The Invisible Hand in Economics - N. Emrah AYDINONAT

]]> The paperback edition of The Invisible Hand in Economics: How Economists Explain Unintended Social Consequences (Routledge) is available from Amazon.com.

The Invisible Hand in Economics - N. Emrah AYDINONAT

]]> http://www.neaydinonat.com/blog/?feed=rss2&p=493 0 http://www.neaydinonat.com/blog/?p=490 http://www.neaydinonat.com/blog/?p=490#comments Thu, 14 Jan 2010 23:32:06 +0000 N. Emrah Aydınonat http://www.neaydinonat.com/blog/?p=490 Here is Doug Mackenzie’s formulation of Catch 22 for HET at the SHOE list:

“That is a catch 22: they must believe that HET leads to pubs in top journals, but top journals will not bother with HET unless most economists see it as important. Of course, HOPE and JHET are good hits for any economist, so long as [...]]]> Here is Doug Mackenzie’s formulation of Catch 22 for HET at the SHOE list:

“That is a catch 22: they must believe that HET leads to pubs in top
journals, but top journals will not bother with HET unless most
economists see it as important. Of course, HOPE and JHET are good
hits for any economist, so long as they have hits in mainstream
journals, but HET is at best optional for most economists. Another
avenue is teaching, its pretty common for mainstream economists to
babble about how Arrow and Debreu formalized Smith’s conjecture or
how Keynes converted everyone in the universe to his view in less
that ten minutes, and they look foolish to anyone who knows HET.
Trouble is that they mostly preach this nonsense to those who know no
better, so there is no embarrassment factor. How then can the
foolishness of knowing virtually nothing about the history of ones
own alleged area of expertise be made apparent? How can we make the
feel as foolish as they are?” (Source)

I especially like the second part.

This was a response to a post which was reporting that at least three distinguished professional economists (full professors) did not know about Frank Knight. You are advised to read the entire tread.

conference organisers: Harro Maas & Mary Morgan

The annual HOPE Conference in 2011 will take place in late April or early May of that year, and the topic for the meeting will be the history of observation in economics (see discussion below). We invite expressions of interest and initial ideas for papers [...]]]> “A history of observation in economics”

conference organisers: Harro Maas & Mary Morgan

The annual HOPE Conference in 2011 will take place in late April or early May of that year, and the topic for the meeting will be the history of observation in economics (see discussion below).

We invite expressions of interest and initial ideas for papers that might be developed in discussion with either of the convenors, and/or written paper proposals of 300-500 words to which they will respond: please email h.b.j.b.maas [at] uva.nl and/or m.morgan [at] lse.ac.uk.

About the conference: By tradition, this is a small “invitation only” conference, where a small number of papers from an open call are accepted and all discussion of papers is in plenary mode. These papers are then put through a normal refereeing process for consideration for publication in the Annual Supplement to the journal History of Political Economy (HOPE) for 2012. (In other words, acceptance of a paper at the conference does not guarantee publication in the supplement, only consideration for publication.) The conference is a 2-3 day meeting, where conference funds usually cover participants’ hotel costs and meals, but only rarely their travel costs.

Recovering the lost history of observation in economics:
The aim of the 2011 HOPE Conference is to recover/uncover/investigate the now lost history of observation in economics.

Observation is ubiquitous in economics, but has become completely eclipsed from its history. After the rise of statistical thinking in the nineteenth century, and the econometric revolution in the nineteen-thirties, economists, methodologists and historians of economics came to identify “observations” with the statistical data sets that were gathered by statistical bureaus all over the world. These data sets – pre-recorded by others – served as inputs for economists’ models and the testing ground for theories, and so these measurements came to be considered as the “observations” that economists work with. This state of affairs fits well with the mid-twentieth-century emphasis in the philosophy of science on observational statements, rather than on the process of observing itself, just as it fits economists’ emphasis on measurement, quantification and testing. But it makes the multifarious practices and techniques (political) economists have used and do use to observe the world vanish from view. It prevents an understanding of the (changes in) observational practices that can be witnessed not only in the past, but also at present.

From an historical point of view the idea that the observations of political economists can be identified with statistical (quantified) data is far from obvious. Most famous perhaps are Adam Smith’s observations of the working of the pin factory (probably taken from secondary sources such as the French Encyclopédie) that informed his analysis of the division of labour. Marshall made field notes of conversations with politicians, businessmen, and working men – the kind of observations made famous by Walter Bagehot’s Lombard Street – and these notes were somehow translated into his diagrams and theories of long and short term markets and international trade. Ronald Coase’s famous paper on transactions costs was amongst other things motivated by his experiences observing American industry. Because of the difficulties economists like Phyllis Deane and Wolfgang Stolper experienced in forcing statistical data from colonial and post-colonial Africa into the mould of Stone’s system of national income accounts, they travelled there to observe and ask local inhabitants about their economic ways of doing.

