The superiors (are here to serve you)

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In a recent working paper which has received considerable play on social and other media (and is allegedly forthcoming in The Journal of Economic Perspectives next year), a sociologist called Marion Fourcade and two French economists (Algan, Ollion, the former a research fellow at the CNRS of the University of Strasbourg, the latter a prof of economics at Sciences Po, Paris), report an investigation in the “dominant position of economics with the social sciences in the United States.” (abstract). Its title is meant to be a “double entendre” (p. 2) although not every one might get it.

The claims made are:

  1. Vis-à-vis sociology and political science, economics is more insular in that it is more self-referential than its enumerated competitors.
  2. Vis-à-vis sociology and political science, economics is more tightly managed top-down, making dissent more difficult.
  3. Vis-à-vis sociology and political science, economists are materially better off because many of them work in business schools and engage in well-paid consulting activities.
  4. Vis-à-vis sociology and political science, economists are more individualistic.
  5. Vis-à-vis sociology and political science, economists are more convinced in their discipline’s “ability to fix the world’s problems.

Ad 1: Insularity

The authors try to establish this through analysis of citation data. Table 1 documents that the three “flagship journals” of the three disciplines (AER, APSR, and ASR) drew on citations from the top 25 journals in their respective disciplines about 40, 18, and 22 percent of the time. Researchers publishing in the AER referenced top 25 political science and sociology journals less than 0.8 % and 0.3 % of the time; those publishing in APSR and ASR referenced articles in the top 25 journals of other disciplines about 5 – 6 times more often. In absolute numbers that’s still little (about 1 out of 40 references). And of course, looking at flagship journals is only so telling. So the authors review some other references (p. 4) that suggest that about 80 of references in economics are within-field while the corresponding numbers for sociology and political science are about 50 and 60 percent, respectively. This seems to reflect a certain self-referentiality and it is in line with my observations although these numbers surely differ widely across areas.

The authors then argue, “As sociologists know well, this dynamic is characteristic of unequal situations: those in a central position within a field fail to notice peripheral actors, … [follows the obligatory Bourdieu reference]. Instead, they tend to rationalize power and inequality as a ‘just’ product of merit, … .” (p. 6) Well, maybe. But surely other explanations – such as economists sharing a stronger and more wide-spread belief in an integrated and unified framework of rational actors — are possible and the authors fail to rule them out.

Ad 2: Hierarchy

The authors then argue that the documented citation patterns reflect a top-down organization and management of the field. Quoting studies two decades old, they note that “scholars have long noted that top departments in economics exert a remarkably strong influence over the discipline’s internal labor market. … The flow of students [hires] between departments  … show that universities hire only from institutions that are ranked at the same level or higher. … This correlation between prestige and placement … is strongest in economics.” (p. 8) Well, it is quite possible that the findings by Conley & Oender — more on them in another CET contribution — will change this to some extent. These authors have also demonstrated that the link between pedigree of graduating institution and publication record at the time the tenure decision arrives is rather tenuous.

While there is undoubtedly hierarchy in economics (in getting a job, getting published, and getting together), as arguably it should be to the extent that it is merit-based, some of the authors’ examples are problematic at best. Yes, the AEA (American Economic Association) is a unitary organization and it has no “sections” as sociologists and political scientists have but economics has, for example, a strong and strongly growing association of experimental economists worldwide called the Economic Science Association and I would argue that this has helped to defuse some of the centralizing trends that the AEA brought about for a while. As has the emergence of the European Economic Association, or EEA. A good case can be made that part of the momentum for behavioral and experimental economics has come from the self-organization that has happened outside of the strictures of the AEA over the last couple of decades. The authors seem ignorant about these, and many similar related developments (e.g., here and here and here). In general, it seems clear that hierarchy is flattening both in terms of hiring (again see Conley & Oender) and in terms of getting published (see here ). And there is plenty of dissent in economics these days. And that’s a good thing.

Ad 3: Economists are materially better off

The authors acknowledge that, notwithstanding what they perceive to be the insularity and hierarchical structure of economics, changes can happen and can happen relatively quickly. The authors’ case in point is finance which has seen a steady increase of extra-disciplinary citations in what the authors consider the five top economics journals (as percentage of citations roughly a doubling over the past two decades; see Figure 3 their paper). No surprise there since  finance is in many respects just a spin-off of economics, albeit one which is recognizably closer connected to the business world. It is this fact that actually has improved the demand for economists from business schools; it also has created considerable opportunities for consulting (p. 17).

While this trend has been good for economists’ incomes, it has also made them to some extent dependent: Whose bread I eat, his song I sing, as the German proverb has it.

And, yes, when the stakes are high economic theory predicts that at least some economists will sell out quickly, as also suggested by the work of Zingales (2013) that the authors cite. Did I say when the stakes are high? “For a moderate fee,” jokes Deirdre McCloskey, “an economist will tell you with all the confidence of a witch doctor that interest rates will rise 56 basis points next month or that dropping agricultural subsidies will increase Swiss national income by 14.8%.” (From an Economist article reporting on the Fourcade et al. study.)

Ad 4: Economists are more individualistic (and less inclined to collaboration)

Well, for the most part that statement reflects a lack of understanding of modern economic theorizing. The authors mention some of the usual references (e.g., the Frank et al 1993 JEP study, the Frey & Meier EJLE 2005 study and one of the  classic Marwell & Ames studies) but ignore conveniently some evidence that contradicts these findings including one that explicitly has taken as target the Frank et al study: Watch what we do not what we say!

Ad 5: Economists are more convinced in their discipline’s “ability to fix the world’s problems.” Or, in other words, “most economists feel quite sure about their ‘value added.’” (p. 22)

The implicit claim is that economists are over-confident. Because. Global Financial Crisis.

Well, yes, economists tend to be not particularly humble people but for starters they are quite a diverse bunch in their opinions, and, of course, there were people who did predict the GFC, or various precursor events.  In fact, as the famous saying has it, whenever you have n economists in a room you are assured to have n+1 opinions because one of them will have two opinions all by himself, possibly at the same time.

The key problem of the present paper is that it does not appropriately factor in this diversity.  Whether economists are too sure of themselves is hard to assess in the aggregate. A recent exploration suggest economists are “inhumanly impartial”. Who am I to argue?

Maybe, you should have them superiors serve you, even if it comes at a premium. You get, as the saying has it, what you pay for.

P.S.:

As mentioned, the working paper by Fourcade and her colleagues has attracted considerable commentary on social and other media.

Noah Smith has argued that the premium that economists can pocket is for the most part due to the fact that economists have teched up on statistics over the past few decades. Which is, no doubt, part of the story. But they have teched up in many areas and statistics is just one and IMHO not really the most important one; the game theory and behavioral revolutions strike me as of at least equal importance.

The Economist also had a write-up and it was as uninformative as I have come to expect from that rag. Under the title, “The power of self-belief”, the writer argues that economists’ sense of superiority is the driver of it all. He then, strictly scientifically, relies on a random sampling of that venerable and classy website called econjobrumors … :

“A glance at a popular blog for doctoral students in economics, econjobrumors.com, gives a taste of the contempt in which its users hold other disciplines. Sociologists ‘play around with big important ideas without too much effort or rigour,’ one econo-nerd asserts. “

World-class journalism that.

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