Thursday, July 12, 2007

Defining heresy

Heterodox Economist (yes, a recent blogger) strikes at something that's been bothering me for a while now too: the tendency of orthodox economists to define anything that isn't Friedman-derived math fetishism as something "not economics".

This point in particular is a good one:
Economics, as defined by the orthodox, is NOT the study of the economy. It is the use of a certain perspective/method: as stated by Lionel Robbins, economics studies "human behavior as a relationship between ends and scarce means which have alternative uses." Further, orthodox economists often presumes that this study must involve the use of formal mathematical models that have certain characteristics.

An "economist" then can study anything as long as the approach used is to consider human behavior as a relationship between ends and scarce resources. This might involve buying a car, deciding whether to have a baby, figuring out how best to win a war, and so on. It's all economics.

What is NOT economics is "the study of the economy." Go figure.
Reading that, I was reminded of when the NY Times ran a story on George Akerlof's address to the AEA -- his address was called "The Missing Motivation in Economics", (PDF) and dealt (grossly shortening his thesis here) with the fact that people have pre-existing conceptions of what they should do, quite apart from simply following price signals.

I remember being confused and shocked when one economist in the article said (paraphrasing here) "Well, it's interesting and all, but it's not economics." Get that? Studying why people make economic choices isn't economics, because you dare to incorporate something non-mathematical like a normative assumption. This is such a brittle view of what "economics" is, you kind of hope somebody comes along and smashes it soon.

1 comment:

Lorraine said...

Perhaps one promising lead is the so-called "post-autistic" school of economics.