In this recent post, I made the following claim:
The evidence for the Keynesian worldview is very mixed. Most economists come down in favor or against it because of their prior ideological beliefs. Krugman is a Keynesian because he wants bigger government. I’m an anti-Keynesian because I want smaller government. Both of us can find evidence for our worldviews. Whose evidence is better? I’m not sure it’s a meaningful question. My empirical points about Keynesianism won’t convince Krugman. His points don’t convince me. I am not saying that we will never get any kind of decisive evidence on the question. I’m saying it sure isn’t here now.
I have evidently disillusioned Daniel Kuehn:
This is a statement about Russ that I wouldn’t have even made before I read him say it himself. He holds his views on Keynesianism to conform to his ideology. That’s a really disheartening thing to read, even though I’ve never been particularly in agreement with Russ in the past. I would have figured he at least had other objectives. Scientific conclusions based on adherence to an ideology are worthless. This is how we get the persistence of ideas like creationism and geocentrism. That isn’t to say that in ruder stages of society creationism and geocentrism weren’t decent explanations – they were decent at one time. But when the evidence starts to stack against them, adherence to ideology is what impedes scientific advances. That Russ actually embraces this is dumbfounding to me.
Needless to say, I see no evidence at all that that’s why Krugman views Keynesianism favorably. Russ doesn’t appear interested in offering any reason for thinking that’s Krugman’s motivation. It doesn’t really make any sense. There are Keynesians who favor and oppose larger government (just as there was at one time a fairly active community of Austrian socialists). Your view on how the economy works doesn’t require a certain political philosophy.
I recently interviewed Valerie Ramey on the multiplier. In her work, the multiplier ranges from .8 to 1.2. A multiplier of 1 means there is no stimulus from the spending–GDP rises by the amount of the increase in G but by no more. Private spending doesn’t grow. When you include the taxes (either today or in the future to pay back debt from the increase in spending) that finance the government spending, it’s particularly costly. Ramey uses a very clever idea to generate her estimates, but she is respectful of what other people find and in her survey of the literature and in our interview she says that the multiplier may be as small as .5 or as large as 2.
That’s a four-fold range. That in itself is discouraging. (Ramey and I had a very interesting conversation about the implications of that range. You can listen to that podcast in about ten days.) Much more discouraging is the fact that most if not all of the people who think the multiplier is large are fans of larger government and most if not all of the people who think the multiplier is small are fans of smaller government.
What is one to make of this alignment of ideology and belief? Is it a coincidence? Or perhaps causation runs the other way. It is possible. It is also possible that the small estimates of the multiplier are the right ones. Or the large ones are. And the other side, whichever side that is, does econometrics poorly. But to me it suggests scientism rather than science. It suggests that we are unable to measure the impact of the government on the economy with any precision. This is a particularly persuasive idea when you consider that few (any?) proponents of one view or the other change their mind when confronting the findings of the other side. And each side would certainly concede that the other side’s proponents are exceptionally bright, well-trained economists.
My view is that we cannot accurately measure the effect of government spending on the multiplier. To think otherwise is the pretence of knowledge. I don’t view my view as anti-scientific but rather a view that recognizes the limits of knowledge and the tools we use to measure the impact of government on the economy. It is not scientific to use science for tasks it cannot achieve. That is scientism. Very dangerous.
Daniel is right that I provided no evidence for my claim about Krugman, that his views on stimulus are driven by ideology as I know that mine are. The evidence is implicit in the post but I should have made it clearer given the boldness of the claim. Daniel “sees no evidence” of the claim in his own reading of Krugman. Here is my evidence. I will be interested to see if Daniel finds it persuasive.
(And one more point before proceeding. I do not believe that ideologies are evidence-free. I hold my ideology for a wide range of reasons many of which are based on what I observe about the world and human behavior along with a set of beliefs about how the world would work if my ideology were more prominent in policy decisions. But I don’t pretend I’m against government spending because the multiplier is small. Now on to Krugman.)
1. Krugman demonizes those who oppose more government spending. He rarely or ever grants the possibility that they might be right and that he might be wrong. This is not the way a scientist thinks. It is the way an ideologue thinks.
2. Krugman cherry-picks data and stories that confirm his worldview. He doesn’t just dismiss data that challenges his worldview. He usually ignores it. He does not write about the Japanese malaise that persists after trillions of increased spending. He does not write about the growth in the US economy when World War II ended. He rarely if ever writes about the work of Higgs or Ramey or Barro who find that wartime spending during WW II hurt the US economy. If he does, he writes about their work dismissively. He does not concede the possibility that the failure of the 2009 stimulus might challenge his views. (I recognize the possibility that it may have failed because it was badly designed or because the problem is worse than we thought and it was too small. Krugman never to my knowledge writes that he might have to reconsider his views based on the evidence.)
I did find a post where Krugman conceded that John Taylor “actually has a pretty good point.” That point is that there was actually very little stimulus in the 2009 stimulus package. Krugman calls that point “pretty good” either because he really thinks it is or because it confirms his own world view. The evidence suggests the latter. In other posts on Taylor he refers to a “zombie claim” of Taylor’s or says Taylor has lost his mind or that his mind is corroded, that it’s a “good bet he [Taylor] doesn’t believe what he’s saying.” I mention Taylor because I know him a little bit. He’s a fine person and thoughtful and I’ve never seen him write or say anything like this about his intellectual opponents.
Krugman has written once or twice about the austerity of the World War II economy from a consumer’s viewpoint. He as explained that as being caused by rationing. He does not explain why rationing was necessary.
Certainly, Krugman has a story to tell that can explain the failure of the 2009 stimulus package, the on-going malaise of Japan, the World War II and post-World War II experiences. I’m sure he has a story about why stagflation was consistent with the Keynesian model of today (it’s been improved!). His stories would have facts. His stories could be right. What I find interesting is that I do not remember a time when he written for the New York Times where he has conceded uncertainty, or the possible virtue of the ideas of his intellectual opponents unless they comported with his own views. By the way, in his other writing, Krugman writes like a scientist. In his book, The Return of Depression Economics, he often says some issue is unsettled, we don’t know the full story and so on.
Of course I’m not a big fan of Krugman’s work in the Times. Maybe I’ve cherry-picked examples and failed to notice the times he was gracious or thoughtful about people who disagreed with him or more importantly where he conceded that his own views might be wrong or that further study was needed before reaching a definitive conclusion. Happy to learn about those writings from Daniel or others. But on the surface, he does not write like a scientist. He writes like an ideologue. That’s OK. He is an ideologue. Me, too. Nothing wrong with that. What is wrong is to be an ideologue while pretending that your ideology doesn’t affect your views on economics. I think it does. And pretending or claiming that economics has a great deal of certainty when you know that it doesn’t also doesn’t strike me as something a scientist should do. It’s what ideologues do.
Daniel is right that using ideology to judge science is bad science. I think the recent debates over the effects of the stimulus package are indeed bad science.
UPDATE: Matt Yglesias isn’t happy with me either.
UPDATE: Krugman responds to my first critique here.
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Scientific conclusions based on adherence to an ideology are worthless.
