Economist Fist Fights

My earlier post on the fractious nature of professional economics turns out to have been an understatement. It’s a lot worse than I thought. There are groups out there who positively hate each other.

An excellent statement of the state of play is here[warning: this is from an insider within the profession, so it has inevitable jargon]: Angry Bear: Background on “fresh water” and “salt water” macroeconomics

The fight for the center of economics rumbles on with no end in sight. This is largely due to the kinds of issues I mentioned earlier. The imperious Chicago School folks are the cause of most of the trouble. They truly think they have discovered the ‘truth’ and that it is mathematical, rational, and informationally pure. They can best be described as Utopian. They live on another planet. Unfortunately they dominate much of the discussion and their micro analysis is the most commonly taught.

They mean well. They are also foolish. To outsiders like us they sound as if they are from some extreme mechanistic inhuman planet: they have managed to eliminate humanity from their models in the name of mathematical purity and beauty. they study these models with an intensity only previously found amongst the shaman classes of religious cultures. the only thing lacking from their approach is human sacrifice, and that is missing only because there can be no humans in the NeoClassical world. We’d mess things up with all our constrained rationality and silly antics.

That this kind of deep division exists within a well funded and publicly supported piece of academia is a scandal. It is also sad. Just when we need help from experts we raise the curtain only to find a bunch of spoiled and pampered academics throwing barbs at each other with no coherence overall.

So carry on world. Economics will catch up sometime in the future. Meanwhile good luck solving all those real world economic problems.

Pity about the theory.