The “cage match,” as Levitt put it, between the likes of John Cochrane and Eugene Fama against economists like Brad DeLong and Paul Krugman, continues apace.
A recent New Yorker piece by John Cassidy, “After the Blowup” (gated), asks what it means to be a “Chicago school” economist at this moment in history, and to what degree Chicago-school economics may be responsible for the financial crisis.
Richard Posner, unsurprisingly, is the hero of the article. But Fama, as Cassidy notes, was “genial” in his dismissal of Posner’s analysis; and Fama’s “equanimity was unshaken” even when discussing Krugman’s fierce criticisms. “My attitude is this,” he said. “If you are getting attacked by Krugman, you must be doing something right.”
Is there any other academic field in which standard decorum is valued so low?
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There are some pretty well known rivalries at the WWF’s School of Hard Knocks. Admittedly not an accredited institution, but one of the few places where you’ll see such deliberately crafted, published, and publicized rivalries. In both cases it serves to promote the names of the participants and to sell seats, either arena or lecture hall.
The real reason for infighting among economists is that economics is such an imprecise subject. It is just too complex, so any model that is made has flaws. Even in hind-sight, there isn’t any consensus about what caused certain events. Therefore, since each economist presents their own economic model, they want to bash the other’s economic model as flawed, even though theirs is likely flawed as well.
Economists like to think of their field as being based on scientific standards, but when it comes to the economy as a whole it is difficult to recreate situations and perform repeatable experiments with accurate verifiable results.
Economists can perform statistical analysis after the fact to find out how a shit in production or policy affected the economy, but without access to an alternate reality it is hard to recreate the same scenario with a control group.
This lack of hard, verifiable science creates a void of consensus in economics that does not occur in other real sciences. This void is filled with ideology, partisanship, and corporate profiteering. As fundamentalist religion divides people as does economic theology.
Actually, I think what we are seeing is good for economics.
Fama made some pretty elementary errors in talking about macroeconomics during the crisis – errors that a good undergraduate would not make (mistaking the the savings-investment identity for a law, for example) – and Krugman called him on those errors.
And what else could Krugman do? Should he just pretend that Fama hadn’t embarrassed himself and look the other way??
I agree that Krugman can sometimes seem harsh in his comments, and it must sting to be caught in his sights, but I’ll take an honest Paul Krugman over a host of lesser but possibly more polite public intellectuals any day.
Gene Fama mentioned in another related link that references how academic debate should occur:
http://www.newmarksdoor.com/mainblog/2010/01/a-bit-of-academia-as-it-should-be.html
During a May-day parade in Moscow in Stalin times the podium was packed with foreign dignataries.The parade of course consisted in showing the full power of the russian armed forces which was impresive enough,the only eye catching detail was that at the tail end of the gigantic parade was a full batalion of black suited man with white shirts,ties, a very bussines like attire and each one of them carryng an attache case.One othe visitors very surprised by the spectacle asked Stalin,Comrade ,what all that black dressed people are doing in the parade?,those Stalin answered all those fellows are economists and you my friend,you have no idea about all the damage these people can do.
As a “Chicago-school” economist educated at the University of Chicago I find this in-fighting and pettiness an affront to academic honesty and intellectual egalitarianism. Krugman, Cochrane, et al, have to realize that at the end of the day some people just like cucumbers better pickled.
Unfortunately for the big ego economists, and for the rest of us, the profession of economics is still in the middle ages/science fiction stage. This is not meant as an insult. It’s just that there is too much unknowable data and science has not progressed as far as the academics think. These folks do us wrong by thinking their particular school of thought is correct and any opposing views deserve insults in various publications and blogs. The biggest impediment to progress these days is an unwillingness to admit their past may not be as glorious as they think. Hey guys, both sides still have a lot to learn!