Another rant about the Globe and Mail’s coverage of economics

One of the featured articles in today’s Globe and Mail is on “Economists and their fairy tale world of prognostication.” 

I don’t mind people taking pot shots at the economics profession – I do it myself. But at least try to get the shot remotely on target.

Brian Milner writes that

Even its [economics’] most revered rules, like the law of supply and demand, don’t hold up to scientific scrutiny, he says. “Like unicorns, the plot of supply and demand is a mythological beast that is often drawn, but never actually seen,” he argues in his latest book, Economyths.

Yes, supply and demand are abstractions. But, none the less, they do a pretty good job of explaining behaviour.  When a good’s price goes up, the quantity demanded goes down. There are only one or two exceptions to this rule that have ever been documented. For example, one study found that a decrease in the price of rice led to a fall in Chinese farmers’ rice consumption.  Why? Cheap, subsidized rice made farmers so much better off that they could afford to eat meat instead.

Or take this passage from Milner’s article:

As behavioural economists have long insisted, markets are not inherently stable, rational or particularly efficient. “If you were going to say markets are not efficient, you would have to say markets are [also] not rational and they’re not at equilibrium. So you can’t really relax one of them without getting yourself into trouble, if you’re a mainstream thinker.”

Given that one of the pioneers of behavioural economics, Daniel Kahneman, won the 2002 Nobel  Memorial Prize in Economic Sciences, it is hard to argue that behavioural economics is not part of the mainstream.

I haven’t read Economyths. It doubtless makes some valid criticisms of the state of economics.  I’m happy for the author that it is getting coverage in the Globe and Mail.

I just wish Brian Milner had followed basic good journalistic practice and called an economist – say one of the team here – to hear the other side of the story.

Comments

[Mike Moffatt]

As behavioural economists have long insisted, markets are not inherently stable, rational or particularly efficient. “If you were going to say markets are not efficient, you would have to say markets are [also] not rational and they’re not at equilibrium. So you can’t really relax one of them without getting yourself into trouble, if you’re a mainstream thinker.”

Jeez. This would also seem to ignore the Nash/Selten Nobel Prize (you get all kinds of non-Pareto efficient outcomes in game theory, with the Prisoner's Dilemma being an obvious example) and the Mirrlees/Vickrey price for asymmetric information.

[Jeff V]

I can't really comment on to what degree behavioural economics is part of the mainstream, but I can say from expereince that it was totally absent from the PhD economic classroom (at least, in my not-so-authoritative sample of 1 school).

I think it is fair to observe that economists rely far too much on rationality and effiency, if only because they form key assumptions to the great bulk of their math. I suspect that most PhD's don't even realize how much they rely on these assumptions; they just learn to do the math, without ever really learning what the math means. (in addition, if you remove the assumption of normal distribtions, nearly the entire discipline of econometrics can be tossed into the rubbish bin.)

- Jeff V

[Kevin Milligan]

Hear hear to this.

You can read good chunks of this book on google books here. http://bit.ly/bACSFs

It doesn't get much better.

Economists welcome criticism. In the academy, we are well-known, if not infamous, for being direct, abrupt, and rude in criticizing each other (and others). There is a very healthy discussion about methodology. Bring it on. But, as Frances says, try to be remotely on target. That involves things like trying to understand what exactly the methodology is that you're criticizing.

He clearly has no clue what economists actually do and how we model things. The result is that level of criticism in this book is juvenile.

[Kevin Milligan]

Hi Jeff,

You're right that the 'core' courses in a first year PhD sequence are typically *very* slow to incorporate developments and tend to be very conservative, methodologically-wise. In favour of this approach, one might argue that it is good to understand the core theory used by most people before engaging in more critical approaches. Against this approach, one might contest this ordering of what is core and what is not.

You are right that many (but not all!) economic models used the concepts of rationality and efficiency. But this is *not* the same as saying that we assume all people in the real world are rational or that markets are efficient.

Re: efficiency. Most applied theory that I see typically shows some market imperfection that leads to inefficiency. Then the model explores how some institutional innovation might restore, or move in the direction of, more efficiency.

