Bryan Caplan  

Economic Literacy Via Philosophy?

Take a Guess... Romney and Kling on Massachuse...

Arnold writes:

I had lunch today with a friend whose daughter is planning to major in philosophy, with minors in religious studies and classics. My reaction was to say (to my friend's horror), "Sounds like she could be on the path to becoming a right-winger."

My reasoning is that those are areas of study where one learns critical thinking. Critical thinking is necessary, although not sufficient, for being able to understand the role of freedom and markets.

Also, that combination of major and minors show a willingness to grapple with ideas with little need to follow the crowd. That, too, is a necessary condition for becoming a libertarian, given that the crowd is caught up in national socialism.

I have more hope for someone who majors in philosophy than for someone who takes freshman economics.

Presumably Arnold's hypothetical philosophy major doesn't take freshman economics, or this wouldn't be a very interesting claim!

Question for Arnold: If you're right, why are there so few libertarian academic philosophers? And why do economists across the political spectrum have so much more appreciation for the benefits of markets than the general public, the typical college grad, or the typical philosopher for that matter?

Speaking as an undergraduate econ major/philosophy minor, I'd say that studying philosophy typically leads not to "willingness to grapple with ideas," but to blanket skepticism. Feel free to consider me the exception that proves the rule.

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COMMENTS (16 to date)
Silas Barta writes:

Here's my easy answer why there are so few libertarian academic philosophers: Libertarians are smarter. Smarter people make more. People who make more suffer higher opportunity costs to withdraw to life in the ivory tower.

I'm of the opinion that it's doubtful that any major is good for making a kid into a libertarian. We're talking about an entrenched, socialistic, "social-democratic" establishment whose bias goes into pretty much all majors in most public schools and a lot of private schools too.

What does the major matter?

If libertarian leanings come from anywhere, it's not from the typical American university. GMU's econ department is one of the few delightfully notable exceptions.

Bill writes:

In my own case, I came to libertarianism after flirting with most other political ideologies and finding all of them lacking. If one spends enough time studying politics and politicians, and doing so in a broad and open manner, skepticism of government is likely to be the result. Being skeptical of government is a prerequisite of libertarianism.

T.R. Elliott writes:

I still say people here should be studying physics and mathematics such as I did in order to have a better understanding of what economics is really about. Then you too could write such great stuff as Joseph McCauley does in "Dynamics of Markets: Econophysics and Finance"

there is as yet no evidence from the analysis of real, unmassaged market data to support the notion of Adam Smith's stabilizing Invisible Hand. There is no emperical evidence for stable equilibrium, for a stabilizing hand to provide self-regulation of unregulated markets
In economics, there exist no known inviolable mathematical laws of motion/behavior...we do not know any universal laws of markest that could be used to explain even qualitatively correctly the phenomena of economic growth, bubbles, recessions, depressions...
extreme events are ruled out from the start by assuming equilibrium in neo-classical economic theory, and also in the standard theory of financial markets and option prices based on expectations of small fluctuations
so far, the Black-Scholes option pricing model is the only falsifiable and partly successful model within the economic sciences

In this context, I find it so amusing when Caplan gives us the "one of the most frustrating thing about non-economists is their reluctance to..."

That may be true. But what is the most frustrating about economists is that they have no clue how unfounded are the grounds of their pseudo-science, and those that do know refuse to teach it. Because let's face it, the focus is convincing minds to swallow an ideology, not to teach critical thinking and science.

So I say, study physics folks. Plus mathematics. A little operations research. Some systems theory. You'll be way ahead of economists and philosophers. And you won't be right or left. You'll be correct.

Zubon writes:

From my own time in academic philosophy, there is probably some sense in which "willingness to grapple with ideas" is true, but not the relevant one "for being able to understand the role of freedom and markets." Or at least not to appreciate them. That is not the sort of thing most philosophers spend their time thinking about.

The dissertation topics that spring to mind are whether the ecosphere is the sort of thing you can care for or only about and type-type trope nihilism (I hope I am remembering that correctly). The questions considered to be "of interest" were distantly connected to human life at best. More of interest were the fine details of classification and definition within certain philosophical traditions, landscaping around castles in the sky if you will.

I presume that not all philosophy departments have delved into the weeds (why stop at straying?), but academic philosophy quite often promotes a willingness to grapple with tangential or trivial ideas at great length. I was more fond of the professors working on historical philosophers, as these professors seemed to have a better perspective on their bodies of work.

