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Economics vs. the Humanities

June 30, 2010

In a recent post, I noticed certain parallels between the role of fancy math in economics and “cultural theory” in the humanities: both are based on highly questionable assumptions that smart young people nevertheless come to embrace due to the tremendous investment of time and intellectual energy demanded by graduate programs.

Yet if Mike Rorty’s experience auditing a grad-level course is at all indicative of broader trends, it appears that economics has even more of an indoctrinating effect than my former discipline of literary studies. Here’s Rorty:

And speaking as someone who has taken graduate coursework in “continental philosophy”, and been walked through the big hits of structural anthropology, Hegelian marxism and Freudian feminism, that graduate macroeconomics class was by far the most ideologically indoctrinating class I’ve ever seen. By a mile. There was like two weeks where the class just copied equations that said, if you speak math, “unemployment insurance makes people weak and slothful” over and over again. Hijacking poor Richard Bellman, the defining metaphor was that observation that if something is on an optimal path any subsection is also an optimal path, so government just needs to get out of the way as the macroeconomy is optimal absent absurdly defined shocks and our 9.6% unemployment is clearly optimal.

To put the quote in context, Rorty is arguing (contra Kartik Athreya) that much of the current debate over fiscal policy has to do with issues addressed in Econ 101, and that bloggers therefore may have as much of value to say as PhDs. If anything, Rorty contends, it is the econ professors — John Cochrane, Eugene Fama, and others — who have been saying “bizarre and dumb things.”

Into a megaphone, I might add. Say what you will about English professors, but at least they are not taken seriously.

3 Comments leave one →
  1. July 1, 2010 10:42 am

    You would like Nassim Taleb. He constantly loves to berate economists as not knowing as much as cab drivers. He has a few econtalk podcasts, the first two are the most illuminating. This is a good lecture from him, that says the same things.

    Your also hitting on the Austrian critique of modern macro, that it’s been overly mathematized.

    The thing that gets me with Academia in general is how prevalent groupthink is. Your right, it is just plain old indoctrination. They don’t like new ideas. They don’t have any problem with using pseudo-science or as Hayek called it Scientism, to shut out any and all competing ideas. Academia is the ultimate monopoly.
    You’d think liberals, both classical and modern, who are against monopolies would be up in arms against what goes on in Academia.

    Another thing you might want to think about is grade inflation. The kids coming out of school just aren’t as good as they used to be. I wrote a bit about it here:

    I completely disagree with Rorty though, it’s the Keynesian approach that is the dominant paradigm in Macro today. He quotes a guy talking about Government multiplier, but fails to mention that the notion of the multiplier comes from over mathemetizing macroeconomics, PQ=C+I+G+NX. Hayek showed had fundamentally flawed the Keynesian approach is, but just as you described, Hayek’s theory wasn’t mathy enough and didn’t pass groupthink/indoctrination muster. It’s obvious that Rorty has an ideological bent towards Keynesianism, which I think most modern liberals have. Keynes gives credence to the idea of government intervention with insane notions of the paradox of thrift and his disciples’ notion of zero bound.

  2. innocentsmithjournal permalink*
    July 2, 2010 2:11 pm

    Yeah, it would be difficult to top my cynicism about academia. Anti-authoritarian authoritarianism, that’s the gist — in English departments at least.

    I’ll check out your post and the podcast.

    • July 2, 2010 3:42 pm

      Thanks. It’s nice to have an actual debate that doesn’t degenerate into name calling or moral superiority like most do. I’m amazed that people think that works.

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