This is a revealing about DK. The very point of Russ’s post is that the reason Keynsianism is controversial is because it’s not scientific. This is one of the dominant themes of this blog. While there are things known about an economy and human nature, there is a lot of things that are unknown. Claiming that economic statements are “scientific” after acknowledging that there isn’t enough data or knowledge to make scientific statements is pretty funny.
While Russ admits that there isn’t enough data to make definitive conclusions about many thins and honestly says that he falls back on ideology, as do 100% of all humans, DK refuses to admit his conclusions are affected by his ideology and disingenuously wraps himself in scientism.
Regards,
Ken
Exactly. Humans are anything but rational no matter how much we try to pretend otherwise. The best current neuroscience indicates that, in decision-making, the reasoning portions of the brain engage after the choice-making portions have already done their job. There is good evidence that much of what we consider to be reason is actually post-hoc rationalization. This is how the brain is wired.
(For a good summary discussion of this, see Steven Pinker’s book, The Blank Slate).
One of the things that I wonder about is how much we can count on human action being rational, when the scientific evidence against a conventional view of rationality seems to be mounting. It would be great to see this examined from an Austrian perspective. Maybe Russ can get a guest on to discuss the implications.
The exact same dynamic is visible in journalism…the refusal to acknowledge one’s own bias causes journalists to proclaim as the truth their own prejudices.
Isn’t preference at the bottom of this? There is no objectivity to prefer fairness over productivity or vice versa. Once you have an expressed preference, the system that best reaches that goal is your preferred system.
It is for that reason that I am less interested in a system that services my preferences and more interested in a system that allows people the freedom to choose their own system that doesn’t infringe on others freedom to do the same.
I think that both the producers and the politicians are “correct” in their beliefs, but their interests are quite obviously different. The mistake is thinking that we are all in this together.
Russ, your intellectual honesty in admitting that we ALL suffer from confirmation bias is one of the main things that appeals to me about this blog and Econ Talk. I often disagree with your opinions but always admire your attempts to remain open minded.
I disagree, I thought it was a transparent climbdown into the “everybody does it” defense.
I agree.
I see Keynesianism as little more than intellectual cover for political control over the economy.
It allows politicians to appeal to authority, in this case a professor who preaches Keynesian economics like Krugman.
And what’s with this C + I + G + (X – M)?
All that G must be removed from the economy before it can be added back in, so shouldn’t it be a wash?
Or perhaps a negative number since much of the money goes to bureaucrats who produce nothing of value before it is doled out based upon political considerations.
It doesn’t pass the smell test.
As opposed to Hayekianism as the intellectual cover for pure selfishness? The argument goes both ways. Not saying I agree or disagree, but the counter argument is there.
Your point about G is as valid as the same point about all the C or I that gets sifted into lobbying on the part of big business. There’s inefficiencies on both sides of the spectrum.
I think your blog template is hosed, the sides are gone. Not that I mind, all that twitter/facebook stuff just slowed down your page loading times.
I’ll only address only one of your points:
1. Krugman demonizes those who oppose more government spending. He rarely or ever grants the possibility that they might be right and that he might be wrong. This is not the way a scientist thinks. It is the way an ideologue thinks.
This is complete BS, this is the way an expert thinks. I read his blog every day, and he is constantly explaining where his data comes from and what models he uses:
http://krugman.blogs.nytimes.com/2011/10/11/why-believe-in-keynesian-models/
All you have to do is prove you know what you’re talking about to get through to him. But all I never see any math from Cafehayek, just dusty 50 year old quotes, endless contrived hypothetical situtations and tired rhetorical questions (how does making raising prices for the consumer make them richer?).
Now you’ve got a grad student cleaning your clock. Maybe it’s not Krugman, but you?
Has Krugman ever even addressed Russ in any way? It’s not Russ who Krugman dismisses, it is ANYONE who disagrees with him, no matter how accomplished or how much “math” he uses.
Clive Crook, Jamie Galbraith, “modern monetary theory people” ..three examples I found with 120 seconds of google…in each case he explains in details why he disagrees, which pretty much the exact opposite of “dissmisses” (I think you meant dismissive).
Has Krugman ever even addressed Russ in any way?
http://cafehayek.com/2011/10/truth-seeking-and-ideology.html#comments
how does making raising prices for the consumer make them richer?
go over to Krugman’s blog and ask him that. Not that you’d understand the explanation, but just for fun, do it anyway.
I called it a tired rhetorical question because it is. (It separates the advantages of trade from the disadvantages).
Or as PK said about a different situation:
This goes beyond holding views I disagree with (as does much of what happens in this debate). This is a deliberate attempt to fool readers, demonstrating that there is no good faith here.
http://krugman.blogs.nytimes.com/2011/09/27/bad-faith-economic-history/
Nothing beats a vacuous answer generated by a vacant skull.
The stuff on the sides is now pushed to the bottom.
IB,
Thanks for cleaning my clock. Much appreciated. That post you linked to is the one I linked to also. I know he “constantly explaining where his data comes from and what models he uses.” But in that post he managed to leave out any data or models that challenge his. That’s my point.
Try reading some Richard Feynman or other real scientists. They constantly challenge their own views. Maybe because they know that if they say something that can be tested and proven false, they will look foolish. Very few statements about macroeconomics are falsifiable. Ergo, more hubris and less humility in macro.
Good luck in grad school.
Actually Dan Kuehn is the grad student, and you didn’t put the link I included in your post.
You seem to think Krugman is required to disprove his own theory or it’s not science. Then you assert that since it is impossible for you to do what Krugman claims to, it is impossible for everybody. To support this you rely on anecdotes.
You don’t have to take my word for it, there’s a guy on youtube called Russ Roberts saying that:
http://www.youtube.com/watch?v=RHN34r2SAjY
Russ Roberts links to “krugman.blogs.nytimes.com/2011/09/27/bad-faith-economic-history/” within his post at the link “this recent post” (above) which he refers to at the very beginning.
The late Particle Physicist Richard Feynman explained what a true scientist does. It doesn’t fit Krugman.
( http://www.lhup.edu/~DSIMANEK/cargocul.htm )
=== ===
Details that could throw doubt on your interpretation must be given, if you know them. You must do the best you can–if you know anything at all wrong, or possibly wrong–to explain it.
If you make a theory, for example, and advertise it, or put it out, then you must also put down all the facts that disagree with it, as well as those that agree with it. There is also a more subtle problem.
When you have put a lot of ideas together to make an elaborate theory, you want to make sure, when explaining what it fits, that those things it fits are not just the things that gave you the idea
for the theory; but that the finished theory makes something else come out right, in addition.
=== ===
I linked to:
http://krugman.blogs.nytimes.com/2011/10/11/why-believe-in-keynesian-models/
Richard Feynman explained what a true scientist does. It doesn’t fit Krugman.
I think the Nobel Committee is a better judge of Krugman’s science chops than you are.
Nobel Committee? Hearty belly laughs to you sir/lady.
To IB,
My mistake, not Russ Roberts’. He links to the same post that you linked to.
Do you have a personal opinion of Krugman’s approach now? Does he uphold the honor and self criticism of a good scientist?
He recieved a Nobel Prize. Is that your response to all criticism of Krugman, regardless of his actions now?
