Why "culture" is a lousy explanation

In China, there are 6 boys born for every 5 girls; the result of an age old preference for sons combined with widespread use of sex selection technology.

It's tempting to ascribe son preference to culture and leave it at that. However, for an economist, "culture" is a lousy explanation. It has no only trivial predictive value. Will the preference for sons persist over time, or will it gradually fade away? Cultural explanations cannot say: culture simply is what it is. 

Another problem with "culture" is that it can explain anything. People in Uttar Pradesh select for sons?" It must be their culture. People in Kerala don't select for sons?" It must be their culture. Since "culture" is compatible with any conceivable set of facts, it is not falsifiable.   

From a scientific standpoint, theories that can, potentially, be proved to be false are the best type of theories. Why? It's impossible to prove that any theory about the world is true. For example, once upon a time, Europeans had a theory: "All swans are white".  They believed it was true, because they had observed thousands of swans, and all of them were white. But, of course, it wasn't, as the Europeans discovered when they went to Australia.

Since we can never prove our theories to be true, the best we can do is develop theories with testable predictions, and test them. Try as hard as we possibly can to show that the theory is false. If the theory stands up to all of our tests, then we accept it - for now. 

"Culture" as an explanation also violates what Eric Crampton calls "the first rule of the microeconomists club": methodological individualism. A good economic explanation starts with the choices of individual rational actors. It begins with the premise that people are, fundamentally, all alike - we want social status, reproductive success (or sex, anyways), economic security. What looks like differences in tastes are, in fact, differences in ways of achieving those fundamental goals that we all share.

For example, in the 1960s, children begged to have Hostess Twinkies in their lunches, because in a world where most moms stayed at home and baked, bought goods were scarce and hard to come buy, hence were a high status item. Now, children beg for home made cookies in their lunch, because in a world where most parents are too busy to bake, home made cookies are scarce and thus high status. 

Methodological individualism states that the best economic stories explain the world in terms of the choices of individual rational actors, constrained by prices and incomes. Becker and Stigler's article De gustibus non est disputandum is a forceful statement of this position:

On the traditional view [what I am calling here "cultural explanations"], an explanation of economic phenomena that reaches a difference in tastes between people or times is the terminus of the argument: the problem is abandoned at this point to whoever studies and explains tastes (psychologists? anthropologists? phrenologists? sociobiologists?). On our preferred interpretation, one never reaches this impasse: the economist continues to search for differences in prices or incomes to explain any differences or changes in behavior.

The Becker-Stigler view does not imply that culture or preferences are unimportant. Rather, it is rallying cry for economic imperialists, a call for economists to take culture, preferences, and all of the other phenomena ignored by previous generations, and explain them using the tools of rational choice theory.

According to this approach, "culture" is the beginning of an explanation, not the end. Why is there son preference is some places and not in others? What are the advantages and disadvantages, the costs and benefits, of sons? How can son preference persist? 

The phrase methodological individualism isn't used much these days - it doesn't even have a half-decent wikipedia entry. I don't think this is because the early critics of methodological individualism, such as Kenneth Arrow, won the day. Rather, I think it's a combination of factors. Methodology - what some would call ideology - gets little time in the economics curriculum. In judging the quality of research, technique -- identifying variation, nifty econometrics -- are more important than methodological purity. Behavioural economics came along, and was able to explain phenomena that the old-school Chicago approach couldn't.

That economics is more open to alternative types of explanation than it was 20 or 30 years ago is a good thing. Still, it behooves anyone contemplating a career in economics to know what counts as a good explanation, and why.

Comments

[Stephen Gordon]

You had me at the title. Great stuff.

[Frances Woolley]

Stephen - thanks! This has been building for a while...

[Mandos]

An extremely superficial view of what other people mean by "culture" in order to demand the primacy of a methological individualism that is failing the world as we speak.

[RPLong]

Wow. Excellently written. Thanks for that.

[Wonks Anonymous]

John Derbyshire has quoted an anonymous biologist friend of his saying "Culture? What does that mean? Where does it come from? What are the upstream variables?", which sounds like just the argument for further reductionism promoted here. However, Derbyshire was attempting to argue against the methodological individualist assumption that people are the same with merely different circumstances.

[Gene Callahan]

Methodological individualism perhaps has faded because it is obviously false? And what Mandos says above is to the point as well.

[Stephen Gordon]

That's three content-free dissenting comments. How many more?

[Mandos]

That's three content-free dissenting comments. How many more?

The problem is that the OP sets out the terms in a kind of an unfalsifiable way. What evidence would you accept that there is more to culture than the incentives that can be analyzed by methodological individualism? Aside from, you know, all the fields of study that exist to study culture without submitting to economism?