Contemporary discussions about the importance of “real time data” for economic modelling and policy, show the economist’s awareness that there is a gap between the recording and what the recording intends to express. The renewed popularity of surveys and questionnaires to gather information, the still very recent rise of game theory and the laboratory as new tools and sites to investigate markets and to produce “evidence”, the introduction of spectacular new visualising tools like the fMRI-scan to observe individuals, the collapse of certain econometric forecasting techniques in the face of the current financial crisis, all press us to re-investigate our received understanding of what observations are in economics, and how practices of observation changed through history.

Possible themes that might be addressed by papers for the conference include:
- Observation at the interface between economists, policy makers and the public.
- Skills, tools and techniques of the observer
- Sites for observing (political economy club, statistical office, laboratory)
- Trusting local observers versus imposing central standards
- Purposes of the observer and ways of observing
- ‘Staging’: intervening in order to observe, observing in order to intervene
- Travelling, recalling and recording
We encourage contributions from different disciplinary backgrounds that enhance our understanding of the changing observational commitments of economists, government officials, travel writers, learned societies, official institutes and so forth. We aim at a conference and volume – a supplement to the journal History of Political Economy – covering a long time line, and a range of different media, sites and geographical areas.

Before you [...]]]> Previously I have announced that we (Uskali Mäki and me) were organizing a special session on pluralism and heterodoxy in economics at the EAEPE 2009 conference in Amsterdam. If you missed this event, you may still get a taste of it below. (You are especially missing the lively and fruitful discussion at the end.)

Before you proceed please note that a rather strange comment concerning this session appeared in the Heterodox Economics Newsletter. The editor of the newsletter Fred Lee makes the following comment concerning the session:

“There was also a session on pluralism and heterodoxy in economics. Themes, comments, and feelings that emerged from it included the notion that pluralism should not be considered an important value for economists because it offended mainstream economists; that heterodox is a term that should not be used and that economists should not identify themselves as heterodox economists; that young economists should not spend much of their time studying heterodox economics; and that graduate students from heterodox programs were not competitive enough on the job market relative to mainstream students. No heterodox graduate programs were named, but programs at UMKC, UM-Amherst, American University, New School, SOAS, Bremen, and the University of Sydney are the reference targets. A rather strange session where apparently the intent was to make heterodox economists and their graduate students feel unwelcome at EAEPE.“

EAEPE encourages pluralism and welcomes heterodox approaches. The special session itself was pluralistic. And no unified view emerged at the end of it. The discussion at the end was lively and was full of differing views on pluralism and heterodoxy in economics. The aim of the special session was to open David Colander’s views to discussion. And I think we have accomplished just that. Uskali Mäki, Geoff Hodgson and Dimitris Milonakis presented their comments and criticism concerning David Colander’s paper. Moreover, at the end of the session scholars such as Ben Fine made extensive comments on Colander’s views. For these reasons I do not understand how Fred Lee could say that  the sessions “intent was to make heterodox economists and their graduate students feel unwelcome at EAEPE.” Our aim was to discuss different views on pluralism and heterodoxy in economics, and David Colander’s paper was in fact a very good target paper for doing that. David Colander’s paper “Moving Beyond the Rhetoric of Pluralism” is available at EAEPE website and could be downloaded by clicking here. We are planning to publish the comments by Uskali Mäki, Geoff Hodgson and Dimitris Milonakis online (at the EAEPE web site) for future discussion.

For now, you could read Colander’s paper and watch the videos below and join the discussion.

David Colander’s talk at EAEPE Conference 2009 (8 November 2009, Amsterdam)

The talk is based on David Colander’s “Moving Beyond the Rhetoric of Pluralism”. The paper is available at EAEPE website and could be downloaded by clicking here.

Comments by Geoff Hodgson, Uskali Mäki and Dimitris Milonakis are below.

Geoff Hodgson’s comments on Colander’s paper:

And Uskali Mäki’s comments: (Sorry for the low quality of the video. This was filmed with a mobile phone.)

And finally, Dimitris Milonakis’ comments. (Note that this is only a part of the talk. The other half of the talk could not be recorded because of a technical problem.)