To IB:
Just like the Nobel Committee was an excellent judge of Obama’s peace-loving chops?
Methinks you are suffering from authority bias here: http://www.brainbiases.com/2008/11/authority-bias.html
-Ameet
Russ,
I am a system support tech. As arrogantly confident as I am in my comments here, on the job I am consistantly hyper-critical of my own hypotheses until they check out. Only the facts work.
+1 and a huge yes to that.
If you don’t stand up for your hypotheses, you end up getting pushed around at work because your co-workers and bosses are standing up for theirs.
Well, in some fields that may be true. But I’m solving technical system problems. Politics sometimes decides which problems I work on, but it never solves the problems themselves.
Yes, standing up for your hypothesis no matter how often its disproved is the hallmark of government drones and Keynesians.
@ Randy- “Politics sometimes decides which problems I work on, but it never solves them”
-Well said.
You often say that macroeconomists have a lot of hubris and don’t question their assumptions. Why do you think this? This is not my experience at all. Two weeks ago I presented a paper at an NBER conference and I qualified the hell out of what I presented, even when I thought I had probably hit on something – I knew the evidence wasn’t entirely decisive. And even given those qualifications, the audience went the extra mile in pointing out yet more alternative explanations.
Every lunch seminar I’ve been to at American University so far (which have happened to largely be macro topics) has had people that are loathe to make declarative assertions and that always run through the limitations of their claims in detail. This is very common. Why? Because if you aren’t up front with your limitations your audience or your reviewers will definitely let you know about them!
I don’t have the experience of a Chicago University education like you do, Russ. But even in the humbler institutions I’ve been a part of – William and Mary, George Washington, and American – and at the Urban Institute which also brings in researchers to deliver papers – it has not been my experience that economists are brimming with hubris. It’s precisely the complexity of the subject matter and the profusion of alternative explanations that makes them especially humble, in my experience.
What I think you get caught up on is that in January 2009, with an impending crisis you have to go with your best guess. Would it be nice to sit on the fence and study it a little more? Of course it would. But in that sort of situation doing nothing IS doing something because you are choosing to forgo action you could have taken. You don’t have the option of studying it more. You have to make a decision: do something or don’t do something. And that decision has to be based on the best evidence at hand. At that point, you do have to take a leap of faith. But that’s not economic science, that’s economic policy. That’s saying “given the science to date, what is our best choice right now” (and that choice could certainly be “do nothing”). I’m afraid you often conflate working with the information you have available in that case with hubris among scientists.
Anyway – thanks for linking to me.
I beg to differ. Within the academic halls, it is unusual to hear experts speak this way at all. As a result, Krugman may be altering his voice when he speaks to the people in general, setting himself as an authority, rather than as an academic. However, he poses as an academic in his articles, so one should expect him to act like one.
Furthermore, he may explain where his data comes from, but doesn’t discuss the potential bias that may be inherent in some of that data. He just picks and chooses the data he deems to be accurate, and uses that to bolster his point. Certainly, this is what everyone (including the authors here) does, so he can’t be blamed for this. But he can be blamed for deliberately misleading people with regard to the data, or for obfuscating facts. His dismissal of those who caught him on the “Ponzi” comment was outlandish. He never explained himself, he just excused himself from the discussion. This is standard Krugman. Get caught, blithely issue a light explanation which is more red herring or straw man than explanation, and end the point on as much of a up note as you can.
Don’t be completely beholden to data. I can supply you with tons of data which show how banks ‘took advantage’ of government money in the form of taxpayer bailouts. Reams of data exist on this. But how easy is it for me to collect data showing the institutionalization of moral hazard by the tacit agreement on the part of government to cover bad loans in order to improve home ownership? This is very hard to document, yet is a key point in the discussion. If I run a business and government promises to cover all potential losses because it views my business as a ‘public good’, then am I not likely to take outsized risks as a result?
Krugman would take any data I can accumulate on this to ‘prove’ I took advantage. I would take the data to show that under a less intrusive government, these are risks that never would have been taken. But my point is much more difficult to “prove” because it engages things that are difficult to see – invoking Bastiat.
You may love Krugman. Many people do. Frankly, I find him a buffoon and frequently offensive. He called Tea Partiers “terrorists” and the Occupy Wall Streeters “legitimate”. I fail to see a difference between the two. Both are using free speech, both are against crony capitalism. Where the differences appear is in the solutions they wish to apply. Tea Partiers want to shrink government so that crony behavior withers. OWS wants to increase government regulation to fight the very plague which it has been infected with (assuming that’s the solution they want – because they really have only filed grievances and offered no solutions). That Krugman would plump with those who file grievances and no solutions doesn’t surprise me a bit. He’s got tons of grievances and only one solution which he uses like a sledgehammer – increase government.
Talk about dusty old quotes. Krugman is one dusty old quote of himself, over and over and over and over again.
“1. Krugman demonizes those who oppose more government spending. He rarely or ever grants the possibility that they might be right and that he might be wrong. This is not the way a scientist thinks. It is the way an ideologue thinks.”
i think this captures the essence of reading Krugman in the Times. What i have always found unfortunate about the role he has taken upon himself is that his ONLY influence is one of “preaching to the choir.” His style completely precludes any persuasiveness. For someone with his exceptional intellectual ability, it is in my opinion sad to see his talent go to waste. What’s even worse is that he has inspired many other liberal leaning economists to be his soldiers, to carry themselves in a similar fashion, also to their discredit. Perhaps an analogy would be professional sports stars who carry themselves as upstanding citizens off of the court versus those that don’t. Everyone knows they inspire a generation of copy cats. Given the current state of The Economic Dialogue, improvements in the field and its broad influence may be curtailed.
Notice how you don’t make any argument that contradicts what is actually said in what you quoted. Russ argued that Krugman opposes those who oppose more government spending, and he RARELY or ever grants the possibility that they might be right.
You then go on to argue that Krugman is very thorough, thus missing the point.
Perhaps what I’m about to say is implied in what Russ says in the post, but I think it’s worth making explicit: It isn’t so much that ideology drives one’s interpretation of the hugely complex phenomena that all social-sciences deal with as it is that one’s intellectual priors drive this interpretation. (One’s ideology, in turn, is itself driven by one’s priors and how one uses those priors to interpret empirical reality in light of some basic ethical postulates [such as, e.g., slavery is unconditionally wrong].)
It is frustrating, to be sure, that truth does not reveal itself so clearly in the facts of the social sciences. Truth must be hunted for and, ultimately, only tentatively grasped and always only conditionally held – and this hunting can be done ONLY with a set of priors.
One’s priors can change, of course.
Good judgment and wisdom – unquantifiable characteristics of sound thinking and scholarship – are indispensable in all scientific work, but loom far larger in the social sciences than in the physical sciences. The reason is that relevant controlled experiments in the social sciences are nearly always impossible to conduct.
Thus the need for a good economist to know not only technique and economic theory, but – indispensably – also a great deal about philosophy, political theory, and, above all, history – history both of the economy and of economics.
