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tomandlu

Mainstream Economics Is In Denial: The World Has Changed

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http://www.theguardian.com/commentisfree/2013/oct/28/mainstream-economics-denial-world-changed

The Cambridge economist Victoria Bateman looked as if saturated fat wouldn't melt in her mouth, yet demolished her colleagues. They'd been stupidly cocky before the crash – remember the 2003 boast from Nobel prizewinner Robert Lucas that the "central problem of depression-prevention has been solved"? – and had learned no lessons since. Yet they remained the seers of choice for prime ministers and presidents. She ended: "If you want to hang anyone for the crisis, hang me – and my fellow economists."

What followed was angry agreement. On the night before the latest growth figures, no one in this 100-strong hall used the word "recovery" unless it was to be sarcastic. Instead, audience members – middle-aged, smartly dressed and doubtless sizably mortgaged – took it in turn to attack bankers, politicians and, yes, economists. They'd created the mess everyone else was paying for, yet they'd suffered no retribution.

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Herdism in academia is powerful and there is a complete lack of critical thought as you don't want to stand out from the crowd.

Seems to be so in some of the woolier subjects at least. Pretty sad to think that there was probably better economic thinking on this board in 2005 than there was at Cambridge University but if that article isn't exaggerating than maybe it was actually so. :blink:

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They are paid to be cocky and everyone is surprised when they are.

Herdism in academia is powerful and there is a complete lack of critical thought as you don't want to stand out from the crowd.

Do you have much experience in academia ?

From my experience this is not the case at all.

Sure you get schools of thought developing, and people joining those schools to add their own work. But ultimately if there is a major flaw in someones argument then your average "cocky" academic is only to keen to point it out, and no theory that is fatally flawed will survive. That's how the next generation make their careers.

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Do you have much experience in academia ?

From my experience this is not the case at all.

Sure you get schools of thought developing, and people joining those schools to add their own work. But ultimately if there is a major flaw in someones argument then your average "cocky" academic is only to keen to point it out, and no theory that is fatally flawed will survive. That's how the next generation make their careers.

Sounds about right...but people dont want to be told they are wrong....customers of the Financial Industry I mean, so voices of dissent are drowned out by the VI and welcomed to be doing so.

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Do you have much experience in academia ?

From my experience this is not the case at all.

Sure you get schools of thought developing, and people joining those schools to add their own work. But ultimately if there is a major flaw in someones argument then your average "cocky" academic is only to keen to point it out, and no theory that is fatally flawed will survive. That's how the next generation make their careers.

+1.

Herd thinking certainly exists within working groups, especially if under the leadership of a senior academic who is pushing an agenda, but peer reviewers or those from other (competing) institutions would be all too keen to rip you apart if you were talking bo!!ocks.

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+1.

Herd thinking certainly exists within working groups, especially if under the leadership of a senior academic who is pushing an agenda, but peer reviewers or those from other (competing) institutions would be all too keen to rip you apart if you were talking bo!!ocks.

So did economists disagree before 2008? Do they disagree now?

Is it just a case of the economists who say things that suit particular groups of business people / politicians getting a hearing / patronage?

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Do you have much experience in academia ?

From my experience this is not the case at all.

Sure you get schools of thought developing, and people joining those schools to add their own work. But ultimately if there is a major flaw in someones argument then your average "cocky" academic is only to keen to point it out, and no theory that is fatally flawed will survive. That's how the next generation make their careers.

http://www.iea.org.uk/in-the-media/press-release/can-364-economists-all-be-wrong

In 1981 almost the entire economics profession – 364 academic economists including many professors at leading universities – signed a letter to The Times in response to Geoffrey Howe’s budget arguing that the government’s economic policy was fatally flawed, had no basis in economic theory and should be abandoned in favour of alternative policies.

I don't recall our leading economists doing a similar letter about the housing bubble. Although I look forward to being corrected.

When our politicians talk about "paying off the deficit" I don't recall a single press article where any of our leading economists or political academics highlight they are morons.

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Also mentioned in the article is the film Inside Job.

After all, the most significant thing to emerge from academic economics in the past five years has not been any piece of research, but the superb documentary Inside Job, in which film-maker Charles Ferguson showed how some of the best minds at American universities had been paid by Big Finance to produce research helping Big Finance.

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Herdism in academia is powerful and there is a complete lack of critical thought as you don't want to stand out from the crowd.

I thought the received understanding was that any two economists would give you three different opinions.

So which one is true?

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Is it just a case of the economists who say things that suit particular groups of business people / politicians getting a hearing / patronage?

Yes, that's the problem, most of what passes as economics in the media is in fact semi-informed opinion paid for by vested interests and filtered through the BBC's left wing bias.

If I remember back to the 90's there were some proper academics of a right wing bent who got airtime on the BBC, these day's they'd be written off as loonies and it'd be the usual array of paid left wing activists opposing cuts on Keynsian grounds.

Edited by Goat

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+1.