[Vladimir]

"Why is there son preference is some places and not in others? What are the advantages and disadvantages, the costs and benefits, of sons? How can son preference persist? "
This is in essence the political economy approach to social inquiry and is hardly underrepresented. Indeed in my reading of American poli sci lit, methodological individualism and the rational actor model colonized the field long ago. One sees a divergence from the Europeans who especially in international relations and comparative politics are loathe to use micro economic methods (with the exceptions of quants studying conflict). I won't say culture is the reason, most likely funding. Interestingly , Marxists won't say culture but class interests and generally won't resort to methodological individualism for obvious ideological/methodological reasons. Yet they do seem to have insights about the kinds of questions raised here.

Frances, what about economics specifically teaches us that people will want what is scarce. I understand the link between scarcity and status but it is only particular scarce things which confer social status. There is a whole social theory around food (I admit I haven't gotten around to reading Pierre Bourdieau on the subject) I mean is it the mother who bakes cookies who gets the status as well as the kid? Does this signal that she's a good mother and these are good kids and is there a benefit to either? Or are we talking about motherhood as a set of social practices. You might have pointed out that people who don't cook now demand "magazine quality" kitchens. Sometimes ethnographic explanations are so much richer. What would sounds "truer" to Nick, the Taylor Rule or a participant observer study of how monetary policy is made at the Bank of Canada?

[Nick Rowe]

I think there's a difference between:

1. Fred goes to the pub because he's English and the English have a culture of pub-going.

2. The English go to the pub because the English have a culture of pub-going.

1 has some sort of content. 2 reminds me of something Moliere(?) said about opium.

[Mandos]

.

Frances, what about economics specifically teaches us that people will want what is scarce. I understand the link between scarcity and status but it is only particular scarce things which confer social status. There is a whole social theory around food (I admit I haven't gotten around to reading Pierre Bourdieau on the subject) I mean is it the mother who bakes cookies who gets the status as well as the kid? Does this signal that she's a good mother and these are good kids and is there a benefit to either? Or are we talking about motherhood as a set of social practices. You might have pointed out that people who don't cook now demand "magazine quality" kitchens. Sometimes ethnographic explanations are so much richer. What would sounds "truer" to Nick, the Taylor Rule or a participant observer study of how monetary policy is made at the Bank of Canada?

I would go even further, and say that many things which economists seem to feel lie within their official ambit, do not. For instance, tuition fees.

[Bob Smith]

"It's tempting to ascribe son preference to culture and leave it at that. However, for an economist, "culture" is a lousy explanation. It has no predictive value."

Whoa, hold on there, let's step away from the edge. I think we have to think about the level at which we're seeking an explanation.

Son preference for why people have sons is a lousy explanation, not because it has no predictive value - it clearly does - but because it's a trivial one. A more interestly (or, these days at least, more politically charged) hypothesis might wehter the migration of cultural groups with a son preference to Canada, has caused an increase in the number of abortions of female fetuses (to pick a topic from today's headlines), which hypothesis can be handily proven or disproven (or could be if Canadian politicians were capable of having mature discussions of complicated issues).

Now, it is fair to say that on one level "culture" isn't a fundamental explanation of the world, it's not irreducible, in that we can look behind it to look at the factors that create that "culture". You can certainly look behind the "son preference". But that isn't the same as saying that it has no predictive value. That's like saying that lighting as an explanation for thunder has no predictive value because you can't explain what causes lighting. True, but I can explain what causes thunder.

That said, culture as an explanation isn't inconsistent with the premise that "people are, fundamentally, all alike - we want social status, reproductive success, economic security". Rather the relationship between those human fundamentals and culture is likely a reciprical one. Cultures shape what we mean by social status ("My son, the Rabbi" probably won't get you very far in Egypt these days), reproductive success ("It's a boy!"), economic security (40 acres and a mule vs. a lamborghini). But, in turn, culture is shaped by those factors as prices and incomes change (the shift in preferences between being fat and pale vs. being thin and tanned over the past few centuries is daily example of that - 300 years ago I'd be a supermodel). But while cultures can shift over time, individuals at any particular moment in time take them as given. In that sense, culture is a very real fundamental explanation for their behaviour.

[whitfit]

Vladimir says: "There is a whole social theory around food (I admit I haven't gotten around to reading Pierre Bourdieau on the subject) I mean is it the mother who bakes cookies who gets the status as well as the kid?"