Economics today is populated by hordes of idiot savants capable of building impressive models that are internally coherent. But NO economic model – not even my favorite, supply & demand – tells us a damn thing about reality unless that model is applied wisely by minds that know far more than what the model is about.
Economic models NEVER impress me; they never have impressed me. What impresses me is a narrative (that might – or might not – use a formal model) that makes empirical reality more understandable.
I was a history major, so I love a good narrative, but I think you have to use a model to make decisions, economic or otherwise. If you want to convince anyone else of your reasoning you need to make your model explicit. And, the less you share an ideology with the person you are trying to convince, the more comprehensive you need to make your model.
The problem with economic models, as I see it, is that the explicit models will always be incomplete because economic systems (and the individual actors) are so complex and constantly evolving. And, so large parts of your model, no matter how hard you try to make it all explicit, will always be made up of rules subconsciously informed by ideology and personal bias.
The mission of economics as a profession, as I see it, is to strive to make explicit as much of the model for economic decision making as possible.
Charlie Munger has a great essay on incentive caused bias. Buffett and Munger are the only two people I know you make their living by estimating how much other people are lying (and why). They will not even read reporters from investment bankers or brokers, for example.
Beyond Keynes it is very hard to say that there is any science to economics. There are too many variables and there are no tools for measuring what is most important: people’s vision of the future. The attempts to model such behavior on taxes or interest rates are pointless. The reason lies behind why we allow every one to vote. We can all sense when we need change.
For many years I have applied Munger and Buffett’s checklist which results in throwing most economic writing in the trash can because of incentive bias. When you apply what they say and through out what is little more than pandering one comes with Keynes and nothing else. This appears to be political test but actually it is apolitical—people writing and saying things to curry favor, etc. with certain special interests. The business of teaching finance, for example, is completely captured by Wall Street. No finance professor today will even say that it is wrong to lie to sell a stock yet alone deal with the issues raised by the later papers by Michael C. Jensen, for example, on how companies fix stock prices.
Last, the true challenge for economics is that the current environment is so bad, when it ought to be so good (according the vast Right Wing Conspiracy) We are at war, we are paying no taxes, interest rates are through the floor, the rich have all the income, imports make no difference, etc.
The disconnect between fact and reality shows that no one since Keynes has remotely grappled with reality (and what the American public has decided is that not one is going to such such either)
No finance professor today will even say that it is wrong to lie to sell a stock yet alone…
Yeah. You’ll find that’s because finance professors are busy teaching stuff you clearly consider of secondary importance like financial theory instead of wasting valuable class time reminding you that stealing and lying are bad – a lesson your mamma should have taught you.
The disconnect between fact and reality..
Now, that is an interesting disconnect indeed, much like the disjointed word salad that is your post.
I remember finance classes: Increase shareholder wealth – which isn’t possible for long without producing something of value.
I also remember business ethics classes… which seems strange to me now that I have more experience. I mean, why did I have to take business ethics in a field like business that is inherently ethical, while political science majors are not required to take a political ethics class in a field that is inherently unethical?
physical handicap typing
have you ever read Jensen, attended any of his talks?
have you ever read Roubini on the extent that special interests have captured the finance faculty?
new insights at http://ineteconomics.org/blog/inet
Guesnerie, as Michael Woodford before him, takes issue with rational expectations. To Guesnerie, rational expectations is a hypothesis, but “dominant economic discussion and practice have most often transformed the Hypothesis into an unavoidable and supposedly uncontroversial modeling axiom.” The optimism embedded in the efficient market hypothesis, Guesnerie continues, “has been one of the main sources of the recent turmoil: it has opened the floodgates to overconfidence, and weakened regulatory forces everywhere.”
The product of your time at your computer keyboard implies a handicap, but it’s not physical.
The markets are not efficient because they are over-regulated. I know first hand just how heavily they’re regulated and I understand the distortions created by it. Have you ever thought critically about anything you read or do you just swallow everything hook, line and sinker?
How does one write so much and say so little? Indeed, you are a true student of Keynes.
And here, all this time… I thought this was settled science.
@macrotots
If a single human is involved it is not economics, and if two are involved it is likely not settled science.
So, I was an undergrad studying computer science and math (minor) at UC Irvine 20 years ago. In all of the math courses, and most of the CS courses, there were never any arguments rooted in histeria and immediacy, i.e. “if we don’t do this now, we are soooo scr3w3d.” Our CS department had a very unique (for the time) subsection of profs working on “computerization and society”, so of course, those courses had a lot of “if we don’t this now, we are soooo scr3w3d” components to them. I wrote a paper for one of those courses with the very unpopular theme at the time that (then highly regulated) local phone companies in California should be “allowed” (gasp for air now) to offer Caller ID service. Ran into that paper a few weeks ago and it got an A and had a whole bunch of “I’ve not seen that argument and will be thinking about it” all over it.
Point is, this mode of academic thought combining hysteria and immediacy was at the edges of my chosen training. In Poly Sci courses, well, it was infused, but that’s par for the course, and why I just took the minimum.
The big surprise for me was when I had the opportunity to take a breadth course to cover my Physical Sciences requirement taught by Nobel recipients Cicerone and Rowland. It was on climate, with a lot of focus on CFCs, which they were proud to have phased out with the Montreal protocol. Rowland, though the more tempered personality of the two, has bragged about meeting with Maggie Thatcher and scaring the you know what out of her over the missing ozone layer. Now, in the quarter century since the Montreal Protocol, there has been mostly silence as industry moved on at higher prices but a lot of the scary predictions didn’t come true. Cicerone, for his part in that course, absolutely whipped the young sorority girls into a frenzy over the terrible skin cancers their kids would suffer because we were already too late acting to correct the destruction we’d done. I remember a study group where two were crying about it. This is when I became instantly skeptical of science tied to a political agenda, especially involving treaties, or laws, or regulation. It does not play to our thinking but to our emotions, and deliberately. Even with real, hard-core science supposedly behind them, they sold the narrative.
Punch line: when economists talk about aggregates of things people do in a scientific way, with all the weirdness and disparities of individuals, I find it less convincing than a complicated climate model from 25 years ago that has turned out to be a mixed bag. When those economists make policy recommendations wrapped in the “science” with numbers far more accurate than their models have inputs to produce, I’m confident that they are full of beans, whether they know it or not. I think what Russ is doing is saying to economists, “Let’s drop the pretext of scientific and let’s focus on the narrative.” It is an especially opportune time to suggest that, because the explanations and prescriptions of the “science” in economics (i.e. Keynesianism) have been mostly worthless this time around. BTW, the true value of narratives is that they are forced to recognize and incorporate context. So we can understand why W’s $600 checks in the summer of 2008 were spitting into the wind, despite the promise that they would ward off a recession.
This is an interesting post. But what about the Austrian mantra: Praxeology! It is impossible to be an ideologue and at the same time indulge in praxeology? You are supposed to be immune to the ends of human action and instead concentrate on the means by logical deduction. Any ideologue has a very strong opinion also about the ends and not only the means.
PS: For some reason your website layout is completely broken. I can either read the post. Then comments show up in super-sized letters. Or I can scale down the comments but then the post is unreadable.
“It suggests that we are unable to measure the impact of the government on the economy with any precision.” Isn’t this exactly what Austrian economists have been saying for years and years?
