Friday, March 22, 2013

Are Economists Biased?

Tyler Cowen identified the problem of economist bias recently in The New York Times. The profession prides itself on its objectivity—it’s about the numbers, stupid—but its policy analysis and prescriptions tend to align perfectly with what are called cosmopolitan values.

Cosmopolitan values are the set of progressive principles that everyone on the Upper West Side of Manhattan and in American universities hold to be dogmatic truths.

Following up on Cowen’s idea in Forbes Pascal-Emmanuel Gobry asked why economists promote college education but do not seem to favor marriage and childbearing.  They know, or ought to know that there are distinct economic advantages to the individual and society in both marriage and childbearing. Yet, they do not encourage marriage as much as they encourage higher education. 

One might say that they value the life of the mind more than the life of the body.

Megan McArdle framed it well on The Daily Beast:

College improves your earning prospects.  So does marriage.  Education makes you more likely to live longer.  So does marriage.  Yet while many economists vocally support initiatives to move more people into college, very few of them vocally favor initiatives to get more people married. 

We need to qualify the charge by noting that these authors are only talking about academic economists. In the real world many Ph. D. economists work in the private sector and in the government. The Federal Reserve is chock-a-block with economists; so are banks and hedge funds.

Most of these economists do not pontificate on public policy matters, so the critique does not extend to them.

It is worth noting that the hot new field of behavioral economics has been trying to identify unconscious bias in decision making. Do these economists believe that if we know what is influencing our decisions we will naturally make better, more rational decisions? Or do they think that humans are hopelessly biased, regardless of the best efforts of behavioral economists?

The debate over economist bias seems to suggest that, whatever insights behavioral economists have provided about bias, their own profession is still riddled with it.

To coin a phrase, economist, heal thyself!

Were it not for their claims to objectivity and impartiality one would normally believe that academic economists are merely reflecting the progressive values that are universally accepted in the world of universities.

They might not be aware of the way they suffer from academic groupthink, but their susceptibility to it shows how powerfully it influences judgment.

Beyond the ingrown political correctness that infests these campuses, it makes sense that academic economists would man the barricades to defend the value of college education.

They do it despite the fact that education has largely been overvalued by our society, that far too many people get educations they do not need and that it burdens young people with too much debt.

If you, like academic economists are in the education business then clearly you want to enhance the value of advanced education. Your salary depends on it. Your prestige and your consulting fees depend on it. 

And if you make education a transcendent good anyone who suggests limiting its scope or availability will be denounced as a Philistine. Any politician who wants to limit the access to education or to student loans will be run out of office as a purveyor of ignorance.

McArdle offers a slightly different, though entirely cogent explanation for economist bias:

Which makes me gravitate towards a more parsimonious explanation: all economists are, definitionally, very good at college.  Not all economists are good at marriage.  Saying that more people should go to college will make 0% of your colleagues feel bad.  Saying that more people should get married and stay married will make a significant fraction of your colleagues feel bad.  And in general, most people have an aversion to topics which are likely to trigger a personal grudge in a coworker.

As I say, I find this cogent. It is also subject to some question.

I grant that not all economists are good at marriage, but then again who among us today is. Are economists naturally better or worse than other professionals or than other non-professionals? Are private or public sector economists better or worse at marriage? For my part I do not know.

If the field draws people who are more oriented toward numbers than toward people, it makes sense that their human relationships are not quite as durable as are those of people who are more involved with, say, words.

But, again, that’s pure speculation.

Do you think that English professors and artists, for example, are notably good at marriage?

Of course, humanists do not pretend to be doing objective science. They defend the value of learning as vigorously as the economists do but they do not pretend that their opinions are science.

Of course, nothing would prevent an economist from valuing education and valuing marriage at the same time. If most of them do not, the reason must lie in the fact that traditional marriage has been demeaned, diminished and disparaged in their culture.

Remember the firestorm that greeted Dan Quayle when he declared, two decades ago, that perhaps Hollywood should not be glorifying unwed mothers like Murphy Brown.

The intelligentsia and the cognoscenti rose up as one to demand that the country stop stigmatizing unwed mothers. It wanted to defend women who had chosen not to be part of a patriarchal institution. Besides, feminism prescribed independence and autonomy. Since there was no reason for a woman to need a man in her life it was misogynistic to stigmatize unwed mothers.

You know the consequences all too well. The country is now awash in out-of-wedlock childbearing and childrearing. Even the economists know that this bad habit has produced profoundly negative social consequences.

Will the culture rise up as one and declare that unwed motherhood is not a good thing. We await developments. 

The topic of shame has been much discussed lately. You recall that New York’s Mayor Bloomberg was denounced for putting up subway posters that were intended to shame unwed teenage mothers.

Some of those who responded told us that shaming could never work; others insisted that it could. I find myself in the company of the latter group.

But then there's a great irony here. Those who do not want to stigmatize unwed mothers are more than happy—they are gleeful—at the prospect of shaming anyone who does not agree with their progressive dogmas.

McArdle is correct to suggest that economists do not want to promote the value of marriage because they are not very good at it. But she should also have noted that economists suffer a more powerful influence: if they buck political correctness they will be ostracized in their own academic communities. 

In order to obey the dictates of their culture economists have failed to provide the nation with their best judgment about higher education and marriage.

But isn't that, in and of itself, shameful? Isn't Tyler Cowen trying to shame his fellow economists for having sacrificed their professional integrity to political correctness?

1 comment:

Anonymous said...

The old name for the discipline was "political-economy" because the philosophers understood that the organization of public life is a political challenge bound together with the economic conditions in a given society.

Higher education should be widely available in a modern industrial country -- going backward is not the way forward. There may be better solutions to the finance problems which society has yet to invent and recognize.