Anon writes:

I think T.R. is partly right, even if he (possibly) overstates it somewhat. Mainstream websites are even discussing the pseudoscience nature of much of economics. See

[Anon: Please email us at to retain your posting privileges. A functioning email address is required to post comments on EconLog.--Econlib Editor]

Silas Barta writes:

Oh great, another comment from T. R. Elliot.

T. R. Elliot, how can you possibly say there's "no evidence" for an "invisible hand"? Have you ever been to a supermarket recently? Do you have any idea the amount of coordination going on? If McCauley is just saying there's no equilibrium, uh, yeah, we already knew that. Markets are dynamic like that. If he wants to say that in this or that particular aspect, markets come to a suboptimal outcome, and has evidence from unregulated markets to demonstrate this, that would be an excellent thesis to submit to a journal.

As for Black-Scholes, what about the efficient markets hypothesis and its use in index funds? Does that not count as well? And has the author never heard of the Austrian School?

*awaiting cryptic response from T. R. Elliot*

Niels Jackson writes:

One problem with philosophers is that, after training in argumentation, they think that they are better able than anyone else to perceive the right "answers" to public policy problems, even far outside any conceivable realm of expertise.

A chief example is Brian Leiter (who, ironically, never misses a chance to sneer at someone else's qualifications to pronounce on a particular subject). In this post, Leiter lists the following "easy questions" about which "there is no serious--or at least no honest or intelligent--dispute about the epistemic merits of the possible answers":

Was the U.S. justified in invading Iraq?

Are Bush's economic policies in the interests of most people?

Is Darwin's theory of evolution by natural selection a well-confirmed scientific theory?

Is there a social security "crisis"?

Note that Leiter has no expertise in foreign policy, economics, biology, or public policy. His expertise is in Nietzsche; in ranking other academics; and in argumentation. It is due to the latter that he is able to fool himself into believing that all the arguments for his preferred position are solid, while all counterarguments can be ignored.

All of which is to say that training in argumentation isn't likely to produce libertarians, except for those people who are already inclined towards libertarianism in the first place.

T.R. Elliott writes:

Silas: You apparently don't understand. Neo-classical economics is theoretically unsound. It's a fact. Out of curiosity, are you an economist?

See, here's how I think it works. I'll use a physics analogy. When I studied physics, many students spent a lot of time focused on the fundemantals, e.g. quantum theory was a particular focus. The obsessioin borders on the metaphysical, and if you have any understanding of physics and its history you'll know that Bohm, for example, put great effort, with the support of Einstein, into defining a more classical, deterministic view of quantum mechanics.

Here's what most professors said in response: "the evidence for quantum theory is outstanding." We don't understand why it works. But it is (a) theoretically sound and (b) experimentally sound.

Economics is different. I suspect that economics students are not as inquisitive. I suspect that they buy into the supply and demand curves as a given and then focus on applications.

Yet here's the problem. Unlike quantum mechanics, the foundations of neoclassical economics are (a) theoretically unsound and (b) experimentally unproven.

It's largely anecdotal. Or ideological. So when I find sources of propaganda, those who speak that "non-economists don't understand that..." I raise the red flag. As should others.

Now, let's consider the economics community at a broader scale--not those who might be focused on the fundamentals. You've got folks like, for example, James Hamilton, doing economics analysis, admitting that there are major problems, that it is a social science, but still using the tools he has to describe what is going on. Description. That's important. Trying to describe the past. That is one realm. Less ideological. More scientific.

Then we have the next level. The proselytizers. Or purists. Ideolgues. I'd put in reactionary people (Kling is probably a good example) and Objectivists (Caplan is probably a good example). In this realm, the point is not good theory. The point is argument. To advance an ideoligical line of thinking. The arguments are constructed using the language of economnics to make them sound "reasonable." Often they are (a) correct and (b) the arguments probably are reasonable. But just as often, they are dead wrong.

I realize I annoy when I meta analyze here, but I think my points are very valid. Kling, on the one hand, is highly reactionary if you read his writings, and look at the place in which they appear (TCS, Fox, WSJ--all bastions of reactionary thinking). Highly moralistic. With a dose of libertarianism. Protectionist in particular cases (e.g. national defense, e.g. defining borders for Israel). And Caplan is more on the amoral side--perhaps the anarchic libertarian. This is not a criticism.

Financial theory, as I understand it, is not even based on the tenets of the neoclassical economics that is taught in economics classes because it does not work. Yet financial markets are the most liquid markets that exist. If neoclassical economics doesn't work in financial markets, why would you think it works in supermarkets? That I don't understand.

