My Alzheimic profession

Robert Waldman (who is unpleasantly aggressive and arrogant in his comments, but I digress) shows how Friedman’s contribution to the idea that the Phillips curve would change as expectations changed wasn’t much of a contribution at all. It was all in Samuelson and Solow – only better – in 1960. Attribution of the idea that expectations influenced the Phillips curve to Friedman was due to some fancy marketing by him – and I’d add, by the extreme ‘thinness’ of the discipline. Units of thought appear as formal papers which then stand in the profession’s collective memory as stick figure caricatures of their real content.

Here’s Waldman:

To be clear, I think that on the day he died, Friedman’s thought had not reached the level of scientific validity of Samuelson and Solow 1960.


This happens all the time. Paul Krugman recently posted an excellent write up he gave of his career and how he works.  But one thing that I think is distinctly non-excellent about it is that it rehashes Krugman’s complacency about his own profession:

The point of my trade models was not particularly startling once one thought about it: economies of scale could be an independent cause of international trade, even in the absence of comparative advantage. This was a new insight to me, but had (as I soon discovered) been pointed out many times before by critics of conventional trade theory. The models I worked out left some loose ends hanging; in particular, they typically had many equilibria. Even so, to make the models tractable I had to make obviously unrealistic assumptions. . . . I was, of course, only saying something that critics of conventional theory had been saying for decades. Yet my point was not part of the mainstream of international economics. Why? Because it had never been expressed in nice models. The new monopolistic competition models gave me a tool to open cleanly what had previously been regarded as a can of worms. More important, however, I suddenly realized the remarkable extent to which the methodology of economics creates blind spots. We just don’t see what we can’t formalize. And the biggest blind spot of all has involved increasing returns. So there, right at hand, was my mission: to look at things from a slightly different angle, and in so doing to reveal the obvious, things that had been right under our noses all the time.

It doesn’t occur to Krugman to say that a discipline that makes invisible important and obvious aspects of the complex reality it is seeking to investigate might do more harm than good and that it might be better to try to fix the problem at source – ie to have a more pluralistic discipline.

Another example of forgetting is Akerlof’s Market for Lemons. The market for lemons is an obvious idea. Indeed it’s so obvious, that as Akerlof himself mentioned in the article, it’s an extension of an idea that for whom Sir Thomas Gresham is famous even though the idea itself – that bad money drives out good – had been around a good while before Sir Thomas came up with it in the sixteenth century. Copernicus mentioned it as did Aristophanes. Anyway, it was taboo and, because economists didn’t do that kind of thing, Akerlof couldn’t get his paper published without quite a struggle – like Krugman and his simple and silly trade models.

And did Krugman’s trade models help get us far beyond re-introducing something that was important, obvious and ignored? Not according to him who described the upshot of strategic trade theory as disappointing. Funny about that. Of course it could never have been predicted that formalising complex phenomena by simplifying them with silly assumptions sufficiently to become tractable in simple models might have sufficiently degraded one’s purchase on reality to not be very useful.  Oh well, at least we can discuss the obvious again. Rather like where we were from Marshall to Hicks.


This entry was posted in Economics and public policy, History. Bookmark the permalink.
Notify of
Newest Most Voted
Inline Feedbacks
View all comments
Richard Tsukamasa Green

Whilst I’m sure that the problem (which I feel all to strongly) is deeper than this, I think an alarmingly large part might be just the result of how we cite – and more broadly the cargo cult peer review of the journal system which creates elaborate rituals around peers and reviewing whilst missing the whole point.

But I digress as well. Citation.

In economics we’re wedded to Harvard citation, and papers, rather than footnotes and books and other sources. That means that if I write “The blueness of sky has been demonstrated (Bloggs 2007)”, citing every statement because That’s How Things Are Done, I feel, and my readers, and probably anonymous reviewers protecting the sanctity of the rituals, that Bloggs (2007) is all about blueness of sky. Subsequently I better find the paper whose abstract declares it is dedicated to sky colouration, with a conclusion that it is blue. This is great for Bloggs, who gets tenure with easy citations, and can use his ample, unfrazzled time, to edit journals and maintain the order of things.

But if we were using footnotes, like those unspeakable creatures in the humanities, the authors, forced to include a reference because That’s How Things Are Done, could much more find the idea in a larger work. “Rodriguez, 1934, pg. 89”, “Grose, 1756, pg. 143”, “Xiang, 356 BC, scroll 3”, “Shin-eqi-unninni, 1342 BC, tablet 8” etc. Authors happy enough not to have a work devoted to a single idea.

So I would object to the statement that units of thought are frozen as papers. They’re frozen as abstracts. And they’re frozen because we’ve drilled into our practice a set of arcane ritual where the relevant pieties must be paid to their names, divorced from any path to understanding.

Fun fact, everytime I think about going back to uni, I read Titus Groan. Works every time.

Mike Pepperday
Mike Pepperday
8 years ago

Richard, I don’t see it matters whether Harvard or footnote. It is a matter of putting a page number. The social sciences usually use Harvard and you can write Bloggs (2007:23). In political science that is normal. In psychology it is as in (apparently) economics – it’s not the done thing. I agree with you about its pernicious effects.

8 years ago
Reply to  Mike Pepperday

That’s correct for psychology Mike — indeed, for most journals you are actually told to keep footnotes to a minimum. However, there is now a big trend where you stick stuff in Supplementary materials so the papers are generally shorter (vs. having Appendix A to Z).

8 years ago

That’s fascinating Richard. Law is almost exactly the opposite in that one tends to cite almost down to the paragraph or even sentence, or even (it’s not a joke) to the choice of footnotes.

I never thought about how this might shape legal thought. Someone older than me should have a view, because this isn’t how it used to be. Law writing, particularly judgements, used to be much more Hardard-esque.


Julie Thomas
Julie Thomas
8 years ago


“Of course it could never have been predicted that formalising complex phenomena by simplifying them with silly assumptions sufficiently to become tractable in simple models might have sufficiently degraded one’s purchase on reality to not be very useful.”

That is very good and is true of psychology also, I think.

Both psychology and economics began as disciplines that accepted the assumption that the ‘wealthy white male’ was the high point of evolution and that this type of person was rational and knew all that humankind needed to know about itself. Economics took this as a given, never has questioned it and is still having difficulty processing the evidence that it isn’t so.

Psychology, also only done by wealthy white men, was supposed to ‘prove’ that wealthy white men were the default human. But this didn’t happen. Much as psychology tried, the evidence was not there. But of course there are some people in psychology who are still trying to show that there are racial and gender differences that render one category of person more valuable than the others. It isn’t going well for them.

So psychology lost it’s certainty early on and has been, and still is, ‘all over the place’ with lots of ‘fluffy’ ideas and just-so stories, and economics is sticking with one just-so story that isn’t true.

john r walker
8 years ago

Does economics use chaos theory ?