Economists on Economics

by Forgot About Keynes

This is the first post in an open-ended series on methodology—the way in which economics is done—where I’ll be collating quotes by professional economists (and other academics) on economics itself. The idea comes from a post by Unlearning Economics. This will be convenient for me as a way of bookmarking ideas and opinions for later use and should, I hope, be entertaining and easier to digest than my longer articles. 

In Capital in the Twenty-First Century, Piketty bemoans the artificially created gulf between economics and the other social sciences with which he argues it belongs. Economics may pretend to a greater degree of academic rigour, but its use of quantitative methods is often gratuitous.

Economists today are full of enthusiasm for empirical methods based on controlled experiments. When used with moderation, these methods can be useful … But these new approaches themselves succumb at times to a certain scientistic illusion.

The new methods often lead to a neglect of history and of the fact that historical experience remains our principal source of knowledge … To be sure, historical causality is always difficult to prove beyond a shadow of a doubt … Nevertheless, the imperfect lessons that we can draw from history, and in particular from the study of the last century, are of inestimable, irreplaceable value, and no controlled experiment will ever be able to equal them. To be useful, economists must above all learn to be more pragmatic in their methodological choices, to make use of whatever tools are available, and thus to work more closely with other social science disciplines. (Piketty, 2014)

Varoufakis reveals in a public lecture that while he considers himself to be a Marxist, the research he carried out in the 1980s for his PhD could not be further removed from these personal beliefs. His colleagues then were neoclassicals and it turns out that they were not as earnest as he hoped they would be.

I had this bourgeois view that if you presented these Anglo-Saxon professors with a mathematical proof that their model is wrong, that they would care. They don’t. They used to. You know, people like Frank Hahn, Kenneth Arrow and so on … the older generation cared about the seaworthiness of their theoretical vessel. This lot now don’t give a shit … and it is very discouraging. (Varoufakis, 2013)

Economics, he warns, is bad for your mental health. Why study it then? Because, as Joan Robinson argued, you need to understand economics in order not to be deceived by economists … especially in an age when its concepts are couched in the wantonly opaque language of mathematics.

In From Political Economy to Economics, Ben Fine and Dimitris Milonakis contrast the views of Bertrand Russell with those of John Maynard Keynes. While Russell believed in formalist analysis, Keynes insisted upon common sense reasoning.

The atomic hypothesis which has worked so splendidly in physics breaks down in psychics. We are faced at every turn with the problems of organic unity, of discreteness, of discontinuity – the whole is not equal to the sum of the parts, comparisons of quantity fail us, small changes produce large effects, the assumptions of a uniform and homogeneous continuum are not satisfied. (Fine & Milonakis, 2009: 277)

Keynes decries the attitudes of even his contemporaries, whom he sees as obsessing with adhering to the strictures of scientific methods, regardless of whether or not they are truly appropriate.

Keynes … referred to Russell’s method as “extravagantly scholastic”. He thus reiterated the warning … that “in writing economics one is not writing either a mathematical proof or a legal document”’ (Ibid.)