superbus: arrogant (Latin)

Yesterday I leveled a serious charge at the economics profession, especially that part of it that provides advice to policy makers. So you might think that I would eagerly respond to the question that the organizers posed to us, how do we reform the economics?

In fact, the opposite happened to me. As the meeting unfolded I became increasingly convinced that I personally have no interest in such a program. This doesn’t mean that the meeting was unproductive for me. I moderated one of the four subgroups, the one that focused on the evolution and dynamics of institutions. We had a great and very productive time. As a result, I personally (and I think our subgroup as a whole) made huge strides in understanding what institutions are, where they come from, how they change, what selection processes operate on them, how we can build a mathematical theory of institutions, and how we can test it empirically. So my primary concern was with advancing the science of institutions, and that worked very well.

But as I attended plenary discussions and discussions within other groups (the format of Strüngmann forums allows, indeed encourages it), I became increasingly convinced that the charge issued by organizers, which seemed to make sense when we plotted the Forum, is misguided.

Instead of trying to reform the economics, I feel we should simply do good science. There is no need for me to “bring” evolution and dynamics into the study of institutions; I do it automatically as a result of my training. So what we need to do is advance our understanding of how institutions evolve, and how we can help this process to produce ‘good’ institutions that result in greater political stability and better economic growth, and that increase people’s well-being. Then we need to communicate our results to the general public and policy makers.

Trying to persuade economists is a thankless and unnecessary task. Unnecessary, because if we do good science economists themselves will want to learn about it. Thankless, because the field of economics has a special status among other social sciences, which makes it quite resistant to incursions from outside.

Probably the best way for my readers to appreciate this second point is to read a new article by Marion Fourcade, Etienne Ollion, and Yann Algan, which just came out in Journal of Economic Perspectives this month. Somebody at the Forum helpfully provided a number of copies of the article, and I read it on the plane over the Atlantic Ocean.

Source

The article is titled, in a typical French fashion, “The Superiority of Economists,” thus reflecting both how the economists see themselves, and the ironic view that the authors take of their conceit. Economists think of their discipline as the most advanced, rigorous, and sophisticated of all social sciences. The majority of them feel they have nothing to learn from other, less ‘superior’ disciplines. 57 percent of them disagree with the statement that “in general, interdisciplinary knowledge is better than knowledge obtained by a single discipline.” Only 25 percent of sociologists and 9 percent of psychologists hold such a view. Economists are also much less likely to cite political scientists and sociologists, than those other social scientists citing across disciplines.

I can personally attest that the economists have dug a symbolic moat between themselves and the rest of social sciences by developing a peculiar and idiosyncratic jargon. As a result of my research being very interdisciplinary, I give a lot of talks at a variety of social science departments. I find that communicating with sociologists, anthropologists, and political scientists is easy and transparent. In economics department, on the other hand, I constantly run into communication problems. Economists frequently use the same term, with which I am familiar, in a very different, and sometimes even opposite sense.

Adding to their feeling of superiority, economists earn much more than other social scientists, especially at the top of the profession. The mean salary of top 10 percent in Economics is $160,000, while for top 10 percent of sociologists it is $118,000. Top economists have recently started earning more than top engineers.

And this is just their regular salary. Top economists derive large additional income by advising governments and corporations. Characteristically, most economists believe that their high levels of remuneration reflect their intrinsic worth, because they are smarter, more skillful, and harder working.

Economics is also a much more hierarchically organized discipline than other social sciences. There is a clear Table of Ranks for all economics departments. A department will only hire a Ph.D. student who graduated from a similarly or higher-ranked department, while placing their graduates at similar or lower-ranked universities. Other social sciences also follow this “prestige principle,” but the correlation between prestige and placement is the strongest in Economics. Fourcade and co-authors also show that power to place articles in top economic journals is also strongly concentrated. In fact, the universities publishing top journals strongly favor their own faculty when making decisions to accept a manuscript.

Much more so than for other social science disciplines, the American Economic Association is dominated by the top five departments. In fact, economists who don’t belong to the top 20 departments are entirely excluded from the leadership positions:

All these characteristics of Economics as a profession make economists an unlikely target of persuasion by outsiders. Economists should become more evolutionary and use more the methods of complexity science. But I now doubt that our Forum will make any impact on this proud and superior profession.