Is there a link to Kuehn’s critique of Russ? I’ve looked at this post twice and the comments once and I can’t find it.
Little help?
Fixed. Sorry about that. I’ve added it to the post. But it’s here, too.
What is an ideology? A theory of how social systems work. An ideology is a theory like all other theories. Some people accept theories without thinking much about them. Others develop theories based on what they have learned from others. Yet others develop theories based on evidence they themselves have accumulated. Darwin did the latter. Other evolutionary scientists have done a combination of the latter two. Many Darwinist scholars do the second. The rest of those who accept Darwinism do so the first way. The same with ideology. I can only speak for myself when I say that I became a libertarian through what I learned about economics. This was reinforced by everything I read on complexity, self-organization, human behavior, etc. The combination of such evidence about how the world works, in combination with my readings on economics eventually led me to Austrian economics, which most fully matched everything I had come to understand about the nature of human beings and the world as a whole. This does no doubt lead to a certain amount of confirmation bias — which we need to be self-aware of in order to try to overcome it. Of course, science itself helps mediate such things (Krugman is safely outside of the system of science in his NYT post, so is far more careless in it than in his scientific work). For what it’s worth, that’s how it has worked (and works) for me. I’m not a Keynesian because most of what he said does not match how I understand the world to work, or human beings to act.
I think anyone who – doesn’t – recognize that ideologies have an effect on their thinking is either lacking humility or is simply delusional.
Daniel said this at the end of his post:
“I hope Russ comes around to the idea that ideology is not the best guide for science.”
Everyone knows that peer-review is a very important part of science. The reason that peer-review is quintessential to scientific research is – precisely because – individuals filter information through their pre-conceived notions of the world! Science backs up Russ.
there is a simple test for whether you are driven by ideology and that is whether you support ideas, contrary to your narrow financial interests
So if Pol Pot could have made more money as a teacher then he was a serious social scientist? Good Lord!!
Where did Yglesias get the crazy idea that GW Bush wanted a smaller government?
Two points.
First, I’d love to know why the multiplier isn’t, at best, 1.0. I guess you could argument that it’s 1.0, and not .8, because the government’s overhead still gets into the economy, but I don’t understand how the multiplier could be greater than 1.0 except by double-counting.
Second, I don’t care what Krugman’s motivations are. What bothers me is that WWII ending the great depression is a horribly confounded example that is also brought into question by the present; why wasn’t all of Bush’s Iraq and Afghan war spending stimulative? IMO you can blow holes in Keynesianism without have to get into motivations.
And, as I have said before, overhead is overhead and I don’t understand why government overhead is any different or better than any other kind of overhead.
To use a holiday analogy, when you pass a pie around the table, people take a cut out of it (overhead), and then pass it down the line. How, exactly, does the pie get any bigger during it’s course around the table?
Wars only count if they are against imaginary alients.
You ask, Why wasn’t all of Bush’s Iraq and Afghan war spending stimulative?
Who said it wasn’t. Work with the truth. Assume, as I do, that we lost the War on 9/11 when Bush took the planes out the sky and shut down the economy. Everyday fears for and plans against that day, today. What if the the scope of the damage that day , psychologically, was 50% of the damage to Germany in WWII? How much stimulous and to whom to fill that hole?
If you thought of the damage as a sinkhole in the backyard, how much dirt, gravel, cement, and rock would you have to pour down the hole.
We don’t remotely have the tools to make these measurements–my point is too challenge your assumptions. You think we were ok on 9/12. I think, and you now see all the empty buildings, that the “blasts” left the buildings standing but killed the businesses and people inside. People were “dead” and didn’t yet know it.
Truth like art is in the eye of the beholder. Few can publicly suggest this as being the post 9/11 reality, but there is evidence: All the stimulus and the patient is still sick. They can mean one of two things: The stimulus doesn’t work or the patient was sicker than we thought, a lot sicker.
Kolya, dorogoi, you’re clearly just a couple of vodka shots shy of disabling yourself from pounding out drivel on your keyboard. Do us a favour and polish off the rest of the bottle.
LOL
Indeed: Spent money is money that is spent.
I majored in economics. I was a typical undergraduate who had no clue what he was going to do in life. I liked history, but hated writing papers. I took almost all my gen ed classes by the time I finished my second year and was told to pick a major. It just so happened that I was in my second econ class and did exceptionally well on a test that the rest of the class bombed. I figured why not stick with it. The more I learned about the basics of economics the more I liked the pseudo-science aspect of it. What I found fascinating about economics was the basic concepts could be applied in every other area of study, history, philosophy, political science, etc and provided better explanations to life than any of the other social sciences (which is why I believe a basic understanding of economic principles will take you farther in life than any other degree). I also liked that economics to some degree could be tested mathematically. However, economics to me will always be much more of a philosophy than a science. There are scientific aspects and a lot of math, but to me the beauty of economics is the philosophy of it and with philosophy there are many areas up for debate and we only see the world through with the knowledge we now possess. If we truly love knowledge, we accept that we don’t know everything and that somethings we know might not be right. This last point is probably most difficult of all because so much of our lives depends on faith, economics included.
You need to read Heilbroner’s “The Worldly Philosophers”
He was one of my professors when I went for my Masters. He was great. He also admitted, before his death, that socialism had lost and capitalism had proved its dominance.
It has been on my list of to read.
This is a great, recent essay by Roger Koppl concerning the difficulties of modeling mental models. http://thinkmarkets.wordpress.com/2011/10/05/thing-1-and-thing-2-sit-down-to-talk/ It seems appropriate, here.
One of things I learned (or relearned) in reading the “Black Swan” was about the confirmation bias, e.g., the human tendency to seek out things that support our propositions. “Proof” has a second part, the diligent search for contradictory evidence. Even then, failing to find contradictory evidence only establishes its absence, not its non-existence.
Hence, two decades ago when I was testing software, we not only reviewed the results to ensure that they conformed to expectations, but sought to “blow the program up”. It was very instructive that apparently perfect programming would have flaws that weren’t apparent until they were run in a test environment where “silly things” like missing or misplaced characters in a header or dataset could produce an “abend” (aborted ending), incorrect processing or could drive the programming into an infinite loop. The latter was controlled by setting a time limit, based on the analysts expectation of processing.
Years later when I was introduced to Hayek’s “design” quote, I realized that software was something of an epistemological task. Later as a government auditor, I saw how policy objectives met early ends, produced “errant” results or continued on ad infinitum, just like computer programs-with “wonks” seemingly oblivious to the additional complication of the fact that people, unlike bytes, have a will. Few had even heard of Hayek, let alone allowed his insight to impart caution.
There are no greater victims of this than (our resident) statists and it’s noteworthy, because they suffer from innumerable other cognitive maladies, such as confusing emotions with reason (betrayed by the declaration” I feel”) and hero and complexity worship. (It’s Krugman using Keynes and he’s using MATH, so its right) Note, when challenged, IB dutifully goes and “googles” something (he FEELS to be) confirmatory. Any effort at providing the second half of “proof” is missing.
