This is a really interesting essay--a quick conspectus of what's going on in the field of economics masquerading as a book review of Heather Boushey's book Unbound: How Inequality Constricts Our Economy and What We Can Do about It (well, to be fair, it offers a light layer of commentary on the insights mostly discussed in that book itself. I think Cassidy would agree that Boushey should get the credit--just as Boushey would point out that the other scholars she discusses should share it as well; all any commentators do is laquer on ever-thinner layers of patina on an already valuable piece. OK I'll shut up now). What I like about this piece is its special focus on the growing attention to moving from economics as an account of how things work to an account of how things don't work. This is not a massive global critique of capitalism--economics as currently constituted won't do that.
(An aside, for my more humanist, Nation-reading friends: if you want to see someone try that once again, this piece by David Graeber is a good example of one piece, where interesting bits of narrative about moments of economic history are presented as warranting large claims about the fundamental wrongness of economics as a field, with the implication that a radically different strategy (usefully unnamed) would be better. I am not sure Graeber is a reliable person on these things, however; when he is critiqued, he tends to attack the person rather than the argument, which is not helpful. (Graeber's opponents have a good time with him, as this post by Brad DeLong--a progressive (but not radical) economist makes somewhat clear; the exchange DeLong cites with Henry Farrell, at the Crooked Timber blog, gives more evidence of this.))
Among many other useful things, Cassidy makes this insightful point about Boushey's even-more insightful sounding book:
Twenty years ago, the biggest stars in economics were theorists, such as Robert Lucas, Paul Krugman, and Joseph Stiglitz. Today’s stars tend to be empiricists known for finding new data sets and applying new techniques to analyze data. They include Harvard’s Raj Chetty; Thomas Piketty, of the Paris School of Economics; Berkeley’s Emmanuel Saez; and the three economists who were awarded this year’s Nobel Prize, for their pioneering use of randomized field trials in assessing efforts to fight global poverty—M.I.T.’s Esther Duflo and Abhijit Banerjee and Harvard’s Michael Kremer. Boushey refers frequently to the work of Chetty and Saez, but one of her book’s merits is that it shows how the trend toward empiricism encompasses many different subfields and researchers. (The book’s footnotes, which reference hundreds of different studies, are a treasure trove.) Another encouraging development Boushey highlights is that women, such as Duflo and Princeton’s Janet Currie, have produced some of the most influential recent research in economics, a subject long dominated by men.
That is really interesting. What caused the shift from theory being the central locus of innovation in economics to data?
(Another aside: that reminds me of something that my friend Tal Lewis has said in his book Why Philosophy Matters for the Study of Religion--and Vice-Versa, namely, that major theoretical and conceptual innovation and advancement in a field can come from different sub-fields at different times, so that in religious studies, for instance, a lot of the most interesting theoretical stuff on religion in the 1970s and 80s came out of philosophy--think of Wayne Proudfoot's Religious Experience, for instance--but then in the 1990s and 2000s it was other, more historical scholars--in one way, the critique by the scholar of antiquity J Z Smith, in another the move to "lived religion" especially in American religious history--and then since 2005 or so by anthropologists of religion. It seems that fields have mobile hot spots. If anyone knows of other examples, or scholars who study this, I would love to know about them.)
Anyway, it's worth reading. Oh, and at the end of the piece, Cassidy suggests that the "new paradigm" that Boushey sees emerging might be usefully signalled by thinking about the shift from "economics" to "political economy," with the new moniker (really an old moniker) meant to bring to explicit self-consciousness the directly political and institutional factors that are so crucial to understanding the functioning of what we have come to call "the economy":
During the twentieth century, a determined effort was made to reconstruct economics on the basis of rationality and scientific methods, with all value judgments excised. All too often, however, this project translated into a naïve faith in the market, and a deliberate neglect of the underlying factors that bias economic outcomes, such as history, geography, class, culture, race, gender, and access to political power. In many areas of the subject, economists are now trying to reintegrate these factors into the analysis.
This is interesting and very very good; I suspect that many earlier scholars, like A.O. Hirschman and every sociologist I have ever known or heard of, would be nodding along with that.
Speaking personally, what I would like to see come next is some direct attention to the other end of the scale, the individual human consumer. Here the work in behavioral economics may be useful. Not only Kahneman and Thaler (and in different ways, Skitovsky and Ainslie, whose books The Joyless Economy and Picoeconomics just came out too soon for the behavioral econ wave) but many others have suggested some powerful insights here. An economics which incorporated the historical and cultural complexities of human institutions and the complexities of human psychology would be very attractive. In general, all this is very good news indeed.
Anyway, just some thoughts. You know what I realize? I realize I rarely actually talk about things I, you know, know something about on this blog. Like, um, religion. I'll try to do more on that in some future posts.
Happy Sunday, from the weird extradimensional reality that is conference-going--