Herd thinking certainly exists within working groups, especially if under the leadership of a senior academic who is pushing an agenda, but peer reviewers or those from other (competing) institutions would be all too keen to rip you apart if you were talking bo!!ocks.

This manifestly didn't happen with Economics. The neoclassical absolutism that grew up after WW2 ensured that alternative approaches such as Minsky's were never published in the leading journals, and even the contradictions exposed by Keynes were suppressed or ignored.

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Do you have much experience in academia ?

From my experience this is not the case at all.

Sure you get schools of thought developing, and people joining those schools to add their own work. But ultimately if there is a major flaw in someones argument then your average "cocky" academic is only to keen to point it out, and no theory that is fatally flawed will survive. That's how the next generation make their careers.

Ah, but you have to get past the gate keepers, and whilst not impossible it can be quite a fight...and one can get very sick of that after a while. My experience of science was that it is often incredibly conservative. I believe Max Planck said (paraphrase) "science progresses one funeral at a time", and I can certainly think of a number of fields that I worked on the periphery of where progress is being blocked by incumbents with power and their less able proteges.Good people and their ideas can be driven out simply because the path to publication for novel ideas is often more difficult than epsilon science and the job market is tight.

Edited by Tiger Woods?

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Ah, but you have to get past the gate keepers, and whilst not impossible it can be quite a fight...and one can get very sick of that after a while. My experience of science was that it is often incredibly conservative. I believe Max Planck said (paraphrase) "science progresses one funeral at a time", and I can certainly think of a number of fields that I worked on the periphery of where progress is being blocked by incumbents with power and their less able proteges.Good people and their ideas can be driven out simply because the path to publication for novel ideas is often more difficult than epsilon science and the job market is tight.

A good idea draws support and makes it past the gatekeepers. All you have to do is find people to support it. People who understand it and the benefits it will bring to them and will get behind it. That's how careers are made. If you can't persuade anyone your idea is good then you are a poor scientist, either because your ideas are bad or your communication is lacking. Because science isn't just about coming up with great ideas, but communicating them to other people as well.

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As the above upton sinclair quote suggests...

One way or another, most economists wages are paid either directly by the government (universities) or indirectly through the banking-government matrix (financial companies).

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Ah, but you have to get past the gate keepers, and whilst not impossible it can be quite a fight...and one can get very sick of that after a while. My experience of science was that it is often incredibly conservative. I believe Max Planck said (paraphrase) "science progresses one funeral at a time", and I can certainly think of a number of fields that I worked on the periphery of where progress is being blocked by incumbents with power and their less able proteges.Good people and their ideas can be driven out simply because the path to publication for novel ideas is often more difficult than epsilon science and the job market is tight.

+1

A good idea draws support and makes it past the gatekeepers. All you have to do is find people to support it. People who understand it and the benefits it will bring to them and will get behind it. That's how careers are made. If you can't persuade anyone your idea is good then you are a poor scientist, either because your ideas are bad or your communication is lacking. Because science isn't just about coming up with great ideas, but communicating them to other people as well.

Yes, but when the gatekeeper has a vested interest in defending their own ideas, they're generally not very receptive to some young upstart telling them they're wrong. I'd suspect it's a pretty quick way to ensure your contract doesn't get renewed.

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Ah, but you have to get past the gate keepers, and whilst not impossible it can be quite a fight...and one can get very sick of that after a while. My experience of science was that it is often incredibly conservative. I believe Max Planck said (paraphrase) "science progresses one funeral at a time", and I can certainly think of a number of fields that I worked on the periphery of where progress is being blocked by incumbents with power and their less able proteges.Good people and their ideas can be driven out simply because the path to publication for novel ideas is often more difficult than epsilon science and the job market is tight.

Depends on the field as well.

One thing that struck me is that Economics has 'schools'. This is not the case in sciences generally, except at the edges. There is no equivalent link 'Keynesian vs Neoclassical Physics'. Indeed, to me this looks like the political consequences of economic theories being 'Baked into the cake'.

Which does strengthen the 'gatekeeper' problem.

Worst thing is, Economics departments do very well from it; it seems that there is no incentive whatsoever to separate what I would call a scientific description of the economy - a bottom up model that would react to change in a realistic manner - from the value judgments of which policies are 'better'.

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A good idea draws support and makes it past the gatekeepers. All you have to do is find people to support it. People who understand it and the benefits it will bring to them and will get behind it. That's how careers are made. If you can't persuade anyone your idea is good then you are a poor scientist, either because your ideas are bad or your communication is lacking. Because science isn't just about coming up with great ideas, but communicating them to other people as well.

This is an extremely simplistic and ahistorical view of the life cycle of a new idea. Okay, so you've come up with a new idea and you have a tiny amount of data to support it. Why should anybody listen to you? You're a nobody, your idea conflicts with well-established ideas with many years' worth of research supporting them, it's not really relevant to what happens to be fashionable within the field at the moment, you haven't even looked at all these other aspects of your idea and few will care when you reply "I haven't had the time or money to do that yet". The establishment in your field sees no reason to divert resources away from projects which look like what they do in their own labs so you can investigate your crazy idea. You have a family to support and bills to pay, the job market is tight and the cost of living keeps on rising. Maybe you should work on something a bit more mainstream, just for a little while as you try to become more established.