We are organizing a special session on Pluralism and Heterodoxy in Economics at this years EAEPE conference. The session will be organized around David Colander’s paper entitled “Moving Beyond the Rhetoric of Pluralism: Suggestions for an “Inside-the-Mainstream” Heterodoxy “. The discussants are Geoff Hodgson, Dimitris Milonakis & Uskali Mäki.

You may also [...]]]>

EAEPE 2009 Conference Venue

We are organizing a special session on Pluralism and Heterodoxy in Economics at this years EAEPE conference. The session will be organized around David Colander’s paper entitled “Moving Beyond the Rhetoric of Pluralism: Suggestions for an “Inside-the-Mainstream” Heterodoxy “. The discussants are Geoff Hodgson, Dimitris Milonakis & Uskali Mäki.

You may also be interested in the following sessions concerning Economic Methodology (Research Area A)

Saturday 7 November, 08h45-10h45 Research area A – Room: E0.03

• Chair: Ana Santos
• Hansen: The Stern review and its critics: Putting economics at work in an interdisciplinary setting
• Engelen: My way or the highway: Why economists should stop isolating themselves from other social scientists
• Wells: What kind of economics is Amartya Sen’s capability approach and where is it going?
• Chiusi: A two-tier structure for normative theory appraisal

Saturday 7 November, 11h00-13h00 Research area A – Room: E0.03

• Chair: Uskali Mäki
• Boland: Models vs. theories: a generation gap
• Martinez: Good predictions and bad policies? A critique of methodological instrumentalism in economics
• Boldyrev: Ontology of economics: an interpretive perspective
• Denis: Methodological individualism: some notes on orthodox and heterodox views

Saturday 7 November, 14h30-16h30 Research area A – Room: E0.03

• Chair: Bart Engelen
• Maki: One size does not fit all: scientific realism and disciplinary diversity
• Hirsch: Interdisciplinarity in the social sciences: the case of Williamson’s transaction cost economics
• Aydinonat: Interdisciplinary perspectives on the origin of money
• Stanek: Plurality of theories and its realist interpretation: the case of money

Saturday 7 November, 16h45-18h45 Research area A – Room: E0.03

• Chair: Thomas Wells
• Daemen: The cash value of performativity in finance
• Sappinen: Economics imperialism writ large – the reflexive impact of neo-institutional and organizational economics
• Santos: Choice architecture and design economics: theoretical implications
• Su: John Stuart Mill on political economy as a moral science: Reconsider the distinction between positive and normative economics

Sunday 8 November, 08h45-10h45 Research area A – Room: E0.03

• Special session: Pluralism and heterodoxy in Economics
• Chair: Emrah Aydinonat
• Colander: Beyond the rhetoric of pluralism
• Discussants: Geoff Hodgson, Dimitris Milonakis & Uskali Mäki

Sunday 8 November, 11h00-13h00 Research area A – Room: E0.03

• Chair: Jorma Sappinen
• Alierta: Technical change and wages in a (evolutionary) general system
• Gagliardi: Diversity in socio-economic systems: from unilinear to institutional views
• McMaster: Situating care and dignity in health economics.
• Klarl: Modelling the folk theorem of spatial economics: a heterogeneous regional growth model

More info at http://eaepe.org/

Also see: Barry Eichengreen’s piece.

—

Thanks to Greg Mankiw and Ceyhun Elgin [...]]]> You already know Krugman’s “How Did Economists Get It So Wrong?“. You may want to read the following:

• David K. Levine’s reply to Krugman
• Brad de Long’s reply to Levine

• Kocherlakota’s reply to Krugman
• Brad de Long’s reply to Kocherlakota

• John Cochrane’s reply to Krugman
• Martin Baily’s reply to Krugman

Also see: Barry Eichengreen’s piece.

—

Thanks to Greg Mankiw and Ceyhun Elgin for the pointers.

Here is how the review starts:

“This is a splendid book about a controversial concept in economics…“

Latest issue of EJPE is full of interesting articles (once again). I especially recommend Jack Vromen’s “The booming economics-made-fun genre: more than having fun, but less than economics imperialism“. It is a must read.

“[...] the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. [...] When it comes to the all-too-human problem of recessions and depressions, economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work [...]]]>

Photo source: Wikimedia Commons, File: 800px-Financialcrisisconsumerspendings.JPG

“[...] the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. [...] When it comes to the all-too-human problem of recessions and depressions, economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly. The vision that emerges as the profession rethinks its foundations may not be all that clear; it certainly won’t be neat; but we can hope that it will have the virtue of being at least partly right. “

These are Paul Krugman’s words. You may read the full article here.

The question is the following: Will philosophers of economics come to the rescue?