s former president, recalls that in the midst of his country’s financial crisis, he received calls from experts at the International Monetary Fund, several Nobel laureates in economics, and other superstars in the economics firmament. Each offered different advice, and each sounded convinced that his or her recommendation was the only correct one. A distinguished sociologist, Cardoso managed to employ his considerable talents and experience to steer Brazil out of the crisis, ignoring the recommendations of several celebrity economists—some of whom had even urged him to adopt a fixed exchange-rate regime just like the one that Argentina’s recent crash has now discredited.

Economics speaks with many tongues. Hence the only means to put in practice much of economics is through the political realm. Because economics at the policy level is political. And ideological.

jn writes:

I think that even when economists are "right" in a narrow technical sense, they overlook important aspects of the problem the ordinary policy makers can sense. Politicos' defense of some positions may be hypocritical, illogical, self-serving, and even flat-out wrong, but they often represent important positions that could be rationalized if thought through but are not. [The same for the so-called great unwashed and their unsophisticated but often profoundly well-grounded preferences.]

This is a Hayekian point. Ideamakers overvalue policies whose rationales can and have been articulated in ways amenable to scholarly reasoning and devalue the tried, true and boring especially where such ideas have not yet been fully rationalized despite (because of?) their persistent survival as cornerstone views and prejudices of many civilized peoples.

So this is disturbing and difficult for academics (counting myself among the sinners) because an old but badly articulated idea is often difficult to gauge properly against a clever, ideologically tempting, but untested innovation.

Mike White writes:

Perhaps a new Plato would say "There will be no end to the troubles of states, or of humanity itself, till [economists] become kings in this world, or till those we now call kings and rulers really and truly become [economists], and political power and [economics] thus come into the same hands." Given that the earliest ecnomists can be traced back to the teachings of Aristotle, this is not much of a stretch.

paul writes:

Economics has progressed from the dismal science to the sterile science. The harsh reality is that there is no real world application for economists (except for entertainment value to people like us). They exist only because our institutions of “higher learning” have been subsidized by the state and we have way too much supply of “higher learning.”

eric writes:

Economists know what is right? For what issues is there a solid consensus? I used to think free trade, but as Krugman has demonstrated, that idea is often sacrificed for some grander goal (in Krugman's case, bashing Bush).

NR writes:

I think Kling is right. A big part of the problem is rampant public misconceptions, inflamed, typically, by the mainstream media. True, you can find an economist to take any position, but the great majority agree, for example, that free trade is good, that market prices serve an important function in allocating resources (hence that price controls--say on oil and gas--are bad), and that minimum wages increase unemployment (the mainstream media, of course, promote the views of the tiny minority of economist who say the opposite). One could probably find a few more important principles on which most economists agree but that contradict--to ill effect--majority public opinion. Better economic education, which in a better world the media could help with, would be productive. Guess what? A recent survey showed that more PRC Chinese than Americans believe that market economies are the best form of economic organization.

N. writes:

NR - I need that survey; the source for it I mean. Is it available somewhere on-line?

cb writes:

What was that story I read recently about 279 or so economists writing a public letter that Thatcher's policies were wrong, circa 1979-80? I believe there were 2 on her side.

I'd love to see economists take their positions more directly to the public. The public might learn a bit. But I daresay many of the economists might learn a lot as well. Not least that many people are skeptical of academics, and for some good reasons.

N. writes:

Well, in case anyone was wondering, I stumbled across the poll (or a poll with similar results).

From today's WSJ:

"According to a recent poll, France is the only country among 20 surveyed where those who don't have faith in the free market outnumber those who do. Only 36% of those polled in France agreed with the proposition that the free market is the "best system on which to base the future of the world" -- compared with 71% in the U.S., 66% in Britain and 65% in Germany. In nominally communist China, 74% said they favored the free market, according to the University of Maryland's Program on International Policy Attitudes."

If only Mao were alive to see it. He'd probably move to France.

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