I read Bourdieau's "Social Structures of the Economy" and it was a bunch of banal observations about the world with some half baked theories attached. I could have just as easily written it, though I couldn't have complicated the language as much - there was no insight there, and the "theories" are random, in that there is no way of falsifying or supporting them beyond instinct. My point is that the literary observation type of work (which seems to underpin the Continental school and much of that kind of philosophy) seems totally irrelevant to me. It doesn't explain anything - it is just a conversation about culture and the world that holds no more insights than your average bar conversation, but instead in overwrought language that makes it inaccessible and therefore not very useful or interesting even as conversation.

I like Bob Smith's criticism better - although, I disagree with the lightning analogy - the only way to measure for a son preference (explained by culture) is to find a son preference. It is not predictive because you have to find it first before you can use it to predict anything, which in the end is only itself. On the other hand, lightning and thunder are two distinct phenomenon. One follows the other, but if you find thunder, it is not the only way to find lightning.

[srini]

Meanwhile, real scientists--as opposed to Beckeresque armchair theoreticians of family economics--are finding that culture may shape cognition and how we perceive the world:

http://www.psmag.com/magazines/pacific-standard-cover-story/joe-henrich-weird-ultimatum-game-shaking-up-psychology-economics-53135/

It takes enormous hubris to assume that whole swathes of research can be dismissed by a clever economist spending 5 minutes.

[Frances Woolley]

Bob Smith - "Son preference for why people have sons is a lousy explanation...because it's a trivial one"

Agreed, that's a good point.

By the way, have you read Anonymous Lawyer? You might enjoy it.

Mandos, Gene: "Methodological individualism perhaps has faded because it is obviously false"

Methodological individualism that shuts its eyes to the many ways in which people depart from rationality every day - e.g. through framing effects, anchoring effects, salience, overconfidence, you name it - is unhelpful. Methodological individualism that seeks only to justify the world as it is - "what ever is, is right" - is intellectually uninteresting.

But to my mind the greatest insight to be gained from studying economics is that *people have choices*. People may have lousy choices, and live highly constrained and circumscribed lives. But everywhere, always, they do the best they can for themselves and their families. That's not obviously false. That's empowering and potentially revolutionary.

[Frances Woolley]

Vladimir: "This is in essence the political economy approach to social inquiry and is hardly underrepresented."

Yup, the typical PhD student in IR or Political Science or Sociology wouldn't need to read this post. They would be completely familiar with methodological debates and the arguments for/against methodological individualism. Poli Sci is a multi-paradigmatic discipline, and so people talk about these things there. Economics, on the other hand, is mono-paradigmatic. What's that expression - fish don't see the water they swim in? We don't talk about these things. Many economics PhD students will never have heard of methodological individualism or falsifiability. That's why I needed to write this post.

And, yes, I definitely find much more to read in the American Political Science Review (or whatever the poli sci equivalent of the AER is called) than the English-school IR scholars that I know!

"Sometimes ethnographic explanations are so much richer. What would sounds "truer" to Nick, the Taylor Rule or a participant observer study of how monetary policy is made at the Bank of Canada?"

Ethnographic explanations are not at all incompatible with the basic thesis I'm advancing in this post, i.e. that culture needs to be explained. In the lecture on son preference that I'm giving tomorrow, I'm including a bunch of quotes from a sociological study of Indian women who are living in America. They talk about the pressure from husbands and mother-in-laws, and the increase in status that a woman experiences when she has sons. Mukesh Eswaran at UBC has some really neat research where he uses the presence/absence of the mother-in-law to explain women's health outcomes in India (or possibly Bangladesh, I'm not sure).

About Nick/participant observation/Taylor rule: Never ask questions like that - Nick is highly unpredictable, and you might not like the answer!

[Frances Woolley]

Srini "Meanwhile, real scientists--as opposed to Beckeresque armchair theoreticians of family economics--are finding that culture may shape cognition and how we perceive the world"

This is why, in the post, I wrote: "Behavioural economics came along, and was able to explain phenomena that the old-school Chicago approach couldn't."

There is a difference between understanding a set of methodological prescriptions and following them blindly. This post is about the former not the later.

[Frances Woolley]

Nick: "1. Fred goes to the pub because he's English and the English have a culture of pub-going."

I agree with you that (1) is better than (2) and that the two statements are different. But because some people are still unconvinced about the value of methodological individualism, let's take it a little further.

In England right now X, where X is a surprisingly large number, of pubs are closing each week. No one that I talked to about this when I was over there recently would accept "the English no longer have a culture of pub-going" as an explanation (and, yes, I did have this conversation with people). What kind of explanations came up? Off-licences are open long hours and the beer there is really cheap. There's a lot more on TV than there used to be back in the four-channel era. Unemployment is remaining high. The population is aging. Females have relatively more economic power and pub culture is less attractive to women. Etc, etc.

