What’s wrong with contemporary economics?

PAULSTREETEN Spencertown,NY, USA

Itis argued that in educating economists we shouldsacriŽ ce some of the more technical aspects of economics (whichcan be learned later), in favour of the compulsory inclusion of philosophy, political science, and economic history.Three reasons for these interdisciplinary studies are given. In the discussion of theplace of mathematicsin economics,fuzziness enters when symbols a, b, c areidentiŽ ed with individuals, Ž rms,or farms. The identiŽ cation oftheclear cut symbol with the often ambiguous and fuzzy reality invites lack of precisionand blurs the concepts. Ifthe social sciences, including economics, are regarded as a‘soft’technology compared with the ‘ hard’technology ofthenatural sciences, development studies have come to be regarded as thesoft underbelly of ‘ economicscience’ . Indevelopment economics the important question is: what are the springs of development? We mustconfess that we cannotanswer this question, that we donot know what causes successful development. ‘Economicsused to be written in English by Scotsmen; today it is written in mathematics by Hungarians’(overheard in the common room)

Ifyou can analyse – andnot make models your master; training in the understanding of institutions, of the Ifyou can think – andnot make algebra your aim; history of economic thought, of economic literature, Ifyou do not consider plain words a disaster of the handling and evaluationof quantitative and Andtreat words, Ž gures,symbols all the same; non-quantitative data,of how to weighevidence, and Ifyou can talk to crowds and keep your virtue without wider vision. And frequently they arenot able Or walkwith econometricians – norlose the common touch; to communicate eventheir narrow vision successfully. Ifneither facts nor theories can hurt you In his obituary of Frank Ramsey,John Maynard Ifall costs count with you, but none too much Keynes wrote: 1 Ifyou can Ž llthe unforgiving minute Ifhe had followed the easier path of mere inclination, Withsixty seconds’ worth of distance run Iamnot sure that he would not have exchanged the Yoursis the Earth and everything that’ s init, tormentingexercises of the foundations of thought and And– whatis more– you’ll have a lotof fun! ofpsychology,where the mind tries to catch its own tail, forthe delightful paths of our own most agreeable branch (withapologies to Rudyard Kipling ) ofthemoral sciences, in whichtheory and fact, intuitive imaginationand practical judgment, are blended in a Educatingeconomist s mannerconformable to the human intellect. Economics has strayed far awayfrom those delightful The question in the title of this essayis open to paths since Keynes wrote this. two opposite interpretations, one implyingapproval, In his essayon Alfred Marshall,Keynes wrote: 2 the other criticism. It canbe interpreted either in an Thestudy of economics does not seem to require any aggressivelydeŽ ant, pugnacious mode: what’s wrong specializedgifts of an unusually high order. Is it not, with contemporary economics? The implication would intellectuallyregarded, a veryeasy subject compared be that everythingis for the best in this best of all withthe higher branches of philosophy and pure science? possible worlds, or atleast for the second best in this Yetgood, or even competent, economists are the rarest best of allfeasible worlds. Or it canbe interpreted in ofbirds. An easysubject, at which very few excel! The amatter of fact, quietly inquisitive mode: what is paradoxŽ ndsits explanation, perhaps, in that the master- economistmust possess a rare combination of gifts. He wrong with contemporary economics? Ishallopt for mustreach a highstandard in several di Verentdirections the second interpretation. andmust combine talents not often found together. He Most people would agreethat it isapoor economist mustbe mathematician, historian, statesman, philosopher who is only aneconomist. Yet, the pressures for –insome degree. He must understand symbols and appointments, promotion, tenure, and publication have speakin words. He must contemplate the particular in become such that economists haveto cultivateever termsof the general, and touch abstract and concrete in narrower Želds, if not little patches. As aresult they thesame  ightof thought. He must study the present tend to become narrow minded specialists, without inthe light of the past for the purposes of the future.

©2002IoM CommunicationsLtd INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 13 DOI 10.1179/030801802225002935 Nopart of man’ s natureor his institutions must lie evidence, and economic history areneglected. Outside entirelyoutside his regard. He must be purposeful and economics, philosophy, politics, history, anthropology disinterestedin a simultaneousmood; as aloof and arecandidates for inclusion. incorruptibleas an artist,yet sometimes as near the earth Those of us who accept Keynes’s descriptions (or asa politician. arethey prescriptions?) of economics and economists Undergraduate and graduateeducation has moved a mayre ect on whattype of education is most con- long wayfrom these types of skill. Judged byits own ducive to producing agood economist. Isuggest that criteria, it canbe said to be agreatsuccess. Most weshould sacriŽce some of the more technical aspects members of the profession think they aremaking of economics, on which graduateeducation so much important contributions. Economists canget good jobs insists (which canbe learned later), in favour of the and aresought after, the discipline attracts good minds, compulsory inclusion of (a) philosophy, (b)political is rigorous and uniŽed, and, in spite of occasional science, and (c)economic history. Although each sniping from the outside, is widelyadmired. Yet, of these disciplines has its own justiŽcation, Ishall there is considerable unease, both inside and outside arguefor them on the narrower ground that they are the profession, expressed byits most senior members essential for makinga better economist. If wealso in presidential addresses and on similarceremonial getin the process more civilisedhuman beings, this occasions, among them Kenneth Boulding, Ragnar is abonus. Let me saya fewwords about each. Frisch, WassilyLeontief, DavidWorswick, Henry Philosophy consists of logicand epistemology, and Phelps Brown, LawrenceKlein, and G.S. L.Shackle. 3 of moral and political philosophy. Agood grounding The critique is summed up in Kenneth Boulding’s in logicand the theory of knowledge willmake the statement that modern economics is ‘the celestial economist abetter economic theorist. The distinction mechanics of anon-existent world’. 4 between anidentity and anequality ( because of the The USCommission on Graduate Education in identity of indiscernibles, equalityis possible only Economics, consisting of verydistinguished American between non-identicals), elementary to aphilosopher, mainstream economists, reported in 1991that tools would havesaved many pages of print in the early and theory wereemphasised in graduateeducation controversy over savingsand investment. It is amazing atthe expense of ‘creativity’and problem solving; how much wasted e Vort could havebeen avoided, and that the principal weakness of graduateeducation had the disputants been awareof the signiŽcance of wasan underemphasis of the linkagesbetween tools, the third little stroke added to the equalitysymbol. both theoretical and econometric, and realworld The philosophical analysisof causalityis another area problems. Graduate students who come to economics from which economists (and economic statisticians) from other Želds canobtain PhDs with little or no would beneŽt. knowledge of economic problems and institutions. Atraining in logicwould teach students to distin- There werealso criticisms of the lackof writingand guish between, on the one hand, tautologies and communication skills of manygraduate students: 5 deductions from axioms,which maybe validor invalid, Theweakness [of graduate education in economics] is and, on the other, empirical facts and their relation, not anexcessive use of mathematics. If there is a central themeto our concerns, it is that we believethere is con- which maybe true or untrue. Mistaking validityfor siderablescope for improvement in ensuring that students’ truth, and the easytransition from tautology to false- knowledgeof economic problems and institutions enables hood (e.g.the La Ver curve, some treatments of utility themto use their tools and techniques on important and proŽt maximisation) arefrequently the bane of problems. economics. Theyalso lieat the heart of the alleged Mycriticisms, like those of the commission, do not precision and rigour (afriend of mine used to callit applyso much to excessiveteaching of mathematics rigor mortis) of mathematicaleconomics. Conclusions (although it cancrowd out other activitiesand interests, maybe validbut arefrequently untrue. and be quite useless in the later career of the student, Agood education inmoral and political philosophy especiallyif he or she seeks anon-academic job), would avoid,or atleast reduce, the alltoo numerous but, asDavid Colander has pointed out, to whatis hidden biases in economic reasoning, the smuggled-in left out and to whatis illegitimatelyappropriated. valuepremisses, and the frequent naturalistic fallacies Arrogance (often combined with afeeling of inferiority (the jump from an‘is’to an‘ought’). Again,it would visa `vismathematicians and physicists) about alack savereams of wasted disputations. So, Iconclude, of awarenessof these limitations maybe atolerable for knowing philosophy, the economist becomes a aw,but intolerance of anyother approaches com- better economic theorist. monly found, whether alternativeor complementary In 1982an exchange took placebetween the Nobel to the orthodox approach, isnot. Scholars should be Laureateand Yaleprofessor James Tobin and the aboveall open minded and tolerant and, if possible, Harvardphilosopher, sometimes calledthe rich man’s also humble. Rawls,Robert Nozick, on ‘socialjustice in the Reagan What is left out of the curriculum canbe divided era’. Tobin said:‘ There’s nothing more dangerous than into areasfrom inside and outside economics. Inside aphilosopher who’s learned alittle bit of economics.’ economics, the study of institutions, economic literature, To this Nozick immediately responded: ‘Unless it’s the history of economic thought, the interpretation aneconomist who hasn’t learned anyphilosophy.’ of quantitative and qualitativedata, how to weighOn this occasion, Iconfess, Iagreewith Nozick.

