Book review: The Soulful Science: What Economists Really Do and Why It Matters by Diane Coyle.
This book provides a nice overview of economic theory, with an emphasis on how it has been changing recently. The style is eloquent, but the author is too nerdy to appeal to as wide an audience as she hopes. How many critics of economics will put up with quips such as “my Hamiltonian is bigger than yours!”?
The most thought-provoking part of the book, where she argues that economics has a soul, convinced me she convinced me she’s rather confused about why economics makes people uncomfortable.
One of her few good analogies mentions the similarities between critics of evolution and critics of economics. I wished she had learned more about the motives of her critics from this. Both sciences disturb people because their soulless autistic features destroy cherished illusions.
Evolutionary theory tells us that the world is crueler than we want it to be, and weakens beliefs about humans having something special and immaterial that makes us noble.
Likewise, economics tells us that people aren’t as altruistic as we want them to be, and encourages a mechanistic view of people that interferes with attempts to see mystical virtues in humans.
Some of her defenses of mainstream economics from “post-autistic” criticism deals with archaic uses of the word autistic (abnormal subjectivity, acceptance of fantasy). These disputes seem to be a disorganized mix of good and bad criticisms of mainstream economics that don’t suggest any wholesale rejection of mainstream economics. It’s the uses of autistic that resemble modern medical uses of the term that generate important debates.
She repeats the misleading claim that Malthusian gloom caused Carlyle to call economics the dismal science. This suggests she hasn’t studied critics of economics as well as she thinks. Carlyle’s real reason (defending racism from an assault by economists) shows the benefits of economists’ autistic tendencies. Economists’ mechanistic models and lack of empathy for slaveowners foster a worldview in which having different rules for slaves seemed unnatural (even to economists who viewed slaves as subhuman).
I just happened to run across this thought from an economist describing his autistic child: “his utter inability to comprehend why Jackie Robinson wasn’t welcomed by every major league team”.
She tries to address specific complaints about what economists teach without seeing a broad enough picture to see when those are just symptoms of a broader pattern of discomfort. Hardly anyone criticizes physics courses that teach Newtonian mechanics for their less-accurate-than-Einstein simplifications. When people criticize economics for simplifications in ways that resemble creationists’ complaints about simplifications made in teaching evolution, it seems unwise (and autistic) to avoid modeling deeper reasons that would explain the broad pattern of complaints.
She points to all the effort that economists devote to analyzing empirical data as evidence that economists are in touch with the real world. I’ll bet that analyzing people as numbers confirms critics’ suspicions about how cold and mechanistic economists are.
She seems overconfident about the influence economists have had on monetary and antitrust policies. Anyone familiar with public choice economics would look harder for signs that the agencies in question aren’t following economists’ advice as carefully as they want economists to think.
I’m puzzled by this claim:
The straightforward policy implication [of happiness research] is that to increase national well-being, more people need to have more sex. This doesn’t sound like a reasonable economic policy prescription
She provides no explanation of why we shouldn’t conclude that sex should replace some other leisure activities. It’s not obvious that there are policies which would accomplish this goal, but it sure looks like economists aren’t paying as much attention to this issue as they ought to.
She appears wrong when she claims that it’s reasonable to assume prediction market traders are risk neutral, and that that is sufficient to make prediction market prices reflect probabilities. Anyone interested in this should instead follow her reference to Manski’s discussion and see the response by Justin Wolfers and Eric Zitzewitz.