[paulie]

Well done. I love it when economists stray into philosophy because, being reality based, they generally produce some useful knowledge. Compare this with philosophers discussing economics, which seems more common (or maybe it's just my school). It's like watching baseball players fight - just kind of embarrassing for everyone.

[Kuri]

A good economic explanation starts with the choices of individual rational actors. It begins with the premise that people are, fundamentally, all alike - we want social status, reproductive success, economic security.

Well, not really. I, as a single data point in the category of human beings (and I believe myself to be rational in the colloquial sense of the word, most days), do not desire reproductive success. In fact, I take a pill everyday for the purpose of ensuring against reproductive success and I plan to continue doing so until menopause renders them unnecessary. If a theory is based on the premise that all human beings are alike, then it should be pretty damn careful about what the premise claims as universal.

Which goes to the problem I have with your post. Of course "culture" as an explanation is lousy. Just as "science" as an explanation is lousy if not backed up by some data. But speak of culture by referring to history, materials and geography and you certainly do have a line of data that can predict (albeit not perfectly) whether a given cultural phenomenon will persist. For example, we can observe that in China, the preference for sons is much greater in rural areas than it is in urban ones. That leads to investigations of what is different between urban and rural China and which of those differences bears a logical relationship with a preference for sons in children. This isn't just saying the word "culture" and leaving it there - it's the beginning of an investigation, some of which may lead to material incentives or disincentives but certainly not all of it. If someone were to just throw up the word "science" as an explanation with no tests or data, it would be similarly unsatisfying. Which is a lengthy way of saying what I believe Mandos is getting at when he spoke of a superficial view of what people mean when they say culture.

[Frances Woolley]

Kuri - fair enough on the reproductive success. And, yes, that sentence dismisses oh, say, entire schools of feminist thought, like difference feminism.

But I think we have much in common. I agree with the approach that you advocate: "This isn't just saying the word "culture" and leaving it there - it's the beginning of an investigation, some of which may lead to material incentives or disincentives but certainly not all of it" The "not all of it" may simply be things we can't explain given the state of knowledge we have at present, e.g. the structure of institutions.

The point of the post is to explain what methodological individualism is, because lots of people don't know, especially within economics (how many don't know I'll find out in class tomorrow). It is not to advocate a hard-core Becker/Stiglitz perspective. Though, yes, that wasn't as clear as it could have been.

paulie - I'll take that at face value as a compliment!

[Bob Smith]

By the way, have you read Anonymous Lawyer?

I do. Everything he writes is true.

[Frances Woolley]

Haven't read the blog, just finished the book - enough to put anyone think twice about large firm life!

[Bob Smith]

Too bad he stopped writing in 2009, by all accounts the goings on south of the border since then are almost impossible to parody. The Abovethelaw blog does a gangbuster business chronicling the absudities of the legal profession (and, in recent years, has been going to town on legal academia).

[Declan]

Thats Becker and STIGLER - I don't know how happy Stiglitz would be with their views!

[Frances Woolley]

Declan - Urgh! If only the anti-Chicago types earlier in the comments had spotted that, they'd have known I wasn't a genuine Chicago person.

[Ken Schulz]

Prof. Woolley, you need to give this some more thought. When I studied psychology as an undergraduate and graduate student, we actually spent time talking about the water we try to swim in; besides falsificationism, a favorite topic was P.W. Bridgeman's operationalism. (That is, defining a phenomenon by detailing the operations one must perform in order to observe it.) If you try to operationalize the terms of your explanation of home-baked cookie preferences in a way that it could be empirically tested, or could predict other lunch (or clothing, or accessory) choices of children, I think you will see how much more work would need doing to bring it to a level that can be called scientific explanation. The fact that the scarcity/status story sounds plausible to many people is in no way evidence, it is hardly different from the 'culture' story in that regard

[Gene Callahan]

"On the other hand, lightning and thunder are two distinct phenomenon."

Wow, no: thunder and lightening are just the audible and visible aspects of the exact same happening.

[Daphne Millar]

My understanding is that the convention in China is that sons are responsible for the welfare of their parents in later life; daughters are responsible for the parents of their husbands.
If true, this would make a preference for sons entirely rational. What is the point of having a brilliant daughter who passes exams and makes lots of money for your in-laws? Even a mediocre son is a better bet than that.
Is this "culture?" It certainly depends on cultural norms. But they are refracted through a very hard-headed view of life in old age.
Fortunately, the surplus of women and the fact that women often do better means that those who do not show sex bias are increasingly being rewarded with well-paid daughters who do not have to throw their money away on a mother-in-law who constantly criticises them.

[Chris Naden]

I'm a lot more inclined to buy a culture = metaconsciousness construction than any other (Pratchett describes it as a place to store the things children don't know yet).