It seems that many people think that econ seminars involve us sitting around and nodding at each other about how efficient laissez-faire markets are. That is very far from the truth.

As for econometrics, lord knows there is lots to criticize. But I hope you recall the implications of the Central Limit Theorem. We don't just assume normal distributions because it makes our life easier (although that is certainly part of it). The Central Limit Theorem gives us some cover for the pervasive normality assumption.

[Frances Woolley]

There is something to what David Orrell is saying: “It seems to me the economy is very similar to a biological system. It has a lot of the same properties. It’s complex, it’s non-linear and it’s full of complicated networks,”

When I teach the first theorem of welfare economics, I illustrate it with this video about emergent complexity (I don't know if the students understand, but the pictures are pretty). In economics, like biology, incredibly complex behaviours can be generated by people following a few simple rules.

Explaining economic phenomena with insights from biology is cool. Knocking down straw men - some mythical economist who believes Econ 1000 is the literal truth - is not.

[Adam P]

"in addition, if you remove the assumption of normal distribtions, nearly the entire discipline of econometrics can be tossed into the rubbish bin.)"

Jeff V, I would submit that your sample is not authoritative because you clearly didn't learn anything.

[Kevin Milligan]

Frances, but as I understand his criticism, it is not 'complex phenomenon can be explained using simple models' but instead the opposite: 'simple models have no hope of explaining complex phenomenon.' He than brandishes his own specialty of numerically intensive complexity modeling that, in his view, clearly dominates what economists do. Stephen tweeted this apt xkcd comic yesterday: http://xkcd.com/793/

[Patrick]

"Even its [economics’] most revered rules, like the law of supply and demand, don’t hold up to scientific scrutiny"

Geez. Neither did Newton's Second Law, so I guess we ought to throw out all the engineering we've done in the last 400 years or so since it's obviously all wrong. BTW, good luck doing the math to build your relativistically correct car.

Frances you are way too kind. The article and the arguments are rubbish. Completely idiotic. Nobody who has taken the time to learn even a little about the state of modern economics would say that economists (with the exception of some die hard RBC types perhaps) believe that markets are efficient, always clear and the economy is always at equilibrium. How many Nobel's have been awarded for work addressing precisely these issues? And much of it is fairly accessible with a little effort.

This lazy pseudo intellectual rubbish drives me nuts. It's the same kind of know-nothing garbage used by the climate change deniers and it's hugely damaging to any kind of intelligent discourse.

Ugh.

[Mike Moffatt]

Q for anyone that has read the book in question: Does Orrell ever state any institutional reasons for why economists believe and act in the manner he believes they think/act? Or does he just assume idiots self-select into economics?

I really hope it's the former. Because stating that a group of people believe a bunch of crazy things without explaining WHY they do is, IMO, intellectually lazy.

[Adam P]

"I haven’t read Economyths. It doubtless makes some valid criticisms of the state of economics."

Frances, really? You think so?

Based on the passages you've cited I suspect that's not really true, I also suspect you don't really think this and were just being polite/balanced.

[Just visiting from Macleans]

I always find it is more effective to write to the columnist directly, or the editor of the section the article appears in (in this case the ROB). Or write a letter to the editor/ask for equal opportunity in an op-ed. You'd be surprised how responsive they can be.

[westslope]

Greenspan's policies earlier in this past decade were controversial. This was widely reported. Recall that overnight rates were stuck at 1%--ripe, fertile grounds for a frenetic boom in consumer durables.

It would be nice to see a journalist like Brian Milner talk intelligently about monetary policy in terms of growth-oriented mandates versus inflation targeting. Perhaps Milner could explain why armies of pundits followed every word of Alan Greenspan and why the past practice of purposive mystery is no longer.

And it would also be nice to read a journalist that understands the difference between risk and uncertainty.

[Frances Woolley]

Adam P: "Based on the passages you've cited I suspect that's not really true, I also suspect you don't really think this and were just being polite/balanced."

It is you who are being way too kind. I wanted to spend this morning running regressions, not reading Economyths, so was making a "hide your lack of knowledge with meaningless generalizations" type comment. I've just taken a look at the chapter on gender. It cites a few interesting studies (e.g. Julie Nelson's 1995 Journal of Economic Perspectives piece). But doesn't really rise above the sum of its parts. I don't know if the rest of the book is like that.