14 INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 Political science, or, less ambitiously, politics as Education is, of course, more than acquiring skills or it is known in England,makes the economist a aptitudes;itinvolvesalso the acquisition of attitudes. better applied economist. The knowledge of political Weprefer our students to be not methodology driven, institutions and processes, and of political history, but realityand problem driven; to know the scope as makes the economist awareof the constraints and wellas the limits of the techniques weteach them; to opportunities for getting policies implemented. What havesome scepticism and humility, aswell as pride Ihavein mind is not the usurpation and narrowingin their subject. The brightest willprobably acquire of political science byeconomic method (or method- these traits in anycase. But how do wemake the ologyas it is regrettablynowadays always called ),asmodal men and women use the box of tools with illustrated bythe writingsof GaryBecker 6 and the which weequip them properly, and prevent them from Public Choice School, which uses abrain transplant fallingvictims to the lawof the hammer, according from the narrowest economic doctrines to politics, 7 to which alittle boy, givena hammer, Žnds everything but its broadening, aswas done for exampleby Albert worth pounding, not only nailsbut also Ming vases? 8 Hirschman, when he enriched economics with political Isuggest that additional education in philosophy and categories byexploring ‘voice’as an alternative to politics mayalso contribute to the right attitudes. ‘exit’. Does this broadening not mean that wehave to Thomas Schelling talks of ‘the absent colleague’sacriŽ ce specialised education in asubject that is all when it comes to applyingeconomic advice.Economists the time becoming more technical, specialised, pro- must take over the investigation into the political fessional, and fragmented? Unless welengthen the variablesin economic policy.And weshould supple- time of study, clearlysome sacriŽce is involved.It is ment the positive political economy bya normative to be hoped that mathematics willbe taught more branch, concerned with analysingwhat pressure eVectivelyin high schools, so that universities canbe groups, whatreformist alliances,what types of pro- spared this remedial training. Other more specialised gressivecoalitions canbe mobilised for desirable branches now included in the graduatecurriculum policies and reforms. canbe acquired later,or maynot be necessary atall Economists aretrained in the study of the operation for economists entering public administration, civil of economic forces within political, social,and moral society, the media,or business. constraints. This approach has to be supplemented When Iwasa student Iwent through the Oxford (and in some cases replaced)bythe study of the school of PPE, which stands for philosophy, politics, operation and manipulation of political, social,and and economics (with anadditional paper on social psychological forces within economic limits. More and economic history in the Žnalexamination). Since fundamentally, the distinction between economic and those daysthe pressures towards specialisation have non-economic variablesmay not be tenable if the removed the compulsory philosophy and politics papers aimis to understand socialproblems. Ishallsay more and the economic history paper from PPE. Icom- on this below. pared myteachers and the successful older generation The inclusion of some socialand economic (as well of economists who had sprung from this education aspolitical )history in the curriculum hardlyneeds awith those who had gone through the then more defence, although it is sadlyneglected. As Andrew specialised economics syllabusat Cambridge. (Since Kamarck remarked in adiscussion of this subject, those daysthere has been convergence, Oxford giving economic history callsfor adi Verent mindset from more specialised options, Cambridgefewer.) And I economics. It is not about equilibrium conditions, found that the Oxford products did not lagbehind about how asituation once disturbed returns to its the Cambridgeproducts in professionalism. Comparing initialstate, but about change.Adam Smith did only Nobel prizewinners, the score is two to one in understand the conditions of change,but economists favour of Oxford: Hicks and Meade wereOxford havelost sight of it since. trained, Richard Stone wasCambridge trained. Roy The discussion of outward looking versus inward Harrod, ashould havebeen Nobel Laureate(some- looking strategies, and of import substitution versus one should publish a‘Who should be who’and export promotion, would havegained in depth had perhaps a‘Who would be who’), wasOxford trained. the participants taken into account the historical Keynes himself, agenius, though Cambridgetrained, phasing of these processes. Everypoint on demand transcended its educational limitations. and supply diagramsshould havean added time The problem with American undergraduate education dimension, for memories of the past inevitablya Vect is that most American schools (with afewnotable movements from this point to anyother. Economists exceptions) teach so badlythat the young people attempt to dealwith expectations, but still draw haveto gothrough remedial training in their early demand and supply curves in atimeless fashion. The university years.They are often almost illiterate widelyaccepted dictum ‘bygones arebygones’ misses when they enter university. At the same time, these entirely the mark, for bygones a Vect expectations youngsters areoften eagerto learn,have open minds, and therefore current behaviour. So Iconclude that and areasking big questions. But whiletheir minds the economist, qua economist, is abetter theorist for areopen and whilethey areeager to ask these large knowing philosophy, and abetter applied and empirical questions, they do not havethe basic training to economist for knowing political science and history. explore them. Bythe time they reach graduatestudies,

INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 15 the groundwork is in place,but the need to chase it is just because they arespecialists in their Želds after credits and learn the required techniques tends that the diVerent members of ateam havea contri- to drive out time and interest in exploring wider bution to make to anintegrated solution. Wemay areas,asking interesting questions. As aresult, only think of them asmembers of aRoyalCommission veryfew exceptional young people areled to approach or aPresidential TaskForce, investigatingproblems the subject with asense of realityand vision. The of controlling environmental pollution, deciding on majority arestuck in the mould of narrow experts. afamilyplanning programme, planning anewtown, There aresome signs of arising demand for amore or investigatinghow to combat hunger. This kind of realisticeconomics that is more relevantto policy work, though highlydesirable for certain purposes, issues. Sniping from the sidelines is done byfeminist runs the risk of strengthening disciplinary borders economists, who emphasise argument byrhetoric, instead of abolishing them. One member of the team analogy,metaphor, pattern recognition, imagination, provides the economic perspective, another the demo- and dialecticalreasoning againstthe ‘rigour’of math- graphicone, athird the political one, and the result ematics and the ‘hard science’of masculine economics. is that eachis conŽrmed in their own territory, The ‘new’institutional economists, the school of experi- without anadvance in theoretical knowledge. mental economics, some radicaleconomists, and Second, it maybe the casethat certain assumptions, others havealso criticised the narrowness of main- concepts, methods, or techniques, hitherto applied stream economics. In particular the environmental only to one areaof study, yieldilluminating results economists havequestioned the narrowness and the when applied to another, previously analysedin quite blindness of conventional approaches. But byand diVerent ways.There has been aconsiderable invasion largethey haveleft the main structure una Vected. of economic concepts and techniques into the territory Recently a‘Petition to reform graduateeducation’ of political scientists, anthropologists, sociologists, wassigned byfour hundred and sixty-three American