Please note: this is not an argument for any particular solution. McCauley, for example, points out the irrationality of state planning, as he points ou the failures of unregulated markets.

Silas Barta writes:

T. R. Elliot: what about the things I said?

Bill says:

"In my own case, I came to libertarianism after flirting with most other political ideologies and finding all of them lacking. If one spends enough time studying politics and politicians, and doing so in a broad and open manner, skepticism of government is likely to be the result. Being skeptical of government is a prerequisite of libertarianism."

The story of my political history is similar. I grew up in a "god'n'country" conservative home, church (Dutch reformed, as it were), and community. Went from "left" to "right" in a matter of years, "flirting" all the way along, as you aptly put it.

Maybe that's what sent me in the direction of contemporary liberalism (for example, was an entusiastic listener of Rage Against the Machine - but never agreed with even half of their politics), even though I wouldn't have called it that at the time. Or maybe it was attending public school that pushed me in that direction.

In any event, I saw left-liberalism (maybe most accurately "social democracy") as the house of cards it is, embraced god'n'country conservativism for awhile, and then fairly quickly found my way to libertarianism, via Austrian economics; I now consider myself neither left nor right, nor consider the "left/right" dichotomy to have any true meaning, except as a tool for people in the mainstream to pigeonhole each other.

Either way, my libertarianism sure has not come from anything I have been taught in any public education apparatus - unless as a reaction to what I was told about politics during my 12 years in public primary and secondary schools. But I still listen to my old RATM CD's once in awhile as a musical fan.

James writes:

TR says, "Financial theory, as I understand it, is not even based on the tenets of the neoclassical economics that is taught in economics classes because it does not work."

Which financial theory did you have in mind?

When you take seriously the words of anyone who claims that "...the Black-Scholes option pricing model is the only falsifiable and partly successful model within the economic sciences," I have to be curious as to what limited set of models you think economists have put forth and what you think of as being falsifiable. Ever hear of the Phillips Curve? The PPP model of exchange rates?

For that matter, let's be frank. I suspect that you are just criticizing economics because it has implications that don't sit well with your ideology. (Not really, but do you think that impugning of motives is a valid criticism in this case?)

Robert writes:

I was a double major in philosophy and economics at a school famous for it's philosophy program.

One point that hasn't been mentioned concerns the unique freedom from ideological bias found in these departments.

I can't say philosopy directly helped to turn me into a full fledged conservative (although I did, post-911). But what was very valuable is that I can not remember a single incident where I detected liberal bias in my education.

Of course, my sensors weren't up then. But, relative to the harsh bias that does exist, I think it was invaluable that my education was one of free and open inquiry as you can get. Classics would be another good choice.

If I had to do it all over, I'd be a double major in Classics and Mathematics. You can do anything with that.

Robert Speirs writes:

"Feel free to consider me the exception that proves the rule."

Sigh. "Exception that proves the rule" means "exception that puts the rule to the test" (proof in the whisky sense) not "exception that makes the rule stronger" (proof in the logical sense). How could an example of when a rule doesn't work (an exception) make one more confident that it does work? Or were you being sarcastic?

SJCstudent writes:

I was very shocked to read the claim that a classical education will lead to conservatism and libertarianism. I am 2 weeks away from completing a classics undergrad, focusing heavily on the history of philosophy and mathematics. Moreover, I am beginning an Econ. M.A. in the fall. I've found that classical thought has been relatively neutral in regards to political persuasion, and most people that claim that "the classics will show you that my ideology is correct" have have determined this only by placing more weight on the philosophers with which they happen to agree.

Moreover, economics is only a fraction of the picture, and it, as a study, ignores many aspects of the dynamic human spirit. An act may be economical but not ethical, etc. Silas Barta's remark, that truly smart people don't work in academia, is untrue. It is more likely that those with well balanced educations who are less prone reduce the human spirit to mere commerce are the ones found in universities. Those jumping into the market solely for individual gain could probably be better characterized as clever egocentric hedonists. (I don't mean hedonism in the pejorative sense. I mean to point out that the market can, at most, provide material pleasures.)

I am aware that classical economics suggests that the opulence of all is raised by the individual working to further his own profits from stock or labor. I do question, however, if this is at all the sake for which those engaged in the market participate. I contend that it isn't.

Eric Rasmusen writes:

One problem with knowledge is that the more educated person knows more ways to fool himself, if that is his inclination. He can pick and choose among arguments and facts, based on what conclusions he wants.

Classics might help, though, because it forces the student to read people who think very differently from the modern convention.

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