Just visiting - that's an idea.

Mike: "Does Orrell ever state any institutional reasons for why economists believe and act in the manner he believes they think/act?"

Right now it seems that the only chapter available on-line is the one on gender. He explains, e.g., risk-taking behaviour of people in the financial sector in terms of feminist theories of gender/masculinity and economic psychology research on testosterone and risk taking. But like I said, it doesn't really transcend the sum of its parts - the individual studies reported in the chapter are more interesting than the chapter itself. You'd learn more about feminist economics by reading Nancy Folbre's column (in Economix, I think) in the New York Times.

Westslope: "It would be nice to see a journalist like Brian Milner talk intelligently about monetary policy in terms of growth-oriented mandates versus inflation targeting. Perhaps Milner could explain why armies of pundits followed every word of Alan Greenspan and why the past practice of purposive mystery is no longer."

I was thinking of using Brian Milner's article as a hook for a longer post comparing the state of economics journalism in Canada (as exemplified by this article) with the state of economics journalism in the US (as exemplified by, e.g. the wide range of economists from Krugman to Levitt writing in the New York Times, Slate etc). Why does it seem to be so much better south of the border? I abandoned the idea after thinking that a couple of columnists is hardly a valid basis for comparison. What do you think?

[Stephen Gordon]

I say: go for it; this is not atypical. Trying to raise the level of debate on economics in Canada is the raison d'être of WCI.

[Jim Rootham]

If you are trying to understand the level of knowledge of economists in the general public you must realize that most peoples exposure to them is through policy proposals from particular institutions. Most of those reinforce the idea that all economists DO believe that Econ 1000 is the literal truth.

What economic model different from Econ 1000 supported the Washington Consensus?

One of my problems with economists is that they pursue efficiency with the single minded determination of a miser pursuing a coin rolling across the floor *.

* Obscure reference points for identifying the source (mangled) of this metaphor. Even more for determining non uniqueness.

[Joseph Heath]

This idea that rationality implies efficiency is extraordinarily difficult to dislodge, even with people who should know better.

For instance, doing my bit to improve economic literacy in Canada, I wrote this piece:
http://reviewcanada.ca/essays/2009/09/01/did-the-banks-go-crazy/

"...According to [a certain commonly held] view, rationality and efficiency are still an inseparable duo; it is just that banks and investors failed to act rationally. The other possibility is that no one went crazy, but that rationality and efficiency do not actually go together quite as neatly as many had assumed. Perhaps individually rational action, even in reasonably well-structured markets, is able to produce outcomes that are collectively self-defeating. The first theory is the easier sell. It is the theory that everyone wants to believe. Unfortunately, it is the second theory that is correct."

The very next issue, Janice Gross Stein comes back with a rebuttal that, as far as I can see, is simply a restatement of the commonly held view that rationality-implies-efficiency:
http://reviewcanada.ca/essays/2009/11/01/between-euphoria-and-fear/

"Which assumption political leaders make—are we rational or irrational?—matters to the kind of regulatory regime they design. If individuals are rational, then light regulation in efficient markets will do most of what needs to be done. We need to pay attention only to those cases where individual rationality produces collectively bad outcomes. If, however, we do not behave as microeconomic models of rationality suggest, and if our errors are not random but systematic, then preventing the next financial crisis is much harder."

I find the underlying reasoning elusive: Why should rational people be easier to regulate? If people are systematically irrational, then shouldn't this affect government actors just as much as it does market actors? How then are governments able to offer regulatory solutions? So many mysteries... I think, however, you can see clearly in this quote the political/ideological reasons for which she feels inclined to hold onto the view that she has. There is a tendency to embrace behavioral economics because it makes markets look bad, under the assumption that anything that makes markets look bad makes government look good.

[Nick Rowe]

Yep. It's hard to believe that educated people, poli sci especially, have never heard of prisoners' dilemma.

