Taking a look in the mirror
Posted February 25, 2008on:
Over at NZQuest, Oliver Woods claims that economics
…works around perfect conditions and universal application of models and theories developed many years ago to any economic problem, believing history, society and all sorts of other factors undermine the ‘homo economicus’, or the supposedly rational profit-driven man who thinks entirely in his own self-interest and only helps others when they can help him.
As Matt has previously addressed there is a huge difference between positive statements and normative judgments. Woods is confusing the judgments he attributes to economists with positive statements of economics. To quote my blog-of-the-moment, Positive Economist (which has TONNES of excellent posts relevant to this topic),
I can only plead that we recognize that whatever economists do or are perceived to do, their method of modeling people can explain anything, and I mean that as both a criticism and a compliment. Our method is neutral, our method is empty. Attack the normative interpretation of our conclusions. Attack the assumptions we make. Don’t attack the method: you’re shooting at thin air.
Perhaps Woods is attacking the assumptions that economists make but, if so, he’s attacking a straw-man. Economists do not assume people are profit driven, that they act entirely in their own self-interest (at least in the way I believe Woods means it), or that they do not wish to help others. It may surprise many to learn that most academic economists, in the US at least, are actually liberals who vote Democrat and support regulation, taxation and whatnot.
However, I don’t mean to criticise Woods himself: while I think he’s misinformed about economics, he seems to truly want the subject to move forwards. What bothers me more is that his mistaken view of economics is likely to be widely held. He is clearly not an ignorant person and cares about the subject. That he should hold such inaccurate views about what economics represents speaks very poorly for the teaching of economics, and for the way the profession represents itself to the public. Perhaps, rather than reflexively dismissing the criticisms of intelligent, but misinformed, people we should ask ourselves what WE are doing to correct peoples’ misconceptions about our subject.