The latest in economics exceptionalism

January 29, 2013
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(This article was originally published at Statistical Modeling, Causal Inference, and Social Science, and syndicated at StatsBlogs.)

Joseph Delaney writes:

Is it fair to quote the definition of economics from the blurb for a book? If so, consider this definition in the blurb for Emily Oster’s new book:

When Oster was expecting her first child, she felt powerless to make the right decisions for her pregnancy. How doctors think and what patients need are two very different things. So Oster drew on her own experience and went in search of the real facts about pregnancy using an economist’s tools. Economics is not just a study of finance. It’s the science of determining value and making informed decisions. To make a good decision, you need to understand the information available to you and to know what it means to you as an individual.

So, when applied to a medical topic (like pregnancy) how does this differ from evidence based medicine? Should I be calling myself an economist?

None of this mean that Emily shouldn’t write this book. My own read on the alcohol and pregnancy angle is that the current advice does seem to be based on an excess of caution. But it seems odd to argue that being an economist is the key piece here. Jumping fields is fine and can often lead to amazing insights, but maybe we should call this shifting of fields what it is rather than expanding the definition of economics to make it less meaningful?

Indeed. The above quote is a step above “Thinking like an economist simply means that you scientifically approach human social behavior. . . .” or that economists “believe circumstances, not culture, drive people’s decisions,” but it still reminds me of my thought from a few months ago that economics now is in the position of Freudian psychology in the 1950s:

Back then, Freudian psychiatrists were on the top of the world. Not only were they well paid, well respected, and secure in their theoretical foundations, they were also at the center of many important conversations. Even those people who disagreed with them felt the need to explain why the Freudians were wrong. Freudian ideas were essential, leaders in that field were national authorities, and students of Freudian theory and methods could feel that they were initiates in a grand tradition, a priesthood if you will. Freudians felt that, unlike just about everybody else, they treated human beings scientifically and dispassionately. What’s more, Freudians prided themselves on their boldness, their willingness to go beyond taboos to get to the essential truths of human nature. Sound familiar?

Not all economists have this attitude, but I think even the economists with more reasonable interdisciplinary understanding benefit (and suffer from) the prominence of their field. Just as with Freudian psychiatrists in the 1950s, they’re at the top of the prestige scale, they’re showered with money, and they’re at the center of all sorts of national and international discussions. Like it or not, we all have to deal with them, and they have to deal with each other. Which is why you have an economist publishing a book on evidence-based medicine.

Just as the 1950s must have been an exciting time to be a Freudian, the 2000s must be an exciting time to be an economist.

P.S. Just to clarify: I’m not saying that economics is just like Freudian psychiatry in the 1950s, I’m just saying that the social position of the two fields is the same. As with Freudian psychiatrists in the 1950s, economists today are celebrated in the media, they are treated as authorities in all subjects, and they get paid well. To make these observations is not to say that the current high status of economics is inappropriate (or, for that matter, to say that the high status of Freudian psychiatry was inappropriate in the 1950s). I’m not making a statement about the validity of economics or the quality of the work in health economics; I’m making a (qualitative) sociological observation about the position of economics and economists in our public discourse.

P.P.S. Perhaps I should replace all instances of “economics” above with “microeconomics” or, better still, “pop-microeconomics.” On the other hand, just about all mainstream economists benefit from the rising tide of the prestige of the economics profession. Even if all you do is policy analysis or macro forecasting, and even if you cringe at statements such as Oster’s quoted above, you still get the benefits of the economics label. (And, as with psychiatry, these benefits are not entirely unearned. Our society certainly has a need for economics (both micro and macro) just as it has a need for psychiatry, and we can’t blame the practitioners in these fields if they can’t deliver everything that some promoters are promising.)



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