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Quotation of the Day…

… is from page 27 of my late colleague Jim Buchanan’s 1979 paper “General Implications of Subjectivism in Economics,” as this paper is reprinted in Economic Inquiry and Its Logic (2000), which is volume 12 of the Collected Works of James M. Buchanan:

Indirectly, however, and in opportunity-cost terms, the empirical-nonempirical debate is of importance.  The young and aspiring economist who becomes the expert empiricist has necessarily sacrificed training time in learning more about the process to which his highly polished technical tools are to be applied.  These gaps in the training of modern economists are beginning to show up in many forms, not the least of which is the deadly dullness that dominates whole departments in many universities and colleges.

DBx: Someone can possess nearly god-like mastery of econometric techniques and still be a poor economist (or worse).  At the heart of economics, done correctly and productively, are habits and patterns of thought – namely, the economic way of thinking.  There lies, for example, the professional instinct incessantly to ask probing questions (above all, “As compared to what?”); the recognition that reality is always far more complex in its details than even the most detailed ‘model’ can possibly capture (and yet the understanding that that reality is comprehensible only through the lenses of well-crafted models or theories); and the stubborn insistence on consistency (such as the sound economist’s refusal to regard human and institutional imperfections as infecting only human interactions that occur in non-political settings – such imperfections also infect human interactions that occur in political settings).

Wow me all you want with your econometric wizardry and prodigiousness at digging up, assembling, and processing data.  If you fail to exhibit the economic way of thinking, you are no economist in my book.  Unless they are filtered through, and assessed according to, the economic way of thinking, all of your numbers and correlations, no matter how high those correlations might be, tell neither you nor anyone else anything of value.