Economics?

Robert Barro of Harvard recently was offered a $300,000 salary to jump to Columbia. In reaction, MIT’s Paul Krugman wrote in Microsoft’s online magazine, Slate: "the ability to do innovative economic research is at least as rare as the ability to sink a basketball through a hoop—and a lot rarer than many other abilities that routinely command six- or even seven-figure salaries. So there is nothing particularly outrageous in principle about the record-breaking offer that has just induced the Harvard economist to move to Columbia University."

Actually, people earn lots in our society if they pocket profits or have a strong bargaining position to extort high income. Do they deserve high pay for high output as compared to working harder or enduring hardship in their work? Economists don’t raise such questions.

Krugman tells us that "academic success depends on a reputation for cutting-edge research…" and that "leading university departments value technical skill and originality rather than ideology…." To us it seems that economics is in thrall to capitalism, serving to rationalize markets and private ownership and secondarily to feed folks like Barro. Concern to understand the full implications of markets and private ownership is near nil. Here are some interesting views from other economists.

Frank Hahn Nobel economist at Cambridge writes: "...there is something scandalous in the spectacle of so many people refining the analyses of the economic states which they give no reason to suppose will ever, or have ever come about." T. W. Hutchison concurs: "One cannot easily justify the extensive cultivation of abstractions which have no discernible applicability or relevance in the world as it is, on the grounds that one day, somewhere or other, some kind of applicability or relevance might conceivably turn up." Nobelist J. R. Hicks adds: "…this equilibrium model…has been fertile in the generation of classroom exercises; but so far as we can see, they are exercises, not real problems. They are not even hypothetical real problems, of the type ‘what would happen if’ where the ‘if’ is something that could conceivably happen. They are shadows of real problems, dressed up in such a way that by pure logic we can find solutions for them." And Robert Lekachman writes: "Young economists emerge uneducated, PhD in hand.... No one has told them that one major task before them is how to control the dominant corporations whose origins and development no one has seen fit to tell them about."

How does it happen? Here’s Nobelist Wassily Leontief on the matter: "...tenured members of leading economics departments continue to exercise tight control over the training, promotion, and research activities of their younger faculty members and, by means of peer review, of the senior members as well. The methods used to maintain intellectual discipline in this country’s most influential economics departments can occasionally remind one of those employed by the marines to maintain discipline on Parris Island."

What do graduate students say? Here are some quotes from a book by Arjo Klamer on the views of students at University of Chicago, Harvard, Columbia, and MIT: "The first year seems to shape the rest of our career as an economist. We are moving into something but nobody really knows what that is.... It’s like being brainwashed. You are deprived of sleep. You are subjected to extreme stress, bombarded with contradictory notions, and you end up accepting anything."

"I try to float with the current. I am not happy about it. I have no idea where I am going. Before I came here, I had clear ideas, now I don’t have a clue."

"I don’t feel I have learned any economics. I spent the entire first term thinking, ‘Is this economics?’ This has no relationship with anything in economics. I feel as if I am learning engineering skills... when I read the inflation rate is going up and the exchange rate down, I have no idea why that is."

"We learn what all the recent theories are, look for little holes in them, and write our PhD theses on that. You don’t really care what the framework is. And you don’t really care if you come up with solutions to a real problem."

A quote from Lekachman puts the whole matter quite well. "A student who masters the apparatus, no small feat, invests his [sic] time, energy, and tuition fees to acquire an explanation of behavior often at variance with the conduct of actual consumers and actual producers. If <D>he or she is truly unlucky, he or she will be fascinated by the sheer elegance of economic theory, invest still more time, energy, and money, and become an economist. It is a tribute to the intelligent realism of most students that few of them take more than a single introductory course in economics."