and psychologists. Principal agenttheory, the ‘new undergraduate economics professors who areinvolved institutional economics’, and work on the family inhiring neweconomists. Theysay that good teachers and on racialand gender discrimination havedealt of undergraduates do not receivecurrently necessary with areastraditionally discussed bysociologists. training in certain Želds. SpeciŽcally, they would The assumption of maximisingbehaviour under con- like anyone they hire to have:a background in the straints has been fruitful, up to apoint, in illuminating economic debates and literature of the past twenty the behaviour of consumers, Žrms, and farms. Its yearsand how those debates haveshaped what success in these Želds has encouraged its application economists asa profession believe;a solid training to political activitiessuch asvoting,party formation, in the models which they willbe teaching to under- and government decisionmaking.Calculations of graduates;a knowledge of economic institutions and economic returns and cost–beneŽ t analysishave been the role institutions playin the economy; anability extended from proŽt seeking investments to edu- to communicate orally,and in prose, the central ideas cation, health, birth control, the allocation of time conveyed in introductory and intermediate micro- between work and leisure and among di Verent leisure and macroeconomics; knowledge of the alternativeactivities, decisions about marriageand divorce, the approaches in economics and anability to compare size of the family,and evento extramaritala Vairs. and contrast di Verent approaches; and aknowledge Occasionally,though much less frequently, concepts of econometrics, but also of the limits of econometric used in political theory havebeen applied to economic testing. These characteristics arevery rare in current problems. Albert Hirschman’s use of ‘voice’as an requirements for academicappointments. alternativeto ‘exit’is anexamplealready mentioned. 9 There is athird, and deeper, reason for inter- disciplinary work. It maybe that for aparticular time Interdisciplinaryand or region the justiŽcation for havinga separate discipline multidisciplinarystudies does not hold. This justiŽcation for adiscipline con- sists in the contingent fact that between the variables There arethree reasons for interdisciplinary, multi- encompassed bythis discipline and those treated by disciplinary, transdisciplinary, and supradisciplinary another, there arefew interactions, and the e Vects of work in economics. Eachhas di Verent methodological anyexisting interactions areweak and dampened. Only implications. First, specialists in di Verent disciplines then arewe justiŽ ed in analysingcausal sequences in maywork together on aspeciŽc practicalproblem. one Želd, without alwaysand fully taking into account Improving nutrition, introducing newvarieties of crops, those in others. controlling population growth, reducing pollution, We mayagree that society is asystem and that planning anewtown, maynecessitate drawingon allsocial phenomena arerelated, but with growing severaldisciplines and applyingtheir contributions to diVerentiation of functions and standards some relation- the problem. In this cooperative e Vort the disciplines ships become stronger than others. This justiŽes arenot transcended but brought together for apractical us (some would argue) in, say,separating business purpose. This practicalneed to drawon allrelevant responses from familyresponses, or economics from disciplines does not a Vect the methods or the content anthropology. The need for interdisciplinary studies used inthe contributing disciplines. On the contrary, arises not because people in developing countries,

16 INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 particularlyin subsistence households, perform manyis calledfor is not interdisciplinary studies, but a new functions normally separated in rich countries, but discipline that constructs concepts, builds models because there is interdependence between variables (or paradigms,as the current phrase has it), and normally analysedseparately. ‘ Lackof specialization designs theories appropriate to the conditions of the among the people being studied in no wayjustiŽ es developing societies. In this case,we may have to lackof specialization among the students. Astudent discard concepts such asemployment, unemployment, of Michelangelo could wellconŽ ne attention to his underemployment, income, savings,investment, and sculpture, whilecaring little for the architecture and construct altogether new,more appropriate, concepts. painting in which Michelangelo also excelled.’10 The Second, and less radically,the existingconcepts, models, fact that functions in developing societies areless and theories maycontinue to be used, but their diVerentiated does, of course, havea bearingon the content mayhave to be changed or their deŽnitions interdependence. modiŽ ed. There arenumerous illustrations of such inter- How would these three approaches to inter- dependence in economics. One is the relationship disciplinary studies work out between, say,economists between income per head and population growth. and anthropologists? In the Žrst case– the team High or acceleratingrates of population growth are approach –anthropologists would be used for their often presumed to reduce income per head, and traditional training. If land reform or afamilyplan- higher income per head maybe presumed in certain ning programme or atourist project or evena research conditions to reduce population growth. Or consider project is proposed, they willbe ableto point to the relationship, examinedby Gunnar Myrdal,between ‘constraints’in the beliefs and mores of the people, the levelof livingof adeprived minority group, for or to beliefs and institutions that canbe mobilised examplea lowcaste or aracialminority, and an and on which the proposed reforms or projects can index of prejudice againstit. Prejudice is afunction be built. Nothing newor radicalis required here. of the levelof living– the less educated, the less The second caseis more interesting. Isuspect that healthy,the stronger the grounds of prejudice –and economic methods could illuminate some anthropo- the levelof livingis afunction of prejudice –the logicalwork and probably the converse too. The stronger the prejudice, the stronger discrimination in most interesting possibilities, however, areopened up jobs, education, and so forth. Or consider the relation bythe third case,whether in its reformist or radical between productivity per worker and the ratio of version. An agriculturalproduction function in many investment to income. The higher the productivity, developing countries should count amongits inputs the higher willtend to be the savingsand hence the not only the conventional economic factors of pro- investment ratio, and the higher the investment ratio, duction, land, labour, fertilisers, equipment, water, the more capitalper worker and hence the higher the and power, but also levelsof education of the farmers, productivity. One could also trace interdependence their nutritional status, their health, their distance between the qualityof interdisciplinary studies and from town, systems of land tenure and of familykin- the qualityof the scholars they attract. If interdependence between variablesnormally ship. All these variablesare likely, in some societies, studied separatelyis strong, or, though weak,if to be systematicallyrelated to agriculturalproduction. reaction coe Ycients arelarge, or, though smallin the Astatus conscious anthropologist willcomplain neighbourhood, if they changesize for moves above that he or she is being used only to provide fodder acriticallevel, there is acasefor breaking down the for the cannons of the economist. Aself-respecting boundaries between disciplines. This is sometimes called anthropologist mayrefuse to haveall the important transforming parameters into dependent variables. questions asked bythe economist and to be reduced Familyties and economic calculus, land tenure and to ahandmaiden, supplying lowclass empirical data responses to incentives, religious beliefs and com- for the high classanalytical structure of another mercialmotivation, prejudice and income level,may discipline. Questions of status and precedence are,of interact in this way.When interdependence of this course, not