I Can’t Believe Economists Don’t Do X

You can exchange ‘economist’ for ‘scientist,’ in the title, and the point I’m about to make remains the same.

I saw, on Facebook, a comment relating to the apparent disinterest amongst economists for the philosophy of their science, on average. The person making the comment suggested that one should become familiar with the philosophy of the science, then the history, and then focus on “application of the discipline” (which, I assume, includes learning the discipline).

This approach should be met with suspicion, especially amongst economists. One way society becomes wealthier is through specialization, which is made possible by a growing division-of-labor. We focus on using a more specific set of skills, so that we can develop these skills and produce more. Further, by narrowing the skill set one needs to produce, you can focus on your greatest skills, and do away with those that hold you back. But, if we all continue to specialize, how does a single person still act in a way that jives with the division-of-labor in general?

To re-state the analogy in terms specific to the economics profession: if economists continue to specialize (e.g. spend more time learning and practicing labor economics, implying less time to learn and practice monetary economics), how does their work fit in with the rest of the discipline? If Joe the Labor Economist is conducting research that must fit in with the remainder of economic theory, how is he to accomplish this if increased specialization comes at the cost of general knowledge of your field?

Communication. In a division-of-labor, humans have developed — spontaneously or otherwise — methods of communicating useful knowledge, without having to actually spend a lot of time searching for it. The common example is the pricing process. Prices communicate certain pieces of information. If a steel buyer requires so much of that input for some project, but the only steel manufacturer suffers a fire in its factory, cutting the flow of output in half, prices can communicate this knowledge to the buyer. Similarly, humans use language to communicate, and use of language gradually becomes simpler and more direct — people want to economize their use of language. Norms, or rules and heuristics, serve a similar function: to allow us to operate in a socially beneficial way, without having to really be aware of the specifics of other cogs in the ‘machine,’ so to speak.

The same is true within the sciences. It is true that a loss of general knowledge comes at the cost of being cognizant of other parts of the science, which your own research has to be consistent with. However, it’s also true that the less you specialize, the less you can focus on your specific research. The more knowledge the field produces, the more we have to specialize, because — given decreasing marginal returns — we have to increase our productivity to produce something of equal value. This creates a strain, however, between specialization and the relevance of general knowledge (e.g. philosophy of science, or the science outside your narrow sub-field). Institutions have to arise to help us economize on that general knowledge.

We might lament the perceived lack of general knowledge amongst scientists. We might want to criticize an economist for not knowing much about economic history, for example. But, rather than seeing this as a weakness within the discipline, it’s better to interpret it as general progress. Economists are becoming more specialized, because improvements in the communication of general knowledge have made greater specialization possible.

One test as to whether I’m right is to think about how well the average piece of research fits into the overall puzzle of economic theory. If it’s true that the average economist does not know much about the philosophy, or history, of her science (I’m assuming it as true), and it’s true that greater specialization should lead to a loss of cohesion, then we’d expect the state of economics to worsen over time. We’d also predict that aforementioned loss of cohesion. But, that’s not what we’ve seen. Instead, economics is equally as unified as it used to be, and perhaps even more so — consider, for example, the ‘requirement’ of microfoundations. This despite the fact that modern economics can provide a much richer understanding of the real world than the discipline could 60 years ago, because specialization has continued to progress.

That the average economist might not know much about the history and/or philosophy of economics is not a problem. Instead, it’s evidence of the progress of the discipline. Methods of communicating ‘general knowledge’ have improved, allowing economists to focus on narrowing sub-fields. This, like specialization in any division-of-labor, allows for productivity increases. What this means for science is that specialization is an important cause of growth in scientific knowledge.

6 thoughts on “I Can’t Believe Economists Don’t Do X

  1. Brian Albrecht

    The specialization argument is only valid if economists are trading their knowledge with other economists or historians. The division of labor is determined by the extent of the market and not the other way around, as Deirdre McCloskey emphasizes.

    Since academics don’t operate in a market and cannot rationally calculate using prices, it is hard to know whether the division is a good one. It is a fair criticism to make. The division might not be optimal.

    Of course, you point is valid and on the blogosphere it is a good perspective. Most people assume that economists should know more philosophy. You’re right to point out the trade-offs, since everything comes at a cost.

