It is common knowledge among economists that the greater one’s reputation, the worse one’s presentation. Once you write something clever, no one can get away with calling you stupid. This gives you the right to say incredibly foolish things and everyone will nod and rub their chins and attribute all manner of hidden wisdom to you. Oh, what a glorious profession!
This immunity to the charge of buffoonery is your sacred right. It is a form of capital that you have worked hard to acquire. I shall call it “Big-Shot” capital—or B.S capital, for short. I, Dr. Edgeworth Boks, have more than a little of it, myself, I am proud to say. But no one does a better job of putting his B.S. capital to use than Paul Krugman. I kneel before him in awe—a lowly soldier from Athens genuflecting before a Greek god.
My misguided research assistant, P.S. Babcock (only days away from completing his doctorate and becoming an economist in his own right—heaven help us—what have I wrought?) misses the point when he criticizes the blessed Krugman. True, the venerable Krugman dispenses misleading statistics and shallow, one-sided diatribes that a first-year grad student would be beaten to pulp over in an economics seminar. But in this he displays his true brilliance! To understand P.K., one must come to understand the subtler implications of tournament theory. I, Dr. Edgeworth Boks, a game theorist of some renown, will explain some of these to the uninitiated.
Academics are not well compensated. Many people in the private sector (some of whom even have egos as big as that of an academic, if such a thing is humanly possible) earn more money. This is a great thorn in the side of academic economists. If we’re so smart, why don’t we make more money than those uneducated M.B.A.’s? Why aren’t we more famous? And most important, how do we incentivize young economists so that they will continue building castles in the sky, venerating us and our academic work, instead of accepting the higher pay that the private sector offers? How do we induce them to work very hard on pointless technicalities and formalism while surrendering forever their common sense?
We employ game theory, that’s how. We allow only a few to ascend to the highest ranks. Then we make life cushy for the winners. Formal game theoretic models that capture this intuition are called “tournament” models. In order to induce hard work in junior faculty, we create enormous rewards for the few that win promotions. Tenure, of course, is the first of these. But not all of the incentives are financial. Other incentives include immunity from being called a buffoon, even when you act like one. Junior faculty work feverishly, night and day, to acquire the Big-Shot capital that accompanies victory in tournament-like competitions for publication.
Here is the main point: If we ever denied the winners their rewards (i.e., their B.S. capital), as Babcock suggests we should, then the whole glorious system might come tumbling down in ruins. This would seem a high price to pay for a goal so trifling as integrity.
Very few careful, evenhanded economists ever have worshipers (at least, not when they are alive.) This is because most people like to choose sides in a public debate—and, alas, no major political party has a monopoly of economic idiocy. An evenhanded economist will thus routinely disappoint people of all persuasions. In short, he will piss off everyone. Such an economist will never attain rock-star levels of celebrity.
Babcock’s attachment to notions of intellectual integrity is quaint and old-fashioned, but has no place in today’s marketplace of ideas. I defend P.K. as my colleagues do. Yes, yes, his columns are flimsy and misleading. Off the record, almost no economist, Democrat or Republican, will contest this. But when speaking off the record, my colleagues offer the following impeccable defense of P.K’s punditry:
1) If he were careful and fair-minded, no one would read him. Thus, it would be irrational of him to write honest and balanced columns.
2) He’s no worse than most other pundits in the depth and profundity of his bias, but he has a greater capacity to mislead. Again, it would be crazy not to use this advantage. (Due to P.K.’s reputation, the layperson mistakenly assumes his analysis of current events derives from his expertise in economics rather than from a passionate emotional pre-commitment to one team.)
3) He paid his dues and wrote down some very nice theoretical models of international trade, many years ago. His B.S. capital makes him untouchable.
4) Economists don’t really know much. If we spoke carefully in the public sector, people would find out how little we know. Then they would stop listening altogether.
And, finally, if the economist in question is a passionate Democrat, he or she may offer:
5) The Bush administration is so vile that it must be taken down by any means necessary—truthfulness is a luxury.
This last justification is the Guantonimo Bay excuse: P.K. is torturing the truth out there, but we must turn a blind eye to it because the stakes are so high.
Do other economists utilize their B.S. capital? Indeed. One could venerate, Greg Mankiw, say, for the intellectual twists and contortions he goes through to defend Bush Administration policies. But everyone knows that Mankiw’s employer is calling the shots. And Mankiw never really gets worked up about anything. He never seems passionately committed to an intellectual fraud the way Krugman does. At best, he seems vaguely embarrassed by some of the silly things he must say. He simply doesn’t know how to use his B.S. capital effectively. He needs to learn to froth at the mouth. He must learn to engage in character assassination of more balanced thinkers, as Krugman does. Alas, he is but a novice.
In any event, I have delivered my defense of Krugman, as we here at Ask Edgeworth promised a month ago. I would have posted earlier but I am a tenured academic and have completely forgotten how to perform certain mundane and inconsequential tasks—such as using a computer keyboard, answering email, writing a coherent sentence, or completing a task on time.
Ever yours in blissful pedagogy,