the concern of serious scholars. But it kind occurs and when the interdependent variables mayturn out that the whole notion of aproduction belong to diVerent disciplines, there is acasefor function is wrong or misleading.Perhaps there is no interdisciplinary work. systematic relationship between inputs on the one The third kind of interdisciplinary work, atadeep hand, whether of fertilised, irrigatedland, or of physical level,is the most di Ycult and is best done either capital,or of educated farmers and human capital, under one skull, or bya group of closelyassociated and crops on the other. It maybe that output depends colleagueswho stimulate and complement one another, on variablesthat havebeen observed and analysed and havesimultaneously asimilarbasic outlook. byanthropologists: the relationship between majority Some of the best economic research isasocialactivity and minority groups; religious beliefs, the Protestant that progresses most rapidlywhere asmallgroup ethic; or kinship systems. of likeminded scholars arenot atall troubled by Or again,at a di Verent levelof discourse, it may being out of step with the profession asa whole. It be that increases in output beyond adecent minimum is possible to drawtwo quite distinct conclusions arenot valuedas a crucialcomponent of develop- from such interaction. First, it maybe said that whatment. The society mayhave opted for analternative

INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 17 style of development, in which the evergrowing abstract and empirical research, between theory and production of materialgoods isrejected. Or, through observation, and cooperation of economists with ashift invaluations,negatively valued unemployment specialists from other Želds. 13 He found that in prewar maybe converted into positivelyvalued leisure. Or the Britainthere wasno shortage of empirical work. But wayin which individual or cooperative agricultural theoretical and empirical work weredone separately work and its accompanyingrites and ceremonies and distinctly, without illuminating each other. He areperformed arevalued for themselves, not only as quoted the philosopher Immanuel Kant: ‘Thoughts means to producing crops. Production and consump- without content arevoid; intuitions without conceptions, tion then ceaseto be distinct spheres. Or the result blind.’ of anygiven input could cruciallydepend on aseries In arguingfor interdisciplinary work, he says of preceding historical events, givingrise to di Verent that, of course, subdivisions of anarea of work are expectations, and makingit quite impossible to draw necessary. But, unlike in the natural sciences, sub- up atwo-dimensional functional relationship. Each divisions in the socialsciences arelargely abstractions point on the supply curve would be located in a from realityrather than sections of reality.Botany diVerent placeaccording to its history. is the study of plants, zoology of animals,crystal- If anyof this is the case,the crucialquestions will lographyof crystals.But economics is the study of haveto be asked bythe anthropologist or sociologist the economic aspect of socialbehaviour, lawof the or historian. He or she has to construct the concepts legalaspects, political science of the political aspects, and it is then the economist’s turn to Žllthe boxes and so on. The subdivisions turn on the deŽnitions built bythe anthropologist, sociologist, or historian. of terms and not on subdivisions inhering in the Which of these possibilities should be realised will objects of study. The conclusion does not point to depend partlyon empirical conditions, and ultimately largecooperative teams doing research on asubject. on valuationsand the choice of lifestyles. Durbin callsthem ‘white elephants in labour to pro- American education and, Isuspect, European duce platitudinous mice’. Weallknow that the best education also,is extremelyhostile to multi- and interdisciplinary research is carried out under one skull. interdisciplinary studies, whateverthe professions of The rejection of the need for interdisciplinary scholars maybe. CharlesRoos 11 reported acasethat studies is another aspect of the turning inwards of suggested the di Yculties of combining mathematics, modern economics, and this is aspeciŽcally American statistics, and economics. Ayoung economist sought feature. The universe is not divided alongthe same to extend static economic theory into atestable lines asthe university. But it is university departments dynamicstructure. His paper used technical math- that dictate whatshould be incorporated inresearch, ematics and statistics. AleadingAmerican economics appointments of faculty and their promotion, not journal refused to publish the paper unless he removed the problems of the realworld. And the work will the mathematics and statistics. Amathematics journal be judged, not bycriteria of relevance,but bythe would publish it only without the statistics and standards of excellenceevolved from within the economic theory. Astatistics journal demanded that discipline. 14 he eliminate the mathematics and the economics. The articleis nearlyŽ fty yearsold, but nothing much has changed since then: Ihaverecently known of aŽne scholar who combined macropolitical analysiswith Theuse of mathematics villagestudies and the impact of these on intrafamily Frank Hahn, on his retirement, recommended to young relations. It wasa combination of anthropology, economists ‘to avoiddiscussions of ‘‘mathematics in political science, and economics. She wasrefused tenure economics’’ like the plague’. Ishallrisk the danger atan American University on the grounds that the of infection and saysomething about it. subject did not Žtinto anysingle discipline. Paul Samuelson in his ‘Foundations of economic Realism would callfor allrelevant disciplines to analysis’quotes J.Willard Gibbs: ‘Mathematics is a be brought to bear on the solution of aproblem. language.’There canbe no objections to the use of Gunnar Myrdalused to saythere arenot economic this languageor jargonwhere it is appropriate. But and other non-economic problems, there areonly users of it should know its limitations aswell as its problems. ‘In fact the problems arenot economic, scope. Some economists and writers of articles should social,ecological, psychological, etc., but just problems, perhaps be reminded that English,also, is alanguage. intermingled and complicated.’12 Some scholars, mostly The objections to the use of mathematics in economics of the older generation, haveinvestigated the real do not relate to whatit includes, but to whatit world: Herbert Simon, WassilyLeontief, and Albert excludes from consideration. The complaint is both Hirschman areexamples. But fewamong the younger about whathas to be left out from other disciplines, generation of tenured American economists have and about the spread of mathematics beyond its followed in their steps. legitimateboundaries. What is needed is addition and E.F.M.Durbin, abrilliant British economist who containment. Kenneth Boulding has saidthat he wasdrowned when young, wrote anarticle in 1938 knows ‘of no mathematicalexpression for the literary inwhich he pleaded for two things, aunion between expression ‘‘Iloveyou.’ ’ ’15 In amore recent paper