That having been said, ideology can be useful. I am ideologically predisposed to assuming that a price increase of a good causes reduced demand, as people react by delaying, deferring or substituting for consumption of that good . Now, there is a concept called “perverse elasticity” which occurs when the price becomes a signal for quality, so you lower the price and demand falls. In the real world, its so rare than any observed demand decline occurring contemporaneously with a price cut is probably due to something else (competition, regime uncertainty, etc).
The leftist seeks out cases of perverse elasticity and provides that as proof that the downward sloping demand curve is a racist, homophobic tool of capitalist oppression.
+1
+2
wow
+3
Russ, I hope you asked Ramey about the Federal Reserve counterfactual. Why isn’t the multiplier zero with a competent central bank?
I don’t see why the multiplier would be zero in any circumstance. Can you link to some explanation or background reading on this?
The argument is actually pretty simple. SRAS is never completely horizontal. So any increase in AD/NGDP will increase inflation. The central bank will therefore tighten up in response to fiscal stimulus to keep inflation from increasing and keeping AD constant.
Full version here: http://www.themoneyillusion.com/?p=2512
“I do not believe that ideologies are evidence-free. I hold my ideology for a wide range of reasons many of which are based on what I observe about the world and human behavior …”
Well said.
When nearly anyone can use statistics and/or models to “prove” anything they want, at some point one needs the skills and ability to step back and actually critically think about the data.
The following is a cliche, but it is relevant: the more I learn, the less I know.
Researchers and teachers (i.e. professors) would be much further ahead to acknowledge their ideology well in advance. It affects the questions you find interesting, and the information you think is relevant to your question. In economics there can be very little uncertainty, so anyone who says “we know X to be true” is suspect. What we can usually say is “most evidence suggests X is the case.”
And, frankly, anyone who denies ideology (or prior beliefs) has an impact on the direction and interpretation of research is an ostrich.
I should say “behaving like an ostrich.”
Do you mean in macroeconomics their is little certainty? I’m pretty sure there is a much agreement on issues of microeconomics.
Oy, that’s what I get for commenting right before class starts.
Yes, in macro; and I mean little certainty.
Although there’s arguments about micro stuff too.
ideology impact on reserach
How about the possibility of financial gain?
Why do so many good economists pay attention to Matt Yglesias?
Got the right thread this time, so here it is again:
kyle8 October 12, 2011 at 5:54 pm
Well it is real simple really, if there is a multiplier then the evidence here and in Japan recently is that it is simply not large enough to counter act the increase in regime uncertainty and/or the crowding out of private investment by government debt.
If it were otherwise then the huge fiscal spending here and in Japan would have had some noticeable effect on growth, rather than negative growth.
I don’t see any other way to spin out of this circumstance. It just doesn’t do to say that the stimulus was too small since that is a value judgment with no objective criteria for what is too big or too small. Furthermore even if it were too small there should have been some positive signs and yet all we got were negative results.
It is time to shoot this discredited old theory and throw it in the dustbin of history.
“I don’t see any other way to spin out of this circumstance.”
Of course, the response is that “it would have been worse without the stimulus.”
what tools are you using to measure how much damage has been done to the economy by events since Bush was elected President?
by Globalization
by the Internet
I realize that some claim positive offsets on the later two, but those offsets do not measure impact of events on real people who, as Keynes said, in the long run are dead
My question, how much damage before the offsets. For example, how much damage to Detroit, Cleveland, Memphis, etc. by de-industrialization
Yes, I agree.
We need to ban the internet.
Damn the productivity gains.
It may hurt some people.
rmv
typical brainless response
who said anything about banning the internet
I asked, how much damage has it done, before considering any offset
You don’t want to consider that question because you think that you can destroy the lives of other people and profit from it
I don’t
What he is trying to say is that it didn’t really hurt anyone, it created a vast amount of productivity, ease, and wealth.
Anytime changes happen there are some who suffer displacement, but in the long run everyone is better off with more wealth.
Your belief system is suspect. If you lived in the eighteenth century you would no doubt been a Luddite attacking mechanical spinning wheels.
That is, forgive me for saying it, simply idiotic. De industrialiszation has been going on for decades but I fail to see what fiscal stimulus has to do with it?
Also, blaming the Bush administration is silly because (1) Bush also used Keynesian stimulus (2) No one here likes Bush, and (3) Bush is not responsible for the horrible policies of the last three years, and (4)
again, what does it have to do with whether stimulus worked or not?
It will not do to pretend that there are any other relevant factors. Either the massive stimulus did us some good, some harm, or it didn’t do anything. Those are the only choices.
Since we do know that it caused a huge amount of crippling debt then it had better be provable that it helped us out a lot. But that is a claim that simply CANNOT be made!
Kyle8 asserts, “Anytime changes happen there are some who suffer displacement, but in the long run everyone is better off with more wealth.”
Well, first off, again as Keynes said, in the long run we are all dead.
Second, it seems to me that the more we shield people from suffering from displacement the more they will tolerate if not support change.
So, it seems to me that identifying who is being hurt and the scope and extent of such would be very valuable information to have
Yes Lord Keyenes was wrong about that too. It was an idiotic flippant remark that showed that he had no care for the effects of his bad policies.
Yet you repeat him. If you want to help people who have been displaced in order to sell freedom to them, then maybe some reeducation vouchers or something like that could be used.
But do not wreck the economy with trade restrictions, that is cutting off your nose to spite your face.
Russ,
I think this might be one of the best posts of yours I’ve read. It’s great to be able to take a break from my engineering job and read about the ideological influence on one’s scientific thinking. As I go about my day I sometimes think about the way you communicate, especially on Econtalk. I find myself unable to emulate the level of honesty and ideological self-awareness that I frequently observe in your statements and writing. This post is a great summary of what you try to do with your Econtalk guests. I’m going to study this post a little more and hope to figure out where I’m going wrong in my own communication.
I agree with Don that intellectual priors might be a better term than ideology, however I’m not exactly sure what Don means by intellectual priors. Would you mind elaborating on that in a future post Don (or Russ)?
Thanks
Scott
Daniel Kuehn is a doctoral candidate in economics at American University. He has a master’s degree in public policy from George Washington University.
Daniel, you’re like a fish in the water regarding your ideological premises.
?
A fish is not aware of the water it lives in.
This blog has now found it’s way into a large, mainstream public forum.Golf claps are in order to the owners.
I can only hope that one or two people see it for what it is.
If, based on your ideology (or, if you prefer, your economic model), you believe that government can control, or at least guide, a nation’s economy you must also believe that there is an effective feedback loop available to government. The Fed turns this knob or Treasury pulls this lever, the economy responds, and the knob or lever is adjusted accordingly.
Unfortunately, because there are a vast number of things happening at once, cause and effect are all but impossible to discern. What gauges should we use to determine the effects of our actions? Should the Fed adjust the money supply based on M1, M2, MZM, the price of gold, the Consumer Price Index? Say we choose the CPI, what should be included in the index’s “basket of goods”? Food and fuel have been removed from the basket. Was this the right decision? How do we know?
Once we’ve chosen the gauge, how confident are we that we can “read the dial” accurately? How often have we heard that some previous quarter’s growth numbers have been adjusted up or down? What about time lag? We didn’t learn that the recession had ended until some 15 months after the event.