In harsh environments, which in Britain includes any environment prior to or within ten years of the founding of the NHS, babies die and male babies die easier. That's been true for a while. It strikes me as relatively natural that an apparent (how hard is data? 5:6 is more or less parity, not a big differential to play with) son preference which shows up in a lot of places but with greatly varying intensity relates to the historical fragility of babies in that area. In areas where more male babies die, male *births* are highly prized, as each improves the overall statistical likelihood of achieving a male adult.

[H Goddard]

"Why "culture" is a lousy explanation"

On the basis on what examination of the literature in anthropology and sociology do you come to this conclusion?

[genauer]

btw, as somebody who has worked in a 400k people company, and enjoyed it most of the time,

I would like to point out, that this is about a "large" lawyer group : - )

[Frances Woolley]

Ken Schulz "Prof. Woolley, you need to give this some more thought."

Ken - you need to read the post more carefully. In the post I describe a position. Yes, there are limitations to methodological individualism. I say that in the last couple of paras. However it is extremely useful for a practicing economist to know what methodological individualism is, and to strive for material explanations of phenomena.

H Goddard "On the basis on what examination of the literature in anthropology and sociology"

No self-respecting sociologist takes culture as an unexamined given, or say "it's culture" and stops there. She or he would talk to people, observe people, see what the culture meant to them, how it shaped their lives.

Daphne: "If true, this would make a preference for sons entirely rational"

Certainly that's part of the story. The Becker/Stigler economic imperialist agenda does not say that culture is irrelevant, rather that culture needs to be explained.

Chris Naden, that counts as an explanation that satisfies the rules of methodological individualism i.e. explaining cultural son preference as a rational individual choice.

[Larry Willmore]

Great post, Frances. It was the Austrian philosopher Karl Popper (1902-1994) who famously defined science as the search for falsification of received hypotheses. There is more on this at http://larrywillmore.net/blog/2013/03/28/culture-and-scientific-discovery/

[Min]

It is true that culture is a lousy explanation. OTOH, as has been pointed out, culture matters. I have long been a critic of the assumption in psychology that experiments on college sophomores in the West generalize to all adult humans. Culture matters. At the same time, the methodology of those experiments is not able to explain cultural differences. On top of that, there is a discipline, anthropology, that actually studies culture. Any psychologist who ventures into cultural questions without regard to the existing body of knowledge and methodologies is simply arrogant. (Consider Freud, for example.) Not that disciplines cannot fruitfully learn from each other. But to do interdisciplinary research without an interdisciplinary team is difficult. To put it simply, you don't know what you don't know.

[eveningperson]

"For example, in the 1960s, children begged to have Hostess Twinkies in their lunches, because in a world where most moms stayed at home and baked, bought goods were scarce and hard to come buy, hence were a high status item. Now, children beg for home made cookies in their lunch, because in a world where most parents are too busy to bake, home made cookies are scarce and thus high status. "

Fair enough, that's an economist's, individualistic, actor-centred explanation (the 'rational' is redundant, for reasons I'd go into separately).

Now, why are the scarce items high status and the common ones not? Something to do with the fact that people in a group tend to think this. It certainly is not an intrinsic property of scarcity. In fact, the notion of 'status' probably would not arise without a group. We can't understand the child's behaviour without considering the interactions of 'the group'. Is this not a 'cultural explanation'? And if not, why not?

I don't doubt there are further layers of explanation as to why people think this way in a group, and they may be more reductionist, but that doesn't make the cultural explanation invalid at a particular level.

Furthermore, never trust an economist. Is his explanation a testable hypothesis or is it just a glib just-so story in the freakanomics tradition?

Even furthermore, is the phenomenon even real, or is it just like some of the 'evidence' produced by some economists in denying anthropogenic global warming? (I've clearly been reading too many economists 'contributing' to other fields.)

[Min]

Minor point:

whitfit: "On the other hand, lightning and thunder are two distinct phenomenon."

Gene Callahan: "Wow, no: thunder and lightening are just the audible and visible aspects of the exact same happening."

Well, there is a certain ambiguity to the term, "phenomenon". However, the sensory difference between thunder and lightning is enough to state that they are distinct phenomena. It is a -- ahem --, phenomenological difference. Second, it is quite possible to have lightning in a vacuum. Such lightning will not produce thunder. Yes, lightning produces thunder, not the other way around. Nor are they simply aspects of the same thing.

[Min]

Let me be provocative.

Confidence is not an explanation. it is perhaps less of an explanation that culture, because cultural norms are studied and described independently of the economic questions that lead to them. Confidence (or the lack thereof) as an explanation appears to be something that is invoked ad hoc. And confidence has been invoked as an economic explanation for many decades. Where is the economic theory of confidence? (Maybe I am just ignorant. But where?)