Part of the problem though may be that economists keep switching meanings when we talk about market efficiency. We sometimes mean pareto optimal, and other times we mean you can't make a profit.

[Phil Koop]

"There are only one or two exceptions to this rule that have ever been documented."

There have only been one or two examples of Giffen goods, you mean. Veblen goods, aka quality signaled by price, are not an uncommon phenomenon - downright ubiquitous in financial markets. To squeeze these into the supply/demand story requires some special pleading about non-monotonic demand curves, and that is an example of why non-economists don't take economics as seriously as you would prefer. There is always some just-so story available to smooth over any anomaly which is promptly discarded once the immediate need for it is past. How often do people remember that they have assumed demand curves have multiple local maxima when it comes time to talk about the law of one price? Somehow, none of the claims of economics ever seem to be falsifiable.

[Andrew F]

"It's hard to believe that educated people, poli sci especially, have never heard of prisoners' dilemma."

QFT. Prisoner's dilemma is a pretty important concept. They should be teaching it in high school, at least the story if not the math. Isn't this sufficient demonstration that rationality does not imply efficiency?

[Just visiting from Macleans]

Veblen goods, aka quality signaled by price, are not an uncommon phenomenon

I thought the same thing at the time, but had no idea they were called Veblen goods. This is fairly common in marketing / product positioning.

[Ian Lippert]

"Frances, but as I understand his criticism, it is not 'complex phenomenon can be explained using simple models' but instead the opposite: 'simple models have no hope of explaining complex phenomenon.' He than brandishes his own specialty of numerically intensive complexity modeling that, in his view, clearly dominates what economists do. Stephen tweeted this apt xkcd comic yesterday: http://xkcd.com/793/"

What exactly is his view of complexity modelling? It seems like a form of complexity modeling or network theory would be useful for economic analysis, but it seems like this kind of project is easier said than done. Even if many of his conclusions are wrong is their anything worth while in this guys work for economists?

[Frances Woolley]

Phil Koop - You are making serious criticisms of the economics discipline that can't be answered in one or two lines - especially your point about falsifiability. But read a few pages of David Orrell's Economyths at http://bit.ly/bACSFs - it's just random - sort of like Malcolm Gladwell without the insight and the underlying story that ties it all together. You're right on Giffin v. Veblen goods.

Ian Lippert: "What exactly is his view of complexity modelling?" On this computer I can read more of Economyths but unfortunately I still can't answer your question. Around chapter 8 it seems as if there's an idea being developed of society as an organism (an idea that dates back to John A Hobson, but Orrell doesn't mention this). But it never really gets further than just a semi-articulated idea. Honestly, you'd be better off reading Malcolm Gladwell.

[DO]

Hi,

Thanks for your interest in Economyths (or at least, a Globe and Mail article about it). In case you actually buy a copy of the book, here are a few reading tips that should help address your queries.

“Yes, supply and demand are abstractions. But, none the less, they do a pretty good job of explaining behaviour.”
See discussion from pg 18, starting: “In one sense, the law of supply and demand captures an obvious truth – if something is in demand, then it will usually attract a higher price (unless it’s something like digital music, which is easily copied and distributed for free). The problem arises when you decide to go Newtonian, express the principle in mathematical terms, and use it to prove optimality or make predictions ...”

“Economists welcome criticism.”
This is not my impression, or the impression of many of the “heterodox” economists discussed in the book (who are surely the best judges). See for example pg 164: “As the professor of gender and economic development Lourdes Benería notes: ‘Economics is a very hegemonic discipline, even though there are so many heterodox economists that protest this arrogance and this unwillingness to discuss criticisms.’”

“The Central Limit Theorem gives us some cover for the pervasive normality assumption.”
No, it doesn’t. See section starting pg 82: “Mathematical justification for the ubiquity of the normal distribution came with the so-called Central Limit Theorem ...”

“Knocking down straw men - some mythical economist who believes Econ 1000 is the literal truth - is not [cool].”
See pg 6, section starting: “[F]aced with the above list, most economists would protest that it is an over-simplified straw-man, and that economics is far more sophisticated than that ...”