    1. JCatalan

      Economists do trade information, right? Science has institutions, such as peer-review and scientific journals more generally, for that very purpose. They also converse via alternative mediums, such as more popular press and via direct communication. That science doesn’t use the same set of institutions as markets doesn’t mean that it doesn’t have its own set of rules/norms, and that these rules/norms don’t arise for a similar purpose: to improve social coordination.

  2. Unlearning Economics

    I’m reminded of the three blind men each feeling a different part of an elephant and coming to very strange conclusions about what’s in front of them.

    The division of labour surely leads to productivity benefits in some areas, particularly manufacturing and straightforward (repetitive) services like data entry. But in the realm of knowledge, where a holistic understanding *is* the ‘product’ in question, I fail to see why increased specialisation would be beneficial, rather than resulting in a ‘blind elephant’ problem.

    The focus on narrow questions and related failure of systemic thinking (as well as forming the tools vital for systemic thinking, i.e. not microfoundations) is one of the major factors that limited and still limits economists’ inability to understand & deal with financial crises. Economics is ‘cohesive’ in the sense that the tools it has developed are specialised and suited to asking narrow questions, such as the impact of some RCT on education outcomes. However, these tools are extremely limited at asking questions at the macroeconomic or institutional level.

    Quite clearly, while it’s fine for some economists to have these skills and not to bother much with the history of thought or philosophy of science, we need different levels of enquiry in order to understand the object of study (the economy). Just as we wouldn’t only want scientists who specialise in understanding tornadoes or rain, but don’t know much about the atmosphere as a whole or the climate over long periods of time, we don’t want economists who only understand small areas of the field.

    1. JCatalan

      So, why not have just ‘scientists’ in general, rather than economists, physicists, anthropologists, et cetera? They could study everything: markets, space, governance, et cetera. Well, because that would come at an opportunity cost much greater than the knowledge ‘scientists in general’ could produce.

      Saying that economists need new tools is one thing. It’s not clear how that’s related to specialization. In fact, the smaller the division-of-labor, the less it will produce, all else equal — this goes for the production of knowledge, too. A less specialized discipline will produce those theoretical innovations much more slowly. A specialist in new institutionalism or macroeconomics could focus on these issues, allowing her to present a more complete argument (much better than a jack-of-all-trades either completely missing the problem — because he doesn’t have the time to dive deep enough — or providing only a superficial understanding).

      Clearly, though, there is a balance between specialization and general knowledge. Like Brian writes above, the division-of-labor is limited by the extent of the market.

      1. Unlearning Economics

        “So, why not have just ‘scientists’ in general, rather than economists, physicists, anthropologists, et cetera”

        I never argued we should “just” have anything; I argued we should have some people who specialise, and others with a more holistic understanding. Personally, I think historians/philosophers of science, who come quite close to doing what you say, have contributed valuable insights to human knowledge. So have people with a higher degree of specialisation.

        “In fact, the smaller the division-of-labor, the less it will produce, all else equal — this goes for the production of knowledge, too.”

        I disagree. We aren’t talking about “one man stretching the wire, one man fastening the head…” for pins here; we’re talking about ideas. And new ideas sometimes involve linking together old ones from disparate sources: for example, behavioural economics is a combination of psychology and economics.

        What’s more, with ideas, more isn’t necessarily better. While it’s a debatable example, I’d nominate the flood of oligopoly and macroeconomic models in economics as examples of too much of one ‘type’ of knowledge. Yet someone like Piketty – who, yes, does have a specialisation, but also has a broad range of knowledge – has used an understanding of history, economics, statistics etcetera to contribute a lot to macroeconomics.

  3. nfreiling

    Understanding the philosophy of economic science requires an understanding of the methods of economic science and knowledge of how it is applied. This has been my experience as a student of economics. As I learn more about how the discipline is applied to solve real-world problems (and how successful those forms of application are toward achieving their stated end), I become a better critic of the various claims about the philosophy behind economics. Some economists may neglect philosophical questions about their discipline, but as they delve deeper into their specialized field, they will usually become more equipped to address such questions as they arise. Firsthand experience is not the only teacher, but it’s a great teacher!


Leave a Reply

Your email address will not be published. Required fields are marked *