Without timely, accurate, meaningful data we have no effective feedback loop. Without a feedback loop, attempts to “fine tune” a nation’s economy are more likely to make things worse than better.
The virtue of Russ’s ideology (model) is that it acknowledges our limited ability to control complex systems that we do not fully understand.
Russ,
This is an excellent post that I have been waiting a long time to find. I’ve been looking for it. This is often how I feel in political arguments, but didn’t have the eloquence to express it.
I remember hearing a news story recently about how the particle collider in Europe may have recorded particles traveling faster than the speed of light. The response from themselves and other scientists was something like, “It’s probably not true, but we’ll test it to make sure. It would be really important if the results were accurate, but we doubt they are.”
In this, they basically admit their own bias and demonstrate the correct attitude to overcome it. They seemed eager to find out whether or not they are wrong. This is not an attitude I see in economist’s blogs. Nor is it common in political discussions. The difference is that scientists can be disproven (in fact, that is the point of science), and therefore have their status lowered by making definitive claims that are proven wrong. In the Social Sciences, very little can be proven. Status is gained by winning arguments. Therefore, most of the time is spent on proving something is correct instead of trying to disprove current theories.
Oh, and the reason that the scientific community is so skeptical of the findings is because of their belief in the work of Einstein and others – their ideology of physics.
Ohhh, Krugster.
“Liberals want government to do certain things, like provide essential health care; the size of government per se isn’t the objective.”
Perhaps, but it’s the end result. And you know this. And we know this. Which is why we are against it.
It’s like saying “I need money so I’m going to the bank to take out a loan. Going into debt isn’t my objective, per se”…. of course not. Going into debt is no one’s objective. But it’s the end result.
Krugman just revealed something about himself and all libtards: “Let’s all do stuff that seems good and not worry about the consequences!”… After all, stealing from producers isn’t the objective per se…. Trampling private property rights isn’t the objective per se… Rationing health care isn’t the objective per se…. Dwindling consumer choice and individual liberties isn’t the objective per se.
Krugman, you really are something else.
One thing I also notice about Krugman and most Keynesians is that they avoid moral arguments, whereas Austrians base most if not all of their ideology on the moral argument. The most important thing to an Austrian is liberty. The fact that liberty and free markets work better are more of a secondary view, but a view which strengthens the viewpoint no less. Put simply, we have more faith in humanity and our fellow man when people are left to their own devices than do the collectivists.
Oh, I’m sorry Mr. Krugman. I know Keynesianism and collectivism aren’t one and the same, because collectivism isn’t the objective of keynesianism. But it is the end result.
One thing I also notice about Krugman and most Keynesians is that they avoid moral arguments,…
I noticed too. But it works for robbers.
If the Keynesian model were accurate, every Keynesian economist would be a billionaire because they would make a fortune trading currencies and futures, trading which is very macro based (but, of late, is much more based on what actions government may or may not take… As a buddy of mine who trades for a hedge fund said to me the other day “Throw technical analysis out the window. It’s complete bullshit in a time like this. No one knows what government is going to do. Merkel could tank the Euro tomorrow with one sentence. Bernanke or Obama could do the same with the dollar. Or Obama could release more oil from the strategic reserve. Nobody knows. Well, the politically connected ones know, and they’re the ones who are winning on The Street”).
But I see very few billionaire economists. I do see many billionaire hedge fund managers who try to influence public policy in a way which will benefit them, like George Soros.
Throw technical analysis out the window. It’s complete bullshit in a time like this.
Is there at time when technical analysis is not complete bullshit?
Well, you’re right about that. I’ve never used it. I know a lot of people who have gone away from it. I think the smarter traders use it inasmuch as they know other people may make decisions based on it.
Hey Russ,
I’ve always been impressed with the way you confess your bias, which I share by the way… In fact, you have helped (been thinking on it for awhile) inspire me to replace the tagline on my blog (currently; “an objective financial world perspective”)… Here’s an excerpt from an essay of mine that speaks to this topic: Keep up the great work Russ!!
Truly each of us has a bent; mine toward capitalism. Therefore as I effort to convince you of the efficacy of a free market relative to the alternative, my objective is doomed to no small degree by my lack of objectivity. I’ll therefore narrow my argument down to a simple question (and forget economics for the moment):
Would you prefer to live in a world where a paternalistic government determines who wins, who loses, who pays, who survives the inevitable recession (in support of the greater good [as it determines] or a politically influential organization) and in effect perpetuates the existence of poorly managed institutions – or – would you prefer a world where a free market determines the winners and losers, where individuals and institutions succeed or fail based on the value they deliver to one another, and on their ability to efficiently manage their affairs?
Jesus said that few people find truth because they don’t want it. He was referring to religious truth, but I have found it applies to any field.
Public relations research will tell you that people decide what they want to be true and then look for evidence to back up their decision. Empirical evidence rarely changes anyone’s mind because everyone puts a higher hurdle for proof in front of the opposition than in front of supporting evidence.
Finding truth in any field requires a unique state of mind. One has to arrive at the state in which one really doesn’t care about the outcomes of the investigation; one only wants the truth. Very few people can accomplish that.
I found it funny it when Krugman calls Russ a conservative…also, his discussion over the size of government is devoid of any opinion. What exactly would he call massive increases in government spending and regulations if not an increase in government?
“Think about it: while you often see conservatives crow about, say, reducing discretionary spending as a good thing just because the number is down, do you ever see liberals crowing about a rise in spending, never mind what on?” –Yes.
But I’d go one step further … both political parties today (liberal/conservative … democrat/republican) spend, spend, and spend some more. It’s few and far between to find a politician who cut’s their budget and spends less, or even the same, as the prior year.
Also, my studies are better than your studies. I can’t demonstrate that fact with repeatable results, so just trust me.
When have conservatives *ever* reduced discretionary spending?
I wonder if the model for economics shouldn’t be something like geometry, as opposed to the hard sciences.
Euclid created a complete system of geometry that was derived from his 7 postulates. Other mathematicians have generated different geometric systems by changing one or more of the original postulates. The non-Euclidean geometries are just as logically consistent as Euclid’s system.
Keynesian economists can construct disciplined and convincing models with very specific and compelling conclusions. Austrian economists can do likewise and their conclusions might be exactly the opposite.
Perhaps, in addition to modeling multipliers and the like, economists should create an epistemological framework to describe the departure points for economic arguments.
really interesting discussion,
Tim
The difference being that the compelling Keynesian models lead to national bankruptcy.
“It suggests that we are unable to measure the impact of the government on the economy with any precision.”
What we need is a control group. Let’s pick a state to go anarchist and see what happens.
Mexico
Krugman makes the excellent point that this isn’t an issue with Russ per se, but rather with “conservatives.” Conservatives are clearly just degenerate ideologues who all believe believe the world is flat, the globe is cooling, evolution is a myth, and that we should have smaller government despite the fact that they know they’re wrong. Russ was just exposing conservatives as lesser people and now that we all know it, we can ignore their opinions forever.
