The Closed Minds Problem
When I was a young economist trying to build a career, I lived or thought I lived in a world in which ideas and those who championed them met in relatively open intellectual combat. Of course there were people who clung to their prejudices, of course style sometimes trumped substance. But I believed that by and large better ideas tended to prevail: if your model of trade flows or exchange rate fluctuations tracked the data better than someone elses, or resolved puzzles that other models couldnt, you could expect it to be taken up by many if not most researchers in the field.
This is still true in much of economics, I believe. But in the areas that matter most given the state of the world, its not true at all. People who declared back in 2009 that Keynesianism was nonsense and that monetary expansion would inevitably cause runaway inflation are still saying exactly the same thing after six years of quiescent inflation and overwhelming evidence that austerity affects economies exactly the way Keynesians said it would.
And were not just talking about cranks without credentials; were talking about founders of the Shadow Open Market Committee and Nobel laureates.
Obviously this isnt just a story about economics; it covers everything from climate science and evolution to Bill OReillys personal history. But that in itself is telling: academic economics, which still has pretenses of being an arena of open intellectual inquiry, appears to be deeply infected with politicization.
So what should those of us who really wanted to be part of what we thought this enterprise was about do? Thats the question Brad DeLong has been asking.
I see three choices:
1. Continue to write and speak as if we were still having a genuine intellectual dialogue, in the hope that politeness and persistence will make the pretense come true. I think thats one way to understand Olivier Blanchards now somewhat infamous 2008 paper on the state of macro ; he was, you could argue, trying to appeal to the better angels of freshwater nature. The trouble with this strategy, however, is that it can end up legitimizing work that doesnt deserve respect and there is also a tendency to let your own work get distorted as you try to find common ground where none exists.
2. Point out the wrongness, but quietly and politely. This has the virtue of being honest, and useful to anyone who reads it. But nobody will.
3. Point out the wrongness in ways designed to grab readers attention with ridicule where appropriate, with snark, and with names attached. This will get read; it will get you some devoted followers, and a lot of bitter enemies. One thing it wont do, however, is change any of those closed minds.
So is there a reason I go for door #3, other than simply telling the truth and having some fun while Im at it? Yes because the point is not to convince Rick Santelli or Allan Meltzer that they are wrong, which is never going to happen. It is, instead, to deter other parties from false equivalence. Inflation cultists cant be moved; but reporters and editors who tend to put out views-differ-on-shape-of-planet stories because they think its safe can be, sometimes, deterred if you show that they are lending credence to charlatans. And this in turn can gradually move the terms of discussion, possibly even pushing the nonsense out of the Overton window.
And the inflation-cult story is, I think, a prime example. Yes, you still get coverage treating both sides as equivalent but not nearly as consistently as in the past. When Paul hyperinflation-in-the-Hamptons Singer complains about the Krugmanization of the media, who have the impudence to point out that the inflation he and his friends kept predicting never materialized, thats a sign that were getting somewhere.
It really would be nice not having to do things this way. But thats the world we live in and, as I said, theres some compensation in the fact that one can have a bit of fun doing it.
The Closed Minds Problem , by Paul Krugman , New York Times
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I am really disappointed that I was not in attendance at the conference where one paleontologist proposed that some dinosaurs had feathers. According to reports, the dry, humorless paleontologists came to blows over whether or not some of the dinosaurs of the Mesozoic were feathered.
Closed minds are not just the problem of economists, but of all tenets-- and very well illustrated here on NT.
There are those who will see only the bad-- dreaming up fantastic scenarios that cannot be possibly true, and those who will see only the good, dreaming up fantastic scenarios that cannot be possibly true. The truth often lies somewhere in the middle.
No matter which economic theory one holds, in all reality, none of them hit the nail on the head-- and when personal feelings, such as political leanings, get in the way, logic flies out of the window. People become entrenched in their beliefs, which are reinforced by those who have similar beliefs, and won't budge one iota off track.
It must be human nature, or genetic, somehow.
No science is perfect. That's the nature of the beast.
That said, a scientific theory is considered valid when it provides predictions which are then observed in the real world. Keynesianism has done this, throughout the various crises since Lehman blew up.
Some people refused heliocentrism long after Copernicus. Some people continue to refuse Keynes.
* * * sigh * * *
Economics is not a science, never has been never will be. even Keyenes would tell you that.
Why?
(This is a challenge! Are you capable, for once, of articulating an argument to support your peremptory opinion?)
Oh, and... Keynes is dead...
As are we all...