“Given that one of the pioneers of behavioural economics, Daniel Kahneman, won the 2002 Nobel Memorial Prize in Economic Sciences, it is hard to argue that behavioural economics is not part of the mainstream.”
See discussion from pg 122, starting: “While Kahneman was eventually awarded the economics version of the Nobel Prize for his work (Tversky had died), the findings of behavioural economics have long been viewed suspiciously by the mainstream ...”

“He than brandishes his own specialty of numerically intensive complexity modeling that, in his view, clearly dominates what economists do.”
The book proposes alternative modelling techniques of the type used for example in systems biology, but one of the themes is the limitations of models of any kind. See for example pg 161, starting “Mathematical models are useful tools for simulating and understanding the economy, but they will never be able to accurately predict its course, or fully capture risk.” See also my book Apollo’s Arrow.

“Nobody who has taken the time to learn even a little about the state of modern economics would say that economists (with the exception of some die hard RBC types perhaps) believe that markets are efficient, always clear and the economy is always at equilibrium. How many Nobel's have been awarded for work addressing precisely these issues?”
This is discussed in the book, for example pg 170: “Of course, no economist would claim that the real economy is perfectly fair or stable, or that each participant has access to exactly the same information. In 2001, the Sveriges Riksbank Prize in Economic Sciences was awarded to George Akerlof, Michael Spence and Joseph Stiglitz ‘for their analyses of markets with asymmetric information’ ...”

“This lazy pseudo intellectual rubbish drives me nuts. It's the same kind of know-nothing garbage used by the climate change deniers and it's hugely damaging to any kind of intelligent discourse.”
Relax, it’s only a book you haven’t even read (and don’t you think it’s a little intellectually lazy to write off an entire book after reading an article and browsing a few pages on Google?). For the relationship between climate change and mainstream economics, see Chapter 8.

“Q for anyone that has read the book in question: Does Orrell ever state any institutional reasons for why economists believe and act in the manner he believes they think/act? Or does he just assume idiots self-select into economics?”
There is some discussion of this mostly in the introduction and final chapter.

“Why does [economic journalism] seem to be so much better south of the border?”
Do you mean like this recent article in Newsweek?
http://www.newsweek.com/2010/09/16/our-best-economic-minds-are-failing-us.html
In my opinion, economics has been given an easy ride by the media, at least until recently.

“What exactly is his view of complexity modelling? It seems like a form of complexity modeling or network theory would be useful for economic analysis, but it seems like this kind of project is easier said than done.”
See the last chapter, also: Systems economics: Overcoming the pitfalls of forecasting models via a multidisciplinary approach. D. Orrell and P. McSharry. International Journal of Forecasting, 25, 734-43, 2009. For some applications of network theory, see for example: Haldane, A. G (2009), 'Rethinking the Financial Network', Speech delivered at the Financial Student Association, Amsterdam, April 2009, available at http://www.bankofengland.co.uk/publications/speeches/2009/speech386.pdf. For complexity economics, there are some links at: http://www.postpythagorean.com/economyths_reading.html

“Around chapter 8 it seems as if there's an idea being developed of society as an organism (an idea that dates back to John A Hobson, but Orrell doesn't mention this).”
From my earlier book The Other Side of the Coin, p. 112: “Network science can give us insights into the structure and behaviour of society – and remind us, as Hobson wrote, that ‘humanity in all its various aggregations is a social stuff, and … whatever forms of coalescence it assumes, i.e., a nation, caste, church, party, etc., there will exist a genuinely organic unity … distinct from and dominant over the life and aim of its members.’”

“Honestly, you'd be better off reading Malcolm Gladwell.”
He is a fine populariser of science, though not known for his critiques of mainstream economics. But maybe that’s the attraction.

DO

[Stephen Gordon]

Thanks for stopping by. A couple of quick questions: have you run these ideas by economists, either in journals or a conferences? If so, what sort of feedback did you get? If not, why not?