[Frances Woolley]

Min "Confidence is not an explanation."

Yup, this is why us micro folks secretly despise macro types, despite their higher salaries and lush conferences and better job prospects and happy students and "relevant" research. Confidence fairies - along with much of modern macroeconomics - violate methodological individualism.

eveningperson "Now, why are the scarce items high status and the common ones not?"

Status is basically a form of signal. Something has to be scarce to have signalling value. To be more precise, the good must be costly to produce, and the cost of producing the good must be a decreasing function of ability for the good to be a signal of ability. Dr Seuss's The Sneetches is the classic reference.

I agree with you about the dangers of just-so stories - "whatever is, is right." But "culture" - as an unexamined, unstudied, unquestioned explanation - isn't even a story, it's a cop-out.

[Brad]

I think it's dangerous to be too dismissive of culture, and I think the title of the post might fall into this trap. Even if we restrict ourselves to methodological individualism, we have to recognize that individuals make choices based on their social environment. The side of the road we drive on is arbitrary, but it is important to coordinate. Many languages allow communication, but life is easiest if you speak the local one. There are many ways to cloth ourselves, but you might attract unwanted attention if you deviate from local custom. I would argue that you could define a culture as a particular equilibrium in a very complex coordination game. It's not easy for any one individual to deviate, so these equilibria can be very stable, even lasting many generations. But at the end of the day, there might not be any more explanation than the fact that we had to coordinate on something, and history brought us here. We can trace that history back, and we can examine how the equilibrium is maintained, but if we attempt to examine an individual in isolation, or a society without history, we are going to have a lot of trouble making sense of the world.

[Kaleberg]

Another problem with "culture" is that it can explain anything. People in France speak French? "It must be their culture." People in Germany speak German? "It must be their culture." Since "culture" is compatible with any conceivable set of facts, it is not falsifiable.

If linguistics were as bogus as economics, I'm sure some energetic linguist would be offering a properly falsifiable explanation.

Any evolutionary biologist could have pointed out the importance of contingency by now. Sometimes it's just a matter of chance and history. The field is full of papers like The Spandrels of San Marco, though my favorite is Why Are Juveniles Smaller Than Their Parents? [Ellstrand - Evolution 12/82]. (I was always a sucker for satire.)

I think modern economists avoid the idea of contingency, because it blows a planet sized hole in their theories of meritocracy and efficiency which are first and foremost apologies for the evils of the existing social order. Given the myriad stable equilibria of the socio-economic equations, economists have no choice but to reject contingency, lest they invalidate the claims of their patrons.

[Jim Harrison]

After 2008 economists should be prohibited from claiming that they are reality based for at least fifty years.

[Frances Woolley]

Brad " I would argue that you could define a culture as a particular equilibrium in a very complex coordination game." -

Yup, and given that the equilibrium is dependent upon everything has happened previously in that game, and the game is so complex, the temptation to black box it all and call it "culture" is irresistible.

Jim Harrison - whoa, not all economics has to do with financial markets/money/macro.

[rsj]

Is this complaint about marketing or substance?

What are some examples of economic models introduced, say, after 1970, that have been falsified by the data?

Which models have been validated by the data?

I am squinting and squinting but I can't see any difference in rigor or falsifiability between any of the social sciences.

There are experiments of some form conducted in all of them.

If I am wrong, make a case with some data about economists being more ready to abandon models/beliefs when presented with evidence to the contrary, rather than making a "cultural" argument.

[Ken Schulz]

Frances (since apparently we're on a first-name basis now) -

Well, I had read the OP several times, and I've reread it a few more, and now I think you somewhat contradict yourself. At first, "From a scientific standpoint, theories that can, potentially, be proved to be false are the best type of theories." I concur strongly. Then later, "Methodological individualism states that the best economic stories explain the world in terms of the choices of individual rational actors, constrained by prices and incomes." Can they both be best? As you say, you do walk back that second claim a bit. I would allow that MI could be a rule of thumb, or a guide to hypothesis formation, but never a standard.
Speaking of which, I've enjoyed many of your posts; I don't think this one is up to your usual standard.
Some of my issues with the Twinkie example were expressed more explicitly by eveningperson. I'm puzzled by your reply, which introduced several more undefined terms not in the original example, namely, 'signalling' and 'ability'. You also offer "Status is basically a form of signal." This seems quite at odds with ordinary usage: I can signal, but status must be conferred by others. It is OK for a science to use terms in special ways, but special care must be taken - for example, the use of operational definition...

[Min]

Frances Woolley: "I agree with you about the dangers of just-so stories - "whatever is, is right." But "culture" - as an unexamined, unstudied, unquestioned explanation - isn't even a story, it's a cop-out."