18 INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 Boulding wrote: ‘[mathematics] is alanguage– or In another letter to Bowleyhe wrote (Ref. 17,p. 427): perhaps weshould saya jargon– with anextra- Ihada growingfeeling in the later years of my work at ordinary paucity of verbs –it is hard to think of thesubject that a goodmathematical theorem dealing more than four: equals, is greaterthan, is less than, witheconomic hypotheses was very unlikely to be good and is afraction of.’16 economics:and I wentmore and more on the rules – (1)Usemathematics as a shorthandlanguage, rather It is alsotrue that from its beginnings economics thanas an engine of inquiry.( 2)Keepto them until you has been couched in formal arguments. The models aredone. ( 3)Translateinto English. ( 4)Thenillustrate wereoften implicit rather than explicit.Even the byexampleswhat are important in real life. ( 5)Burnthe politician, the o Ycial,and the practicalman, when mathematics.( 6)Ifyou can’ t succeedin ( 4),burn( 3). putting forward some explanation or recommendation, Thislast I didoften. has some kind of model atthe back of his mind. Keynes, himself no mean mathematician, wrote Joan Robinson once said,‘ Idon’t know mathematics, that ‘…symbolic pseudo-mathematical methods of therefore Ihaveto think.’But it canbe rightlyargued formalizing asystem of economic analysis… allow that it is avirtue to make relationships explicit rather the author to lose sight of the complexities and than leavethem implicit. interdependencies of the realworld in amazeof It is often claimed that the virtue of mathematics pretentious and unhelpful symbols.’18 is that assumptions, deductions, and conclusions are Manyother distinguished mathematicaleconomists, spelt out precisely, whereasverbal economics permits from Simon Kuznets to Kenneth Arrow, Gerard fuzziness. Abstraction is of course necessary in all Debreu, LawrenceKlein, Kenneth Boulding, Ragnar thinking. But not allabstractions areequally useful, Frisch, E.H.Phelps Brown, DavidW orswick, and and some aredeŽ nitely misleading.Nor is math- WassilyLeontief havebeen similarlycritical of the ematicalreasoning exempt from fuzziness. Fuzziness abuse and excessiveuse of mathematics in economics. enters into mathematical economics when a, b, c Some of these repent in presidential addresses, but areidentiŽ ed with individuals, Žrms, or farms. The then goawayand sin again.The criticism is directed identiŽcation of the precise symbol with the often atthe triumph of technique over substance, of form ambiguous and fuzzy realityinvites lackof precision over content, of eleganceover realism.It is true that and blurs the concepts. Mathematical economists are mathematics has asimplicity, beauty, and elegance also unrigorous in spelling out whatwould haveto that areseductive. But ascontrasted with evolving be the casefor their exercises to be applicable.There its own standards of excellence,one mayask: what is often alackof realism in their assumptions. This does it contribute to either understanding, or pre- maybe avirtue, for alltheory has to abstract, has diction, or prescription? Mathematics should be the to leaveout manyfeatures of acomplex reality,but servant of economics, not its master. ifthe abstractions areof the kind that pours out the WassilyLeontief, in his presidential address to the babyinstead of the bathwater, it is damagingto an 1970meeting of the American Economic Association, understanding of reality.Accusations that economics condemned ‘preoccupation with imaginary,hypo- 19 isthe science that arguesfrom unwarranted assump- thetical, rather than with observable reality’. In a tions to foregone conclusions then become justiŽed. letter to Science magazinehe wrote, ‘Pageafter page The correct inference from clearlystated premisses of professional economic journals areŽ lled with leads to validconclusions. The correct analysisof mathematicalformulas leadingthe reader from sets of states and events in the world is calledtruth. There more or less plausible but entirely arbitraryassump- tions to precisely stated but irrelevant theoretical aretwo dangers in anoveruse of mathematics in conclusions.’As agood empiricist, Leontief then economics. First, aswe have seen, validitycan be investigated recent articles in TheAmerican Economic mistaken for truth. Deductions from artiŽcial models Review.He found that Žfty-four per cent of articles canbe mistaken to be descriptions and analysesof were‘ mathematicalmodels without anydata’ . Another the realworld. Second, the time and e Vort devoted twenty-two per cent drew statistical inferences from to deducing theorems canbe atthe expense of investi- datagenerated for some other purpose. Another gations of realevents. The result is the exclusion of twelveper cent used analysiswith no data.Half of certain questions and techniques of understanding one per cent used direct empirical analysisof data the world. There is evidence that economics has fallen generated bythe author. foul of both dangers. One maybe forgiven if one feels that some forms In afrequently quoted passagefrom aletter to of mathematicaleconomics should be activitiesper- 17 A.L.Bowley,Alfred Marshall wrote: mitted only between consenting adults in private,or Inmy view every economic fact whether or not it is of that they resemble masturbation in that they yield sucha natureas to be expressed in numbers, stands in enjoyment to the practitioner without anycontact relationas cause and e Vectto many other facts, and since it never happensthat all of them can be expressed needing to be made with outside reality.Y etit is true innumbers, the application of exact mathematical methods that training in mathematics should probably be a tothose which can is nearly always a wasteof time, while condition for atraining in economics. The reason for inthe large majority of cases it is positively misleading; this is that otherwise the economist would not be andthe world would have been further on its way ableto see through the awedreasoning. When the forwardif the work had never been done at all. non-mathematical economist picks up anissue of a

INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 19 current economic journal, he mayfeel like Diderot The proof of the pudding is in the eating.Has atthe court of Catherine the Great when Euler said mathematics advancedthe subject; yielded newinsights; to him, ‘Sir, ( a+b)/n=x,hence God exists; reply!’provided deeper analysis;contributed to more accurate And, like Diderot, he mayslink awayin shame. Or predictions or better prescriptions and policies? I (as Samuelson has pointed out),he maydisbelieve suggest that, on the whole, and with the exception of the next mathematician who later comes alongand some important and applicableinsights from game giveshim atrue proof of the existence of the Deity.theory, the results havebeen quite puny compared What arethe reasons for this dominance of math- with the sophistication of the apparatus. Those not ematics, for the priority of form over content, of ableto handle the mechanics of modern mathematical technique over relevanceand realism? Some blame economics mayfeel like the handloom weaverswhen Milton Friedman’s ‘asif ’doctrine (that assumptions the power loom wasintroduced. But they canŽ nd need not, indeed should not, be realistic)and the comfort in the fact that the power loom weavershave romantic desire to pass asa scientist. 20 Toadapt abeen weavingthe Emperor’s newclothes. term from psychoanalysis,economists su Ver from As Martin Hollis once remarked, aman who is physics envy.At the end of the nineteenth century, tryingto Žnd alargepiece of buttered toast to sit on with the marginalrevolution, mathematics wasintro- is not usuallythought to be rational if his action is duced into economics byW alras,Cournot, Jevons, ‘rationalised’by being shown to be consistent with Pigou, Fisher, Edgeworth, and others to make it more his belief that he is apoached egg.I conclude that like physics, and to raisethe status of economists. mathematics has its placein economics, but that Since then, and particularlysince the 1950s,it has it should be kept in its place.We should use math- come to dominate the subject. ematicalanalysis like graftingbody parts onto a Some of the reasons areinternal, others external. livingbody in spare parts surgery.Quantitative and The doctrine of Milton Friedman that lackof realism qualitativearguments canthen be combined, formal of assumptions is avirtue has alreadybeen mentioned. and non-formal methods canbe used, historical and Lackof realism mayhave two quite distinct meanings. anthropological insights canbe added, and afuller All thinking and theorising has to select, to abstract, understanding canthus be reached. from reality.It is like makinga map, which cannever incorporate everyfeature of reality. 