I, Dr. Edgeworth Boks, have been asked by my readers to comment a disturbing article by William Davis in Econ Journal Watch, Volume 1, August 2004. Davis reports that a majority of economists responding to his survey confess privately that:
... academic research [in economics]mainly benefits academic researchers who use it to advance their own careers and that journal articles have very little impact on our understanding of the real world and the practice of public policy.
I can only say this wretched and inflammatory article should never have been published. It is dangerous. Not only that, it lacks the pointless mathematical complication necessary to impress other economists. As such, I have no use for it. I have been an economist for over 50 years. (See my seminal article on asymmetric subgame-perfect equllibria of 37-person pig-in-a-poke games in the Journal of Economic Narcissism, Vol.2, 1974). I have always known, as have my colleagues, that our work has nothing to do with the "real world." I repeat: We know this. What matters to us, to any true and dedicated academic economist, is not the reality but the far more interesting illusion. We are like master magicians. We insist until our dying breath that on a stage in Las Vegas we did, in fact, cut our assistant in half with a saw, spin her two halves around, and put her back together again. Not to put to fine a point on it: What we do is bullshit, but it is OUR bullshit. And it is glorious bullshit. This author, this killjoy, endangers us all.
We have splendid careers, we feed at the public trough, we win respect and admiration from the man on the street, people in powerful positions listen to us. What more could we ask for? (One of us even has a New York Times column where he spouts shallow prejudices 3 times a week in horrifically pompous prose and people still read him—is there a better scam going?)
Were this Davis fellow standing before me now—the traitor!—I would ask him this: What’s so damned special about the real world? We define agents who act rationally. If human beings were smart, they would do what our models say they do. They would have utility functions, of if not, they would at least be gracious enough to act as though they did. They would recognize their narrow self interest and never waver from the most self-interested course. In other words, Dr. Davis, the world we describe in our “unrealistic” articles is better than your reality. We must continue to refine our models and our methodologies because they are preferable to reality. We must resist the temptation to inject into our models anything that even hints of common sense. Common sense is just that—common—whereas economics is sublime!
Think of what we have accomplished. We can’t predict stock market movements, recessions, booms, we don’t know how to promote growth in the less-developed world, unemployment is a mystery. But people turn to us for advice anyway. How did we manage that? By being brilliant! We lack intuition about how real people behave. We are not good enough at mathematics to be bona fide mathematicians, but we’re better social scientists than the typical mathematician and better mathematicians than the typical social scientist. We have turned our weaknesses into a strength. We parlay pedestrian mathematics and nonsensical assumptions about human behavior into power and prestige. That, if you ask me, is ample evidence of our genius! (And a neater trick than any magician ever performed.)
Then along comes this Davis fellow to spoil all the fun. The ingrate. All I can say is, we’ve dealt with people like him in the past. We know how to do it. Every few weeks some junior academic tries to present a relevant and sensible paper at our department colloquium. We blast the upstart traitor with circular reasoning, nihilistic standards of proof, and references to a whole literature of absurdly insular self-serving nonsense. Soon, even the most stubborn of these traitors gets the message. It doesn’t pay to care about reality. Neither insight nor common sense is our comparative advantage in the marketplace. Technical flim-flam is.
Rest assured, dear readers. Our profession is safe for the moment from the Davis' of the world. But we must be vigilant. The greatest threat comes from within. We must continue to indoctrinate graduate students to the sublime beauty of the absurdly irrelevant. The greatest danger, as I have stated before, is an original thought. We must make orthodox theorists out of them. We must insist that they use the standard framework, with minor extensions. If they insist on doing applied work, we should direct them away from common sense, and insist that they focus instead on esoteric statistical innovations that generate meaningless results.
But doesn’t tenure work against us, you ask? When an economist receives tenure, he or she is free to write whatever he or she chooses. Surely, you exclaim, there is some danger that an original thought will emerge. Surely, one of these persons will unmask us; someone will explain that the woman in the box had her knees pulled up to her chest and was never really sawed in half? Surely, we are in grave danger, even now. Ah, dear reader, you forget the brilliance of the tenure system: We reward conformity and punish innovation for the first 6 years of a young economist’s professional life. After that, few of them will survive with a shred of a creative impulse intact. They will have forgotten what it felt like to be engaged with the real world. Intellectual integrity will be a distant memory. If they do continue to experience the dreaded pangs of intellectual curiosity—a desire to learn something new about the world—we will stamp it out by rewarding them with accolades for following the path of least resistance and shunning them if they do not.
In summary, dear readers, do not despair about the impact this reprehensible article might have on the profession. We have survived worse. All is well. Do not let a preoccupation with truth diminish your intellectual vanity, dear readers. And above all, be vigilant in your commitment to the irrelevant. You will never regret it. I know I never have.