Who says that culture is unexamined, unstudied, and unquestioned? That is really an arrogant assertion.

[eveningperson]

One of my correspondents on the other side of the Atlantic from me points out that from his own childhood in the 50s, 'Hostess Twinkies were far from "scarce", and easily affordable to families of modest means such as my own.'

So this article is like a fart in a lift: wrong on so many levels.

It does raise important points, though. It came to my notice through the Critical Cafe Yahoo group where I'm planning posts on related matters.

[Min]

"In China, there are 6 boys born for every 5 girls; the result of an age old preference for sons combined with widespread use of sex selection technology.

"It's tempting to ascribe son preference to culture and leave it at that. However, for an economist, "culture" is a lousy explanation. It has no only trivial predictive value. Will the preference for sons persist over time, or will it gradually fade away? Cultural explanations cannot say: culture simply is what it is."

Much the same can be said of evolution as an explanation. It has only trivial predictive value. In fiction, humans of the future will have evolved to be superior to us. But that is only fantasy. Evolution does not work that way. We cannot predict the next step in the evolution of any species. Species just are what they are. Who could have predicted the evolution of the Heike Crab? But it is what it is. (We can predict that bacteria will develop resistance to antibiotics. But that is trivial. ;))

"A good economic explanation starts with the choices of individual rational actors. It begins with the premise that people are, fundamentally, all alike - we want social status, reproductive success (or sex, anyways), economic security."

OK. If people are all alike, always and everywhere, then economic explanations will be even less able to predict social and cultural change. Why should people not continue to make the same choices? OC, as the non-social environment changes, we may be able to predict certain changes, as we do for bacteria. But that's also trivial. ;))

[Mandos]

Mandos, Gene: "Methodological individualism perhaps has faded because it is obviously false"

Methodological individualism that shuts its eyes to the many ways in which people depart from rationality every day - e.g. through framing effects, anchoring effects, salience, overconfidence, you name it - is unhelpful. Methodological individualism that seeks only to justify the world as it is - "what ever is, is right" - is intellectually uninteresting.

But to my mind the greatest insight to be gained from studying economics is that *people have choices*. People may have lousy choices, and live highly constrained and circumscribed lives. But everywhere, always, they do the best they can for themselves and their families. That's not obviously false. That's empowering and potentially revolutionary.

Wow. Just wow. To me, this is the clearest admission that I've seen so far as to the non-ideological-neutrality of the modern profession of economics as a whole.

I dunno if y'all can see it, but the narrow focus on "what choices people have given what circumscribes those choices" also limits your view what the problems are and what can/should be done about them. It sets up the particular framing of "means vs ends" that is so frustrating to those of us critics of economism as an ideological exercise. It sets up the world in which right-wing libertarianism comfortably claims the mantle of economic rectitude, regardless of how many personally left-leaning economics professionals you point out---because they understand viscerally, apparently, the true meaning of the above commitment you made.

The language of "empowerment" prevents us from seeing how, at the meta level, the "lousy choices" and the "highly constrained and circumscribed lives" interact and reinforce one another. This is why I mentioned tuition fees above, a recurring theme on this blog. In a world where access to education is not part of our culture of rights, the cultural concept (not the amount, not who pays for what when, etc) of tuition fees circumscribes the possibility of political equality. How people behave knowing what they can afford is besides the point.

[Frances Woolley]

Mandos: " also limits your view what the problems are and what can/should be done about them."

Think about, for example, micro-finance initiatives. They started out when people started looking at household budgets and trying to work out: what is keeping people poor? What is limiting opportunities? That led to real action the problem of poverty.

A culture of rights can be used as a way to improve people's lives -think e.g. of the work of Sen and Nussbaum - but there is always this peril.

[Frances Woolley]

Mandos - every country I know that has, or has had, very low or no tuition fees also had small post-secondary sectors, that were very difficult to get into, and where the wealthy and/or politically powerful were able to get their offspring free university places.

[Mandos]

Mandos - every country I know that has, or has had, very low or no tuition fees also had small post-secondary sectors, that were very difficult to get into, and where the wealthy and/or politically powerful were able to get their offspring free university places.

But these countries---the developed ones, at least---also tend to have flatter income distributions and more access to middle-class lifestyles for people that don't get into higher-ed. Or they used to until recently. In the limit, university educations simply become another choice for those inclined.

[Mandos]

I mean, contrast this to the usual bête noire, the USA and its enormous student debt bubble that apparently now rivals credit card debt...without the possibility of default.