From the Krugman response to Russ Roberts first critique:
“do you ever see liberals crowing about a rise in spending, never mind what on? Liberals want government to do certain things, like provide essential health care; the size of government per se isn’t the objective.”
If one can not see the disingenuous wording and idea expression there, then God help me, you have no intellect, no education, and no experience.
First off, liberals rarely crow about increases in government spending because when an increase happens, they immediately begin belly aching about how it was too little too late and that more is needed, and I think Krugman knows this well.
Liberals want government to do certain things like provide essential health care, never mind that there is no reason why government should do that; plus Krugman knows full well that to provide essential health care government has to expand its role in an even more intrusive way in the daily life of each individual. Which makes a lie of his claim that the size of government is unimportant, government can’t do the things the looney left wants it to do without expanding in size and power, and only an idiot would make the claim that that is not true.
Yet he says he isn’t an ideologue, and DK is right there with him.
Dr. Roberts,
You are an outstanding interviewer and your self awareness of uncertainty helps you do your job even better. I suggest however, your correctness that bias has a huge role in peoples views will not change many peoples bias. I see it everyday in many facets of life of people using positions and emotions to get what appears to be in their self interest. The blinding light of what is in peoples self interest is likely to over power your pointing out any bias.
Your example of executing your work by using your insight seems to me much more important than pointing out that the Emperor has no clothes.
I think Krugman just proved and/or missed Roberts’s point. Maybe I just misunderstood him. I think what Roberts’s was trying to say is that Krugman rarely signals the fact that he considers/respects apposing viewpoints, leading one to believe that he might not. I think what Roberts was trying to say is, “All economists are biased = Roberts is biased = Krugman is biased. So, just admit it.” Krugman’s response is, “No I’m not.” This may be true, but that seems unlikely. If it is true, he should argue that economists can obtain high levels of objectivity, not just himself.
Krugman speaks with high levels of confidence that would be warranted only if the policies he suggests imposing on other people would truly make me and every other American better off. My opinion is that they wouldn’t. Others believe that they would. Maybe I’m just stuck in the “Dark Ages” – an ignorant fool that was had by the likes of Roberts and Co. But I think it’s what the difference implies that has me most worried.
I’m shocked that Paul Krugman would actually acknowledge a competing economic theory or another economist that doesn’t totally agree with him.
“Krugman is a Keynesian because he wants bigger government. I’m an anti-Keynesian because I want smaller government.”
My guess is what Dr K wants is security, and what Dr R wants is Liberty.
Security is not just police action, but security in healthcare, retirement income, unemployment benefits and other “free” stuff. He sees government as the guarantor of this “security.”
Liberty, both social and economic does not require government. In fact, the national government is the biggest threat to this liberty. Small government requires less resources from individuals, will pose less regulations and restrictive legislation. But what if government could grow without becoming a burden on it’s citizens? Say other rich governments voluntarily paid tribute to our national government for pirate protection on the high seas, or for nuclear deterrence through a retaliatory treaty. Then government could become bigger, without placing a further burden on Dr R or his liberties. My guess he would not object to this.
Now lets say a Gates and Buffet set up a private foundation to provide the security of old age and health. Would this satisfy Dr K’s desire for security, or would he change his demands to more free stuff?
I am trying to think, but nothing happened.
Oh, and its cute that Matt Yglesias blogs on economics with his B.A. in philosophy.
Is it ideology or conviction?
Convictions save us a lot of time thinking about each issue. We don’t have to reinvent the wheel or begin explaining our entire thought process every time a question comes up. We’ve been there, done that.
Just for the record, the macroeconomic science of several left wing leaders of the British Labor party was Hayekian in the 1930s and 1940s ..
At the LSE Hayek taught science, he didn’t teach politics. And his students were from all sorts of ideological backgrounds.
They picked up Hayek’s science, whatever their political emotions & loyalties.
Many of Hayek’s most influential students were left of center, e.g. Lerner, Hurwicz, Kaldor, and many others. And a number of them picked up Hayek’s macro, while remaining on the left & members of the Labour Party.
So I’m trying to figure this thing out, as best I can. If you’re not, we’re not in the same business.
LOL! Wow. I believe this is known as projection.
There is definitely something wrong with the “psycho-epistemology” (to use a Randian term) of Keynesians. They admit there’s no empirical evidence their model works, but that never stops them from attempting more predictions. When they fail — as they always do and always have — it’s never the model that’s at fault, but the previous modeler: “if only Samuelson had known about this one relationship that’s so clearly drawn on my chart, he would have been right!”
There’s actually no arguing with this sort of compartmentalized mentality. Psychologically, it’s like Marxism and Freudianism: everything is seen by their advocates as confirmation of the theory, nothing can disprove it even in principle, and when it fails a prediction test, it’s because some fact must not have been known sufficiently well, or some theoretical assumption consistent with the theory had yet to thought of>
At worst, this is psychological denial; at best, it’s the construction of endless ad hoc excuses for the sole purpose of protecting the core assumptions of the theory. Popper is quite clear on the matter: that’s the time to think about throwing out your theory and adopting a better one.
Dr. Roberts is way too modest comparing himself to Krugman.
For what it worth, reading Dr. Robert’s writing you can see an honest, thoughtful person, even if sometimes biased, and sometimes taking small shortcuts in his arguments, never self-rightious, and fully aware of his failings.
Reading Krugman is like reading editorials in Pravda in the mid 80th. There is a trick in every sentence, every word is dishonest, circular logic is in abundance, doublespeak is in overdrive. I try some times to read his columns, but it is so physically painful to do (childhood trauma from being exposed to soviet propaganda I suppose), I usually manage only to glimpse through before I start gasping for fresh air.
Luckily Cafehayek is only a click away!
I couldn’t agree more. You see it here as well in the comments from our visiting trolls.
It was why from the very first day Daniel Khuen earned his nickname, Disingenuous Khuen, same lies as Krugman, same disingenuousness, same circular debate style, doublespeak, and as time unfolded and DK devoutly defended Krugman, no matter how outrageous Krugman was, it became quite evident where DK’s political beliefs lie. Though DK just adamantly denies embracing socialism, it just so happens he also says there is a lot of good in it. Disingenuous to the max.
“Macroeconomics is to microeconomics as astrology is to astronomy.”
There should be some attribution to that quote, but I don’t know who to give it to. I would like to know — because I agree with it.
“An ideological movement is a collection of people many of whom could hardly bake a cake, fix a car, sustain a friendship or a marriage, or even do a quadratic equation, yet they believe they know how to rule the world. The university, in which it is possible to combine theoretical pretension with comprehensive ineptitude, has become the natural habitat of the ideological enthusiast. A kind of adventure playground, carefully insulated from reality in order to prevent absent-minded professors from bumping into things as they explore transcendental realms, has become the institutional base for civilizational self-hatred.”
― Kenneth Minogue
+1
Government spending is no more one dimensional than capital (or labor). As Hayek explains in one of his books, government spending on roads is possibly sensible in in-town area (where tolls are too difficult/costly to collect) whereas private toll roads are more likely sensible in rural areas where limited access occurs. Similarly Hayek argues most vigorously against education subsidies for vocational training. The components of G may be possibly be studied scientifically, but unqualified studies of G are scientism.
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