[DO]

"A couple of quick questions: have you run these ideas by economists, either in journals or a conferences? If so, what sort of feedback did you get? If not, why not?"
Yes, I have spoken about these ideas at conferences, have co-authored research papers, and also get feedback from my books and articles (see http://www.postpythagorean.com/other.html). The response has been positive from heterodox economists and forecasters who are at the pointy ends of making predictions, but some people get surprisingly upset when you say that markets are not rational. The book wasn't written in a vacuum - a lot of people have similar criticisms of economics. See for example http://www.nature.com/nature/journal/v455/n7217/full/4551181a.html (Economics needs a scientific revolution). Or watch the interview with George Soros at http://ineteconomics.org/ ("[Economics] needs to be rethought from its fundamentals").
I've answered quite a few points there, so my parting request to followers of the blog is that you read some of this stuff with an open mind (and it's not in Gladwell!).

[Frances Woolley]

DO - thank you for contributing to the blog and for clarifying so many points.

As you might be aware, I have some heterodox credentials myself - you might have come across my 1993 Journal of Cambridge Economics piece while researching the gender chapter. So I'm not inherently hostile - I have a great deal of respect for the people you cite in the gender chapter (Julie Nelson, Paula England, Nancy Folbre, Lourdes Beneria).

The economics profession is changing rapidly - people entering today are more likely to have a background like yours than a thorough indoctrination in Chicago-type markets-are-efficient principles. In general one meets with indifference rather than hostility (looking up oneself in scholar.google.com is generally a quick exercise in humility).

But one thing hasn't changed: people still want to know "so what?" And this is where I'm still puzzled.

****After reading your book, what is it that someone like myself - someone who's already knowledgeable about feminist economics, behavioural economics, can explain in her sleep why markets may fail to achieve efficient outcomes, and even knows a little bit about the work of John A Hobson - will know that she didn't know before?***

[Just visiting from Macleans]

Entertaining.

The clash between published/peer reviewed stuff that next to no one reads, and books appealing to a wider audience with an argument (frankly, I didn't see what the big riff was all about earlier with other academics weighing in, and didn't feel inclined to comment - but now I do - hmmmm)

[DO]

****After reading your book, what is it that someone like myself - someone who's already knowledgeable about feminist economics, behavioural economics, can explain in her sleep why markets may fail to achieve efficient outcomes, and even knows a little bit about the work of John A Hobson - will know that she didn't know before?***

I don't know. Try section starting pg 1, ending pg 280.

[Stephen Gordon]

Have a review copy sent to us.

[Just visiting from Macleans]

I see on his facebook page http://www.facebook.com/Economyths DO links to a recent Newsweek article (circ approx 2 million) that appears to me to have similar arguments, and incorporates similar criticisms from real live economists.

Our Best Minds Are Failing Us
With America in deep trouble, our economists are AWOL, and our scientists are still off ‘financial engineering.’

http://www.newsweek.com/2010/09/16/our-best-economic-minds-are-failing-us.html

Any rebuttal to this article?

[Mike Moffatt]

Well, for one thing, I take umbrage to the idea that the best economics minds are in *macro*.

[Frances Woolley]

DO "I don't know. Try section starting pg 1, ending pg 280."

There's at least dozen things competing for my eyeballs today and every day. I don't read anything unless I know what I'm going to get out of it - perhaps information, perhaps joy, perhaps catharsis, but there has to be some clear expectation of gain.

[Just visiting from Macleans]

Well, for one thing, I take umbrage to the idea that the best economics minds are in *macro*.

I agree. From my perspective, they are micro. :)

[DO]

"There's at least dozen things competing for my eyeballs today and every day."
Like what – "running regressions"? We know what won that contest :)

"DO links to a recent Newsweek article (circ approx 2 million) that appears to me to have similar arguments, and incorporates similar criticisms from real live economists ... Any rebuttal to this article?"

Further to the Newsweek article, I should point out that most of the sources for the article (who were also sources for Economyths) are not "real economists" in the traditionally-understood sense.

Philip Mirowski is a philosopher and historian of economic thought. See his critique of neoclassical economics: More Heat than Light: Economics as Social Physics, Physics as Nature's Economics.

J. Doyne Farmer is not an economist but a physicist and a pioneer of chaos theory. He also co-founded Prediction Company, which is a successful financial forecasting firm.