[Frances Woolley]

Min:
"Who says that culture is unexamined, unstudied, and unquestioned? "

There are people who examine, study and question culture. And there are people who say "it's culture" and leave it at that. This post is directed towards the latter group, not the former.

"Much the same can be said of evolution as an explanation. It has only trivial predictive value."

No, that's overly dismissive - take a look at the modern literature on evolutionary biology.

Evolution has a great deal in common with rational choice theory, only it's genes maximizing reproductive success rather than firms maximizing profits or individuals maximizing utility. Both can be used to tell "just so stories", justifying the status quo. But they don't have to be.

[Mandos]

Think about, for example, micro-finance initiatives. They started out when people started looking at household budgets and trying to work out: what is keeping people poor? What is limiting opportunities? That led to real action the problem of poverty.

...with effects that don't, you know, appear to be a a particularly radical or large alleviation of the problem of poverty. Those of us who never adopted methological individualism into our thinking are just not surprised at the modesty of the results.

[Darren]

If you think that preferences just fall from the sky, and we all have exactly the same preferences, then yes, you can ignore culture.

Since that is self-evidently false, you can't ignore culture.

[Frances Woolley]

Darren, saying "culture is a lousy explanation" is very different from ignoring culture.

People who simply shrug their shoulders and say "it's culture" are as guilty of ignoring culture - in the sense of not exploring, interrogating, investigating it - as anyone else.

The methodological individualist research agenda is precisely *not* preferences just fall from the sky. It explains the origin of preferences.

[Giovanni]

Frances,

You write:

“The methodological individualist research agenda is precisely *not* preferences just fall from the sky. It explains the origin of preferences.”

Don’t agree. Since you cite Becker-Stigler, I’d encourage you to read Chapter 14 of the most excellent (and, sadly, late) Mark Blaug’s indispensable “The Methodology of Economics” (the text of which should be tattooed on the frontal lobes of every economics doctoral candidate). In this chapter, Blaug writes at length about what hardcore methodological individualism has produced in the Chicago School “new economics of the family”. He concludes that, despite all their grandiose claims, Gary Becker and his disciples have revealed very little about the world that was not already known. Rather, they have carried out what Blaug describes as a “verificationist” research program:

“…begin with the available evidence about human behavior in areas traditionally neglected by economists and then congratulate ourselves that we have accounted for it by nothing more than the application of standard economic logic. But what we never do is to produce really surprising implications directing our attention to unsuspected ‘novel facts’, that is, facts that the theory was not specifically designed to predict” (p. 226)

In this approach, preferences, far from being explained, are assumed - in fact, assumed to be whatever is necessary to reconcile the broad utility-maximizing story being told with the particular facts at hand. This is done subtly - by ensuring there are always enough free parameters in the model to reproduce any set of observed correlations - but the result is still pure formalism.

This case is instructive, I think, because it is typical of the why and how methodological individualism as practised in economics. The ultimate purpose here is really not to extend the science of behaviour, but to promote a certain view of human psychology and a related moral outlook. The psychological view is that all human behaviour can and should be understood as self-aggrandizement and nothing else. And the moral bit? In the words of a former grad school colleague: “The currency speculator trying to make a killing and the guy helping an elderly lady across the street aren’t any different. They do what they do for the same reason…they’re both maximizing their own utility. If the second guy didn’t get something from helping the lady he wouldn’t do it. So, if you criticize the first guy for being selfish you have to criticize the second guy as well.”

[JL]

Ok I think you need honestly think the following through:
I absolutely agree with you that just stating "culture" is not an explanation in itself. I don’t know who would say otherwise.
However, a large part of culture is actually what most people would call common sense knowledge: the cognitive map of categories people build to navigate their practice. Now because practice is relative to a specific activity, that practice and the relative cognitive categories are structured by the properties of that said activity and its organization in social spaces. In a social field the people who have the most power (through different forms of capital: be it cultural, symbolic, social or economic) are better situated to define the parameters of that said activity and even implement normative or institutional innovations that can transform the very meaning of the activity. This changes the possibilities in terms of the “possible moves” within a given social space (relative to an activity) – what you would call “choices”.
I agree that rationality can play a role in explaining the choices people make and also part of the very struggle that attempts to define the meaning of the activity (and therefore the possible choices). The problem is that it is the contingent history of a field that structures the layout of the game (and its very definition) at any given time. No one who engages in a field is a blank slate shaping these cultural constructs with nothing but rational self-interest. Actors are already “socialized” (for lack of a consensus on a better term), that is to say that the “rationality” and “preferences” they exhibit are already structured by their interaction in the field at a given moment in its history. That is why culture (as integral to the materiality of the social interactions) is not reducible to methodological individualism.

[relocation]

Nice job, it’s a great post. The info is good to know!