I'm not saying it's impossible for a good idea to rise up and take over, but it's certainly not a smooth process. Good new ideas can and do get dropped down the back of the filing cabinet of history for years or decades.

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+1

Yes, but when the gatekeeper has a vested interest in defending their own ideas, they're generally not very receptive to some young upstart telling them they're wrong. I'd suspect it's a pretty quick way to ensure your contract doesn't get renewed.

Not really.

It doesn't really matter where you go in life, if you try to boss the place when you are in an inferior position you are going to come up against authority. Whether that be in science, politics, business, or just down the pub with the locals.

The question is both how the authority deals with that challenge and how the "upstart" presents their case.

Science is simply too big these days to allow people to ignore ideas and potential. If you don't take that idea and exploit it then someone else will if it is good enough.

And of course if you have an idea you believe in you should argue its case as strongly as possible. And hope that everyone else argues their case strongly as well.

There are many different styles of academic management. Some Profs are very hands on. Others just travel the world presenting results from their group, all the ideas come from the postdocs and postgrads. Some have very rigid ideas about what areas they want to work in, others are more free.

You also have to ask the question that if you are going to work for an academic in a particular area of research whether or not it is a good idea to hold a confrontational and orthogonal viewpoint to them in the first place. It's a bit like going to work for an arms manufacturer if you are a pacifist. Your job as a researcher is generally to support the interests of your group and battling is best done between groups rather than within them. If you don't agree with what the group is doing then the best option is to go to one that does or found your own. In general of course what happens in most situations is that the most disaffected hang around for ages moaning and complaining about how the place is run but do little to get out to a better place. A bit like industry really.

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The fact that there were no mass sackings of economists in the private sector despite the near universal failure to warn their employers of the crisis to come in 2008 is interesting- it implies that these companies employ economists not for their practical value but for their ceremonial value- in that respect they are like hotel doormen- a non essential but cosmetic role that is primarily about creating an image.

So in the private sector the role of the economist is to lend a gloss of intellectual respectability to decisions that are made by people who themselves would never be foolish enough to base those decisions on the opinions of economists.

So the reason that no economists lost their jobs as a result of failing to anticipate the meltdown of the economy is because those who employed them had no real expectation that their input would be of any practical value in the first place.

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Do you have much experience in academia ?

From my experience this is not the case at all.

Sure you get schools of thought developing, and people joining those schools to add their own work. But ultimately if there is a major flaw in someones argument then your average "cocky" academic is only to keen to point it out, and no theory that is fatally flawed will survive. That's how the next generation make their careers.

I agree with this in principle, but what you are omitting is the length of time the paradigm shift from current orthnodoxy to new orthodoxy can take. One of my favourite quotes in science is this:

You can judge the eminence of an academic by the length of time he holds up progress in his field

And I've found this to be generally true.

A great example is plate tectonics. My PhD supervisor obtained his PhD in geology, he used to talk about textbooks he was using in the early 80s containing all the evidence pointing to movement of the Earths crust,but never stating it explicitly.This was in spite of the fact that the theory had been developing for almost 100 years at that point and is now considered obvious.

Another story I love is how Oxford University almost didn't bother appointing a new professor of experimental philosophy (Physics) in the early 20th century because everything had already been discovered.

Science is a slow and often frustrating process, and economics is no different.

Edited by frozen_out

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I agree with this in principle, but what you are omitting is the length of time the paradigm shift from current orthnodoxy to new orthodoxy can take. One of my favourite quotes in science is this:

And I've found this to be generally true.

A great example is plate tectonics. My PhD supervisor obtained his PhD in geology, he used to talk about textbooks he was using in the early 80s containing all the evidence pointing to movement of the Earths crust,but never stating it explicitly.This was in spite of the fact that the theory had been developing for almost 100 years at that point and is now considered obvious.

Another story I love is how Oxford University almost didn't bother appointing a new professor of experimental philosophy (Physics) in the early 20th century because everything had already been discovered.

Science is a slow and often frustrating process, and economics is no different.

Hawking came close to declaring physics 'done' when he gave the Lucasian address in 1979.

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Science is a slow and often frustrating process, and economics is no different.

Not read back on all this, so apologies if asked already, but isn't economics subjective - it is only correct in some context - for us that context is winning elections.

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Not read back on all this, so apologies if asked already, but isn't economics subjective - it is only correct in some context - for us that context is winning elections.

I don't think so, or at least not anymore so than the way Newtonian mechanics is only correct in some context.

The problem as I see it is that economics as a science is probably unique in its reach, influence and ability to cause misery. If the experiment goes wrong you don't just blow the lab up and kill a couple of people, you cause untold misery for millions and maybe even a war.

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