This question was prompted by this study by Mohsen Javdani and Ha-Joon Chang, which tries to show two things: mainstream economists are biased against heterodox economists, and also tend to favour statements by those close to their own political viewpoint, particularly on the right. I don’t want to talk here about the first bias, or about the merits or otherwise of this particular study. Instead I will take it as given that ideological bias exists within mainstream academic economists (and hereafter when I just say ‘academic economics’ I’m only talking about the mainstream), as it does with many social sciences. I take this as given simply because of my own experience as an economist.
I also, from my own experience, want to suggest that in their formal discourse (seminars, refereeing etc) academic economists normally pretend that this ideological bias does not exist. I cannot recall anyone in any seminar saying something like ‘you only assume that because of your ideology/politics’. This has one huge advantage. It means that academic analysis is judged (on the surface at least) on its merits, and not on the basis of the ideology of those involved.
The danger of doing the opposite should be obvious. Your view on the theoretical and empirical validity of an academic paper or study may become dependent on the ideology or politics of the author or the political implications of the results rather than its scientific merits. Having said that, there are many people who argue that economics is just a form of politics and economists should stop pretending otherwise. I disagree. Economics can only be called a science because it embraces the scientific method. The moment evidence is routinely ignored by academics because it does not help some political project economics stops being the science it undoubtedly is.
Take, for example, the idea - almost an article of faith in the Republican party - that we are on the part of the Laffer curve where tax cuts raise revenue. The overwhelming majority, perhaps all, of academic economic studies find this to be false. If economics was merely politics in disguise, this would not be the case. This is also what distinguishes academic economics and some of the economics undertaken by certain think tanks, where results always seem to match the political or ideological orientation of the think tank.
There is a danger, however, in pretense going too far. This can be particularly true in subjects where empirical criticism of assumptions or parameterisation is weak. I think this was the basis of Paul Romer’s criticism of growth theory and microfoundations macro for what he calls mathiness, and by Paul Pfleiderer for what he calls ‘chameleon models’ in finance and economics. If authors choose assumptions simply to derive a particular politically convenient result, or stick to simplifications simply because it produces results that conform to some ideological viewpoint, it seems absurd to ignore this.
Romer’s discussion suggests that it is at least possible for ideological bias to send a branch of economics off in the wrong direction for some time. I would argue, for example, that Real Business Cycle theory in business cycle macro, which was briefly dominant around 40 years ago, was in part influenced by a desire among those who championed it to look for models where policy had little role. In addition, it showed up economists tendency to ignore other social sciences, or even common sense, at its worse.  It didn’t last because explaining cycles is so much easier when you assume sticky prices, as most macroeconomists now do, but it may be possible that other aspects of mainstream economics may be ideologically driven and persist for a much longer time (Pareto optimality?), and mainstream economists should always be aware of that possibility. One of my first posts was about the influence of ideology on the reaction of some economists to Keynesian fiscal stimulus.
The basic problem arises in part because empirical results are never clear cut and conclusive. For example the debate about whether increases in the minimum wage reduce employment continues, despite plenty of empirical work that suggests it does not, because there is some evidence that points the other way. This opens the way for ideology to have an influence. But the political implications of academic economics will always mean that ideology plays a role, whatever the evidence. Even when evidence is clear, as it is for the continuing importance of gravity (how close two countries are to each other) for trade for example, it is possible for an academic economist to claim gravity no longer matters and gain a huge amount of publicity for their work that assumes this. This is an implication of academic freedom, although in the case of economics, I still think there is a role for an organisation like (in the UK) the Royal Economic Society to point out what the academic consensus is.
Does this mean economics is not a true science? No, because ideological influence does not trump data when the data is very clear, as in the case of the Laffer curve or gravity equations, although ideology and academic freedom may allow the occasional maverick to go against the consensus. That in turn means that it is important for any user of economics to be aware of possible ideological bias, and always establish what the consensus is, if it exists, on an issue. Could ideology influence the direction particular areas of economics take for some time? The evidence cited above suggests yes. So while I have no quarrel with the pretense that ideology is absent from academic economics in formal discourse, academics should always be aware of its existence. In this respect, some of the points that the authors of this study mention in the discussion section of their paper are relevant.
 This reflected the introduction of a microfoundations methodology which soon began to dominate the discipline, and which I have talked about elsewhere (e.g. here and here).
I agree with this as far as it goes, but it seems to assume that the ideological/political inclinations of economists are exogenously determined and not at all influenced by the market for economists and economic ideas, and to ignore the possibility that what emerges as the mainstream is itself partly ideologically driven. How else to explain, for example, the mobilisation of vast intellectual resources in support of over-expanded deregulated financial markets and institutions in the decades leading up to the financial crisis; or, on a smaller scale, the excessive credibility and influence accorded to economists who gave intellectual cover to the austerity policies in the current decade.ReplyDelete
One doesn’t, of course, need to impugn the honesty or integrity of individual economists to make this point- one merely needs to observe that those whose prior beliefs or prejudices happen to support such ideas will tend to flourish, and vice versa. Thus it is that to an uncomfortable extent, the mainstream is influenced in terms of its research agenda and opportunities for professional advancement by the political and economic interests of wealth and power.
I would argue there is no area of science or engineering that is exempt from biases. The funding process for scientific research is not as unbiased as people would think.ReplyDelete
It is true that having a strong paper that is well argued and provides significant supporting evidence will get past the reviewers much more easily than a paper lacking rigour, but the fact is that there are domains that are drawing much more interest than others. Fifteen years ago, there was limited interest in research on neural networks, and few reviewers cared to accept papers on the topic. On the other hand, today, with a bit of rebranding ('deep learning') and most of the papers I see are on neural networks, even in domains where we have credible alternative solutions.