The Institute for New Economic Thinking, mentioned in the piece, was set up last year by George Soros, who is famously skeptical of mainstream economic theory. A good place to get an idea of what INET is about is this video: http://ineteconomics.org/sites/default/files/media_files/players/INETVideoPlayerAlone.swf?startingVideo=0DL7aFbsD-A

Andrew Lo from MIT is an economist, but has always been well outside the mainstream. See his book A Non-Random Walk Down Wall Street.

[Adam P]

DO, you really think Andrew Lo is outside the mainstream, or that a non-random walk is an against the mainstream book?

someone this ignorant of what the economics profession actually does shouldn't be critiquing it. this is about on the level of me critiquing your wardrobe even though I have no idea what's in it.

[Stephen Gordon]

Good lord. DO, if you're trying to persuade economists that you've written something worth reading, you're not doing a very good job of it. Throw us a bone. An idea. Something.

[Adam P]

Stephen, I suspect that perhaps (I'm guessing) DO believes that the random walk hypothesis is somehow evivalent to or implied by the EMH (which would explain why he thinks Lo's book is outside the mainstream).

If so that's a pretty fundamental ignorance of elementary theory.

[vimothy]

I fancy he's not nice to his mother either.

If so that's a pretty fundamental ignorance of proper behaviour.

AND I just imagined him being cruel to animals.

[Just visiting from Macleans]

This is a typical "shoot the messenger" strategy first started by FW (who admittedly never read the book) and since embraced by AP, SG and others with a vested interest. I've seen it myself, firsthand.

So, the latest version surrounds Andrew Lo's economics creds. Why is this relevant?

I went back to the Newsweek article, and what precisely did A Lo state? Here's the only reference I can find:

Recently, the National Science Foundation sent out a query asking economists and social scientists to draw up “grand challenge questions that are both foundational and transformative”—a request that one recipient, Andrew Lo, a highly regarded financial economist at MIT, says is a first in his experience.

So, who cares whether A Lo is mainstream, or non mainstream?

AP, SG: What say you to the Newsweek article/criticism? Throw me a bone.

[Adam P]

Whether A Lo is or isn't mainstream is completely irrelevant. Whether DO can tell the difference is very relevant.

[Stephen Gordon]

And I'm not selling anything.

[Frances Woolley]

I haven't been contributing much to this discussion because, honestly, I can't see the point.

There are thousands of economists in this world.

Some do useless work. Some do worse than useless work.

Some economists do great work some of which (I think) makes the world a better place - e.g. the group of dedicated academic economists and environmentalists in BC who lobbied hard for a carbon tax.

Life is too short to spend it worrying about useless (but mostly harmless) economics.

As for the worse than useless - i.e. actively harmful economics - yes, by all means, do something about it. Something effective - like getting ideas out where they're likely to be read, lobbying and campaigning. Something constructive - like providing an alternative (and feasible) solution to some of the problems the world faces.

But criticizing what others have done without providing an alternative - why should I care? There's some law that someone posted a link to on this blog a month or three ago that says 90% of everything is garbage. Including mainstream economics. Including heterodox economics.

So why worry about it?

[Just visiting from Macleans]

But criticizing what others have done without providing an alternative - why should I care?...

So why worry about it?

Here's one example of why:

I heard this NY Times reporter on the CBC over four years ago.
http://www.youtube.com/watch?v=K0DUJBAK8gI

I sent out the clip to a number of reporters/columnists. One G&M columnist followed up on it (as well as a number of related columns). He was probably the first in Canada on a national level. Note the reference in the first paragraph of this ROB mag article:

http://www.theglobeandmail.com/report-on-business/rob-magazine/a-lost-cause/article165015/

James Cameron's well covered tour and pressers yesterday just shows how far the public discourse has evolved since then. Clifford Kraus, NYT reporter deserves some credit for originally not stating "Why should I care?"

[Frances Woolley]

JVFM: "As for the worse than useless - i.e. actively harmful economics - yes, by all means, do something about it. Something effective - like getting ideas out where they're likely to be read, lobbying and campaigning."

Your comment shows that yes, it is possible to do something effective - and better yet, is a "how to" on getting ideas out there.