Wednesday, 15 February 2017

Noah Smith says Stuff

Say what you will about Noah Smith, the former econ professor at Stony Brook Uni and prolific blogger, now continuing his writing for Bloomberg View. His well-formulated articles and succint blog posts have always resonated with me, causing a reaction (mostly negative, however...) and inspired me to read, write and argue. In other words, Noah's writing brings out the very purpose of economists, Paul Romer-style; in September last year, Paul Romer made a fuzz with his article The Trouble With Macroeconomics, in which there was a quote I instantly pulled to place on my wall of inspirational quotes: 

In a first-pass analysis, it seems reasonable to assume that all economists have the same preferences. We all take satisfaction from the professionalism of doing our job well. Doing the job well means disagreeing openly when someone makes an assertion that seems wrong.   Paul Romer, p. 20. 
On Valentine's Day, Smith published another one of these many articles with provocative and controversial content: Economics Get a Presidential Demotion, discussing how Trump has removed the CEA chairman from the cabinet  the big news WSJ released a few days ago. Outcome? Trump's cabinet now lacks economists. How ironic for someone who's presidency rests on perceived economic backwardness. And Noah interprets this as a bigger trend of failing credibility and prestige for economists:
If economists fail to change their image, they run the risk that demand for their services - undergraduate education, consulting and political advice - will slowly dry up, bringing down both their salaries and their prestige.
Solution? 3 mind-blowingly and annoyingly simple talking points:

  • Start respecting what people actually care about 
    Apparently all economists care about is efficiency, but for the public jobs and security and stability and foremost equality matters more: "in a rich country, most people care more about distribution than efficiency; how the pie is divided matters crucially for most individuals’ livelihoods"
I doubt that assertion for many reasons, but let's just pretend it's true. If Noah didn't notice, equality etc is basically the only thing economists care about these days, in academic writing and lectures, in public discourse, in the media
  • Make Econ (101) more empirical 
Apparently what we teach our undergraduates isn't empirical enough  or in Noah's opinion not containing the right answer. So we should obviously change it. If true, it'd be be a serious charge indeed. Lucky, then, that those cherry-picked stories Noah refers to aren't very representative of actual empirical studies; no, Min Wages don't help the poor, and yes, free trade is still good for consumers.
  • Be kinder:
    "economists should definitely never tell people that they 'flunked Econ 101.' The real world isn't a classroom, and non-economists are not students. They are smart people who want information, not a lecture."
In contrast to the other points, this one might actually have some value (emphasis: some). He is right that economists are unlikely to convince anyone but a handful of dedicated students with their blackboard reasoning on say, the benefits of free trade. To reach "normal people", we have to be kinder, clearer and less condescending. On the other hand, failing econ 101 as badly as Trump or his supporters do, does deserve a fair dose of condescending comments. To invoke an oft-use analogy, nobody in a physics class would (or should) receive anything but ridicule for questioning the law of gravity. Same thing applies. 

Noah is probably right that people parading protectionism is an indication that what economists say, believe, prove and research carry less weight with the public  which of course may be a problem for economists seeking to influence the public. But neither of Noah's conclusions follow from that: we aren't necessarily wrong because the public distrusts or, and our methods and beliefs don't instantly have to change to incorporate that. Maybe over the longer haul, in order to ensure the survival of the discipline, but short of that, probably not.

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