Economics ― not science, not ideology, just useful idiocyReplyDelete
Comment on Simon Wren-Lewis on ‘How should academic economics cope with ideological bias’
A closer look at the history of economic thought reveals that there are TWO economixes: political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
The historical fact is that theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years: Walrasianism, Keynesianism, Marxianism, Austrianism, MMT are mutually contradictory, axiomatically false, and materially/formally inconsistent. This pluralism of provably false theories is NOT science.
However, from Adam Smith/Karl Marx onward to the faux ‘Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel’ academic economists claim to do science. As Simon Wren-Lewis asserts: “Economics can only be called a science because it embraces the scientific method. The moment evidence is routinely ignored by academics because it does not help some political project economics stops being the science it undoubtedly is.”
It is NOT. Fact is that economists continuously violate scientific standards which are well-defined since antiquity: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)
The scientific method implies the elimination of falsified approaches/hypotheses/theories. This does NOT happen in economics as Morgenstern criticized back in 1941: “In economics we should strive to proceed, wherever we can, exactly according to the standards of the other, more advanced, sciences, where it is not possible, once an issue has been decided, to continue to write about it as if nothing had happened.” Or as Hands put it: “... suppose they did reject all theories that were empirically falsified ... Nothing would be left standing; there would be no economics.”
Economists never managed to produce more than proto-scientific garbage or to rise above the level of what Feynman called cargo cult science: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”
What is missing to this day is the materially/formally consistent theory of how the monetary economy works. Economists do NOT strive for clear-cut true/false answers but instead keep everything in the swamp between true false where “nothing is clear and everything is possible.” (Keynes)#1 Vagueness is a tried and tested survival strategy because “… you cannot prove a vague theory wrong.” (Feynman)
See part 2
Historical fact is that economists are too stupid for the elementary math that underlies macroeconomics. To this day, Keynesians, Post-Keynesians, and MMTers use the sectoral balances equation (I−S)+(G−T)+(X−M)=0 which is provably false because it lacks the balance of the business sector, i.e. macroeconomic profit.#2 This is not a minor mistake but invalidates the whole of macroeconomics and microeconomics. Because economic theory is false, economic policy guidance NEVER had sound scientific foundations.
The heap of inconsistent economic approaches has no truth-value, however, this does not matter much in the political realm where all that counts is propagandistic use-value. This is why proto-scientific garbage is still around. Economics has always been a well-stocked rummage table for arguments that help to secure the status quo. More has not been expected by the founders and funders of economics departments, chairs, and institutions. And this has always been delivered. Rockefeller called the university ‘the best investment’ he ever made.
This is the built-in bias of economics since J. S. Mill, who was 35 years on the payroll of the East India Company and defined economics as “inexact and separate science”. Economics is NOT a science and NOT an ideology.#3 Economics is agenda-pushing in the garb of science. To this day, economics lacks valid scientific foundations. This holds for both orthodox and heterodox economics and Simon Wren-Lewis is no exception.#4-#7
#1 And the answer is NCND ― economics after 200+ years of Glomarization
#2 The correct balances equation reads (I−S)+(G−T)+(X−M)−(Q−Yd)=0. See also: Wikipedia and the promotion of economists’ idiotism (II)
#3 An ideology is a manufactured ensemble of ideas/beliefs/norms/symbols as a means of creating/upholding/mobilizing group identity, i.e. a more or less sharp distinction between We (inclusion) and the Rest (exclusion). See also Wikipedia.
#4 Macro ignorance: Why Simon Wren-Lewis does not come to grips with the plain MMT-fraud
#5 Economic policy and the skirmishes of failed/fake scientists
#6 Are economics professors really that incompetent? Yes!
#7 The retirement of a fake scientist and real agenda pusher
“Economics can only be called a science because it embraces the scientific method.”ReplyDelete
In 1987, Michael Fish wrongly dismissed the possibility of a hurricane. Subsequently, meteorologists embraced scientific method. They went back to basics, re-examined their methods, their data collection and their forecast tools and today we enjoy an excellent forecasting service as a consequence.
The economists at the Treasury forecast a rise in unemployment of between 500,000 and 800,000 in the short term, if the UK voted Leave. Professor Sir Charles Bean endorsed this estimate and stated that the analysis employed “best-practice techniques, (which) provides reasonable estimates of the likely size of the short-term impact of a vote to leave on the UK economy.” We now have the highest level of employment since 1971.
This was the most important economic forecast in decades. It was supposed “To inform the decision that the British people will make on whether the United Kingdom (UK) should remain a member of the European Union (EU).” The employment forecasts were just about as wrong as they possibly could be. The response of the UK economic community has been grossly unscientific. There has been no clear or credible explanation of what went wrong. There has been no systematic attempt to develop a model that could retrospectively forecast a more realistic outcome. We have received no information on what changes economists have made to their understanding or their models in response to this massive failure. If there has been any media bias in the reporting of this, then that bias has been entirely sympathetic to economists. There has been little if any attempt to hold economists to account. Meanwhile, the British public know full well that economists have abandoned any pretence of scientific methodology and that they have been left to themselves to make their own judgements on the long term effects of Brexit.
Just suppose the Referendum had gone the other way, we would now be suffering a plethora of confirmatory bias from smug economists congratulating themselves on correctly forecasting booming employment in contrast to the rising unemployment that they had predicted for a Leave vote.ReplyDelete