Economics imperialism and its discontents

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Flyer for George Stigler’s 1984 lecture, ‘Economics – the Imperial Science’. Reproduced in: E. Nik-Khan and R. Van Horn (2012) ‘Inland empire: economics imperialism as an imperative of Chicago neoliberalism.’ Journal of Economic Methodology 19(3): 259-282.

In his widely-read blog, Noah Smith has a post today entitled, rather bluntly, “A new age of econ imperialism is coming.”

While not quite as triumphal as the title makes out, the thrust of his post is plain enough: economics will continue to try and invade and occupy the other social sciences.

Much of the discussion about econ methods these days revolves around the “credibility revolution”, and the broader rise of empirics in general. Despite scattered protests from various quarters of the discipline, there looks to be no stopping the transformation of econ into an empirical, evidence-based field.

But the shift isn’t just healthy – it’s also a golden opportunity for economists to do what social scientists love best, which is to go on a giant raid and conquer the other social sciences! The new empiricism is the amphibious assault ship that will carry hordes of Econquerors (heh) to the vulnerable shores of sociology.

 

Leaving aside Smith’s colourful and amusing language, there seems little doubt that he is expressing a pretty common trope in the attitudes of many economists towards the other social sciences. This is the view that economics, equipped with superior tools of mathematical and empirical analysis, is simply better than the social sciences it might supplant.

The view is at least half a century old. As Edward Nik-Khan and Robert Van Horn point out in a 2012 paper for the Journal of Economic Methodology [19(3): 259-282], prominent economists, particularly from the Chicago school, have long seen the other social sciences as fertile territory for the application of neoclassical methodologies.

In 1972, the founder of public choice theory Gordon Tullock wrote an article actually entitled “Economic Imperialism” in his house textbook, Theory of Public Choice. Tullock thought imperialism was a good thing; in the article, he called for the ‘invasion’ and ‘reorganization’ of the other social sciences.

In 1984, another Chicago boy, George Stigler, gave a lecture to Wabash College, entitled “Economics – the imperial science?” [reproduced in Stigler, G. J. (1984). Economics–The Imperial Science?. Scandinavian Journal Of Economics, 86(3), 301.] In the speech, Stigler canvassed the growing influence of neoclassical economics in fields such as law (Coase, Director and Posner), politics (public choice theory advanced by Buchanan and Tullock) and sociology (Becker).

In more recent times, we’ve seen the rise of the Freakonomics phenomenon, which again purports to use economic tools to study supposedly misunderstood backwaters of the social sciences. I hadn’t realised this, but Nik-Khan and Van Horn do a great job explaining why Stephen Levitt, the champion of Freakonomics, was himself heavily influenced by the Chicago school; in fact, he even studied with Becker as a post-doc at the University of Chicago. In summary, as Ben Fine and Dmitris Milonakis argue in a 2009 monograph, economics really has tried to invade and colonise the other social sciences, particularly sociology.

There is of course considerable controversy about how successful the economics invasion has been. Becker’s work on marriage markets and family economics has been highly contested in subsequent research (not least by Michel Foucault); Levitt faced plenty of criticism for his claims about abortion and global warming.

Let’s return to Noah Smith for a moment. Why does he think economics is poised to launch a new invasion of the social sciences?

The new econ imperialists will succeed where the first wave mostly failed, because they’re armed with better weapons. Back then, it was basically a war of theory against theory, and the fights looked like:

Economist: [optimization model no one except economists understands]

Sociologist: [slew of jargon no one except (possibly) sociologists understands]

Public: Hmm, let me go with my political priors on thi – Hey, look, CNN is talking about Monica Lewinski! Sorry guys, gotta go.

Now, when empirical economists come with actual evidence, sociologists will be in a bind. See, the public doesn’t get theory, but it gets empirical results. “X causes Y” is easy to understand, even for the most distracted of university administrators or Quartz columnists. That means empirical economists will soon be treated as experts on sociological topics.

In order to rebut economists, both in the public sphere and in the court of their own intellectual consciences, they will either need A) empirics of their own, or B) a good understanding of empirics AND the ability to clearly explain their own theories in order to use theory to question economists’ interpretations of their results.
Sociologists will have at least two barriers to doing this. First, many sociologists aren’t nearly as proficient at stats and math as economists. That’s not a huge problem, because Credibility Revolution techniques are actually not nearly as hard to learn as stuff like structural econometrics or Bayesian time-series methods. So sociology will have to beef up its grad students’ quant skills, but it’s hardly an insurmountable task.
Second, sociology is much more closed-off than econ, since few sociologists publish working papers. Soc is going to have to become a lot more open if it’s going to hold off against the coming econ onslaught, both in the court of public opinion and in the general intellectual world.
Even if sociology does this, it’s going to have another problem – many sociology theories will be found to be “not even wrong”. As empirical evidence becomes the gold standard for social science arguments, jargon-heavy non-mathematical theories will just be less and less useful. That’s probably going to make some soc theorists even angrier than it made econ theorists – at least econ theories, being quantitative, can often be tested with data.

 

There are (I think) two main points Smith is making here, so let’s unpack them.

  1. Economic tools (or at least quantitative tools employed by economists) are superior at interpreting evidence. He lists quantitative and statistical methods like “regression discontinuity, difference-in-difference, synthetic controls”.
  2. Sociology is full of non-quantitative theory, and therefore its evidence is not falsifiable in the Popperian sense, or at least is not very rigorous when compared to the kind of empirics economists are likely to advance.

Claim 1 is contestable, at the very least. I have no issue with the quantitative methods — my undergraduate degree was in science. But it seems to me a long bow to draw to argue that numbers are the only way to study the social sciences. In fact, some aspects of the social sciences will never be reducible to quantitative evidence, for the simple reason that some social phenomena are not measurable in the first place. Sure, you can model the strength of weak ties or the marriage market of single Americans, but there will always be some social entities and social relationships that are not reducible to quantities. I would nominate things like ‘power’, ‘kinship’, ‘race’ and ‘the state’, with appropriate scare quotes, as social entities that cannot easily (or even feasibly) be reduced to numerical micro-foundations.

No doubt economists will come along and study them (it’s not as though sociologists and historians haven’t done so before, using data). But given the glaring problems macroeconomics still has basing its theory on microfoundations, it seems to me there will always be some social entities that remain irreducible, unmeasurable and unquantifiable.

Claim 2 is more robust, but equally doubtful.On one level, Smith is simply making a point that would seem entirely familiar to students of the philosophy of science and the sociology of knowledge. The short reply to Smith here is: maybe, maybe not. No-one can know, because these are judgments that can only be made in retrospect. Scientific work is done; some schools prosper, while others wither. As Imre Lakatos pointed out in the 1970s, research projects progress or degenerate, (and I’ve linked to Ian Hacking’s long exigesis of Lakatos’ work, it’s amazing, read it!). The only just verdict of posterity is after the fact.

Perhaps the tanks of neoclassical analysis will indeed roll into the social science marchlands. Or perhaps sociology will re-establish its dominant mid-20th century position. But only time will tell.

 

 

 

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