21 This is its Thecurrent state ofeconomics virtue, for without leavingout irrelevant features, we could not Žnd our wayand the map would be useless. What is the di Verence between aspecialist and a This type of ‘distortion’of reality,which selects generalist? According to awellknown quip, the relevantfeatures and leavesout irrelevant ones, is specialist knows more and more about less and less, indeed avirtue. until he knows everythingabout nothing; the gen- This is not whatFriedman’ s doctrine says.eralist know less and less about more and more, until According to Friedman, only the predictive power of he knows nothing about everything.The realquestion the theory is relevant:if it yieldscorrect prediction, behind this quip is, should awelltrained economist the assumption maybe asfar removed from reality concentrate on afewareas or spread his research aswe wish, indeed may yin its face.But Žrst, widely? theories mayhave other functions than prediction; The obvious answeris that this should be left to the they mayexplain, illuminate, or prescribe. Second, it preferences of the individual in question. The spark ishard to see whyincorrect assumptions should yield of good, originalwork is so rare that it should be systematicallycorrect predictions. Bethis asit may,fanned whereverit strikes, whether in aconcentrated the Friedman doctrine wasone ground on which or diluted form. But there areprofessional pressures mathematicaleconomists could proceed without for appointments and promotions that guide ascholar testing the correspondence of their symbols to real in his preferences. Tothe question, ‘What is your entities. Želd?’, the economist eagerto advancetheir career Among other internal reasons is the already must havean answer. And it is often better for his mentioned beauty and eleganceof mathematics, the or her advancement if the Želd isalittle patch. prestige attached to it, and the standards of excellence Modern economics has become too narrow, aswell evolvedfrom within it. But Isuggest that among the astoo far removed from reality.The German term externalreasons there maybe one to which little for the product of manyeconomics graduateschools attention has been paid. The political pressures of is Fachidiot, the French idiotsavant .Robert Kuttner McCarthyism in the 1950splayed, I think, animportant wrote: ‘Departments of economics aregraduating a part. Economics deals with people’s pockets and their generation of idiotssavants ,brilliant atesoteric math- ideals– ahighlyexplosive mixture. To be accused ematics yetinnocent of actualeconomic life.’23 As of criticising the capitalist system and pandering to Jacob Viner once said,‘ men arenot narrow in their socialism wasvery dangerous in the 1950s.Yet, any intellectual interests bynature; it takes specialand honest economist looking atthe realworld would rigorous training to accomplish that end.’24 And havehad to come up with some criticisms. So math- when graduatestudents wereasked in the elite US ematics provided asafe escape mechanism that drove university economics departments whatthey disliked economists awayfrom political and economic reality. 22 most about their graduateschools, the majorityof

20 INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 comments mentioned the heavyload of mathematics The problem with this narrow, unrealistic, self- and theory and alackof relevanceof the material satisŽed, often intolerant approach to economics is they werelearning ( Ref. 24,p. 14). not only that those educated in America and the con- Iagreewith AmartyaSen in believingthat juggling sumers of their product su Ver professional debilitation, lots of ballsclumsily is superior to displayingvirtuosity but that the inuence is worldwide. Students from with only one ball.If this means that some precision overseas, including manydeveloping countries, if they mayhave to be sacriŽced, the broad gaugedeconomist return to their homes, areimbued with the spirit. mayprefer being vaguelyright to being precisely wrong. But this is not all.Even those who never leavetheir If Icould choose between being accused of reductionism home countries arepowerfully inuenced bythe thrust and fuzziness, Ithink Iwould prefer to be accused of whatis being published in the top journals in of fuzziness. Robert Solow said that reductionism is America. This form of diversion of brainpower adds not the occupational disease of economists, it is their to the losses su Vered from the externalbrain drain occupation. IŽnd this regrettable. (the loss of educated, professional people to the rich There is the widespread impression amongeconomists countries) and maybe calledthe internal brain drain. that there is ahigh degree of consensus on modern Its pernicious inuences area multiple of those of economics in the profession. An interesting articleby the externaldrain. Bruno Freyand others tested the degree of consensus There are,however, signs that things maybe and disagreement amongst economists in di Verent changingfor the better and that the crest of the wave countries.25 American, Swiss, and German economists of unreal and escapist economics maybe past. The tend to support competition and free markets, journal EconomicPerspectives communicates to awide and hence neoclassical economics, whileFrench and audience and raises important realworld questions. Austrian economists aremore inclined to support The awardof the John BatesClark Medal to the government interventions. (The Austrian viewon labour economist DavidCard from Princeton is one these questions is, of course, quite di Verent from the of them. DavidCard with Alan Krueger –ex-chief ‘Austrian school’in economic theory.) The results economist to USLabor Secretary Robert Reich – has done important empirical, unconventional work suggest agood dealof inbreeding among American on subjects such asminimum wagesand the impact economists. Theymistake their viewsfor generally of education on earnings. Another sign is the appear- accepted ones. This is largelythe result of the pro- anceof articles in the AmericanEconomic Review on vincialismof American economists, in turn partlythe subjects such aseconomic growth and income distri- result of the largesize of the country. Theyhave little bution, also using empirical data.The USNational notion of whatis being thought and written outside Bureau of Economic Research set awhole dayapart their borders. in 1998(‘ National Security Day’) to discuss pensions Robert Frank and others investigated whether and drew on experts from various Želds. studying economics (in America) inhibits cooperation and makes students less cooperative and more self- interested. 26 After surveyingseveral other studies and conducting their own, they found that economics Scienceand cryptoscien ce students aremore self-interested than others, and If the socialsciences, including economics, are that it is not self-interested people who areattracted regarded asa ‘soft’technology compared with the to the study of economics, but that it is the study of ‘hard’technology of the natural sciences, develop- economics that makes people more self-interested. 27 ment studies is regarded asthe soft underbelly of Theyconclude that emphasis in teaching on the self- ‘economic science’. Ihaveheard it being equated to interest model inhibits cooperation. As the authors economics minus logic.In the attempt to emulate point out, self-interested responses canbe counter- colleaguespractising ‘hard’economics, wehave seen productive. The ultimate victims of non-cooperative mathematical methods brought to bear on issues for behaviour maybe the verypeople who practise it. In which they areinappropriate. conclusion the authors suggest that ‘economists may In his Romanes lecture, ‘Fathers and children’, Isaiah wish to stress abroader viewof human motivation Berlin illustrates how whatwas once revolutionary intheir teaching’( Ref. 26,p. 171). has become establishment doctrine byreference to Asurveyby Arjo Klamer and DavidColander Turgenev:28 asked American students ata fewtop universities Thevictorious advance of quantitative methods, belief whatthey regarded asthe conditions for success inthe organisatio nofhuman lives by technologic al in the economics profession. 24 ‘Knowledge of the organisation,reliance on nothing but calculation of economy’, ‘knowledge of economic literature’, and utilitarianconsequences in evaluating policies that a Vect ‘being interested in, and good at,empirical work’ vastnumbers of human beings, this is Bazarov, not the Kirzanovs.The triumphs of the moral arithmetic of cost ranked lowand in this order (with ‘knowledge of the eVectivenesswhich liberates decent men from qualms, economy’at the bottom), compared with ‘being good becausethey no longer think of the entities to which they atproblem solving’, ‘excellencein mathematics’, ‘being applytheir scientiŽ c computationsas human beings … veryknowledgeable about one particular Želd’, ranked thistoday is rather more typical of the establishment from the top down. thanof theopposition.

INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 21 Growing concern with socialobjectives –employ- the form of oligopoly and monopoly power –the ment, poverty, women, equality,the environment – power of largelandowners, of bigindustrialists, has led in the past to callsfor the ‘dethronement of of multinational corporations GNP’, which (erroneously) has been regarded asan d in a diVerent Želd but sometimes equallydis- economic objective. But the fault inthe preoccupation ruptive, the power of organised labour unions and with GNP has been excessiveattention to asimple the obstacles to anincomes and employment quantitative index, irrespective of the valuations policy that would create full employment without implicit in its sets of weights,in other words of its in ation composition, distribution, and the manner in which d restricted access to educational opportunities, it wasproduced. The danger is that the same fault the imbalancein education, and the resulting job is repeated when simple indexes areconstructed for certiŽcation that both reects and reinforces the socialand human objectives. The proportion of unequal structure of power and wealth the GNP earned bythe bottom forty per cent, or the d weakentrepreneurship and defective management Gini coeYcient, or the Human Development Index and administration of public enterprises, private of the United Nations Development Programme’s Žrms, the civilservice, and some NGOs Human Development Reports arejust asinadequate, d lackof coordination between central government and, if used only bythemselves, just asmisleading and regional,local, and project administrations. measures of whatwe are getting at when wetry to Too manycountries arebetter on planning than eradicate poverty, or reduce inequality, or remove on administration and implementation unemployment, asGNP isaninadequate measure of d weakness of the structure, areasof competence, productive capacityor economic welfare. recruitment, training,and administration of the Inequality of income distribution touches only a UNagenciescharged with development, com- smallportion of the vast,multidimensional problem bined with afrequently narrowlytechnocratic of inequality.There is alsoinequality of ownership of approach encouraged bythe location, origin, and assets, of access to assets and to earningopportunities, organisation of these agenciesand their politically ‘non-controversial’approach of satisfaction derived from work, of recognition, d Žnallythere arethe terrible facts of mass slaughter status, prestige, of abilityto enjoy consumption, of of ethnic or religious minorities (often entre- access to power, of participation in decisionmaking, preneurial and therefore hated)and political of freedom of choice, and manyother dimensions. opponents, torture, imprisonment without trial, The callfor greaterequality, for agenuine community expulsion, and the vastsums spent on armies and of equals, cannot be answered simply bymeasures the police and other horrors. that reduce the Gini coe Ycient or anyother simple This list is not exhaustivebut merelyillustrative. But measure of inequality, which areinadequate evenin it shows that the temptation to select the quantiŽed expressing whatconcerns us in grosslyunequal income and quantiŽable at the expense of other, possibly distribution. It is possible to envisagea technocratic more important areasreinforces political reasons for society, in which decisions arehighly centralised and avoidingthese problems and strengthens the vested in which afewenjoy the satisfactions of power and interests that beneŽt from the status quo. creativitywhile the manycarry out boring or disagree- In afamous passagein ‘Valueand capital’, John abletasks or areunemployed in ahierarchic structure, Hicks wrote that the assumption of perfect com- in which the Gini coe Ycient is zero or in which at petition must be retained, or else the whole of economic least there is no poverty. Kurt Vonnegut describes theory would be awreck. In his later dayshe regretted vividlysuch asociety in his novel ‘Playerpiano’ . The this and turned to apleafor amore realisticeconomics; materiallysatisŽ ed but otherwise deprived underclass but the priority of preserving anabstract, theoretical eventuallyrebel. structure that yieldsto techniques over understanding The danger of research in economics that attempts the realworld has permeated economics. Equilibrium to emulate the ‘hard’sciences is that it selects the analysistakes acentral placealthough its lackof measurable and neglects the rest: only whatcan be realism is generallyrecognised. AmartyaSen has counted counts, or evenexists. (Asecondary danger pointed out that the use of equilibrium based reason- where statistics arevery unreliable is to say‘ anyŽ gure ingis subject to criticism. In particular, questions is better than none’.) Some of the most important should be asked about its existence, its uniqueness, obstacles to the eradication of poverty and the reduction its stability,and its e Yciency.29 of gross inequality liein areasin which measurement Equilibrium maynot exist.Even if it does exist,it is still verydi Ycult or perhaps impossible. Among maynot be unique. Evenif it exists and is unique these arethe following: it maynot be stable. And it mayexist, be unique, d unwillingness of governments to graspthe and be stable, but be ine Ycient in the sense of not political nettles –land reform, taxreform, labour achievingPareto optimality. As Sen goes on to say, mobilisation, widening access to education and frequently the mere presence of competition is taken health services –aswellas, and linked with these, to entail the existence, uniqueness, stability,and elitism, nepotism, corruption. Behind these again eYciencyof ageneralequilibrium. The di Yculties of arevarious forms of power concentrations in equilibrium economics arenot primarilywith the idea

22 INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 itself. Theylie in the waythe ideais applied. Among M. F. Scott,and J. N.Wolfe);1970, London, Clarendon the critics of the competitive equilibrium approach Press; w. leontief:‘Theoreticalassumptions and non- to economics havebeen J.K.Galbraith 30 and Janos observedfacts’ ( PresidentialAddress to the American Kornai,31 but their writingshave not been accepted EconomicAssociation, 29 December 1970 ), American bythe profession. EconomicReview , 1971, 61, 1–7; g.d. n. worswick : ‘Isprogressin economic science possible?’ ( Presidential Similarly,the rejection of the assumption of Addressto Section F ofthe British Association, increasing returns, ubiquitous in reality,by equi- 2September1971 ), EconomicJournal , 1972, 82, librium analystshas made economics lose touch with 73–86; e.h. phelps brown :‘Theunderdevelopment reality.The importance of increasing returns has been ofeconomics’ , EconomicJournal , 1972, 82, 1–10; recognised bygreat minds like Adam Smith, Allyn g.s.l. shackle :‘Epistemicsand economics: a critique Young, Piero Sra Va,and Nicholas Kaldor, but has ofeconomic doctrines’ ; 1972,Cambridge, Cambridge not found the placeit deserves in the analysisof UniversityPress. mainstream economists, because the formal analytical 4. See davidcolander :‘Reformof graduate education apparatus is absent. ineconomics’ (mimeographed ); also‘ Whyaren’ t In development economics the important question economistsas important as garbagemen?’ ; 1991,New is: whatare the springs of development? Many York,NY, Armon.I amgreatlyindebted in this paper would stress the importance of entrepreneurial and toDavid Colander’ s incisivecritique of economics.An extremecritique is Hazel Henderson’ s, who regards managerialmotivation and attitudes, of education of moderneconomics ‘ asa formof brain damage’ . the right kind, and of appropriate institutions. But 5. annekrueger et al.:‘Reportof the Commission on wedo not know whatcharacteristics make for the GraduateEducation in Economics’ , Journalof Economic socialselection of aninnovating, entrepreneurial group, Literature, 1991, XXIX,1035–1053. whilemany papers arewritten on years,months, 6. g. s. becker:‘Theeconomic approach to human days,and hours of schooling or the number or pro- behavior’; 1976,Chicago, IL, Universityof Chicago portion of engineers and scientists. Neither innate Press,and ‘ Atreatiseon the family’ ; 1987,Cambridge, characteristics nor education nor religion canexplain MA, HarvardUniversity Press. whysome societies, atcertain periods, arebetter and 7. charlesk. rowley ,robertd. tollison , and gordon quicker atinnovating than others atother times. Innate tullock (ed.):‘ Thepolitical economy of rent-seeking’ ; characteristics aredistributed according to normal 1987,Boston, MA, KluwerAcademic. distribution curves. The levelof scientiŽc education 8.This applies to all the criticisms of the education of economistsmade in this paper. The truly top people is quite high in manysocieties, such asIndia, in will alwaysovercome these handicaps and teach them- which innovation is poor, and viceversa; and all selves;it is the average student with whom we should kinds of religion besides Protestantism haveproved beconcerned. to be consistent with innovativebehaviour: Roman 9. a.o. hirschman :‘Exit,voice and loyalty’ ; 1970, Catholicism in Austria and Malta,Hinduism in East Cambridge,MA, HarvardUniversity Press. Africa, Confucianism and Buddhism in EastAsia. 10. michaellipton :‘Interdisciplinarystudies in less What weneed is anexplanation of why,in some developedcountries’ , Journalof Development Studies , societies, with the right education, innate character- 1970, 9, October. istics, and religion, the ablest and Žttest, the ‘brightest 11. charlesf .roos : Econometrica ,1948,April. and the best’, the creativeinnovators, arenot 12. gunnarmyrdal :‘Theunity of the social sciences’ , attracted to production and business but, instead, to HumanOrganization , 1975, 34, 327. politics, universities, or the civilservice. 13. e.f .m. durbin :‘Methodsof research – apleafor cooperationin the social sciences’ , EconomicJournal , At the end, wemust confess that wecannot answer 1938, 48, 183–195. the most important question in development economics, 14.My friend Hugh Stretton wrote to meafterreading an that wedo not know whatcauses successful develop- earlierdraft of this paper. ‘ As IŽnishedreading the ment. But wemust try to resist the temptation to paper,one more argument occurred to me …Tocome which so manyhave yielded, to behavelike the drunk toeconomics from another discipline, with another who has lost his keyand looks for it not where he structureof social theory in one’ s head,induces an dropped it but under the street lamp –because that instrumental,perhaps more sceptical view of theory iswhere the light is. itself.All butthe brightest Economics I undergraduates tendto learn that national income, opportunity cost, marginalvalue (and all the rest )arefacts out there in Notesand literature cited theeconomy, to be observed and respected. That is 1. j. m. keynes:‘F.P.Ramsey:an obituary’ , Economic harderto swallowif you come to classwith Parsonian Journal, 1930, 40,153–154 (reprinted in j. m. keynes: sociologicaltheory or Austinian theory of law or ‘Essaysin biography’ ; 1933,London, Macmillan). pluralistpolitical science in your head. If the theory 2. j. m. keynes:‘Essaysin biography’ , 150–266;1933, youbring is mostly bad, that prompts scepticism London,Macmillan. abouteconomic theory; if it is good … thatprompts 3. k.e. boulding :‘Theeconomics of knowledge and the scepticismtoo. The e Vectis not necessarily pragmatic knowledgeof economics’, in‘ Economicsof information anti-theoretical;on the contrary it may rub in the andknowledge’ , (ed.D. M.Lamberton);1971, London, lessonthat one must select, simplify, distil (etc.) to Penguin; r. frisch:‘Induction,growth and trade. graspsuch complicated life. But it can teach people to Essaysin honour of Sir Roy Harrod’ , (ed.W. A.Eltis, thinkof theory as a toolkit,useful in relation to their

INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1 23 purposesof study and action; with the need to change choice’, AmericanEconomic Review , 1995, 85, 15). someof the tools as either the life out there changes, Alexisde Tocqueville thought so: ‘ TheAmericans … orthe student’ s socialpurposes do. They should be arefond of explaining almost all the actions of their lessprone to hit Ming vases with the hammer – or livesby the principle of self-interestrightly understood; tryto understand relations between employer and theyshow with complacency how an enlightenedregard employeeby means of theory designed to explain the forthemselves constantly prompts them to assist one supply,demand, and price of carrots.’ anotherand inclinesthem willingly to sacriŽce aportion 15. kennethboulding :‘Samuelson’s foundations:the role oftheir time and property to the welfare of the state. ofmathematics in economics’ , Journalof P olitical Inthis respect, they frequently fail to do themselves Economy,1948,187– 209 (quoted in munirquddus justice;for in the United States as well aselsewhere and salimrashid :‘Theoveruse of mathematics in peopleare sometimes seen to give way to those dis- economics:Nobel resistance’ , EasternEconomic Journal , interestedand spontaneous impulses that are natural 1994, 20, 257). toman; but the Americans seldom admit that they 16. kennethboulding :‘Economicsas an institution’ , in yieldto emotions of this kind; they are more anxious ‘TheŽ fthannual Kenneth Parsons lecture series’ ; 1989, todo honour to their philosophy than to themselves.’ Boulder,CO, IBS(also quoted by Quddus and Rashid 29. isaiahberlin :‘Fathersand children’ ; 1972,Oxford, in‘ Theoveruse of mathematics in economics’ (see ClarendonPress. Ref. 15)). 30. amartya sen:‘Economicmethodology: heterogeneity 17. alfredmarshall :Letterto A. L.Bowley,3 March andrelevance’ , Methodus, 1991, 3, 70. 1901,in ‘ Memorialsof Alfred Marshall’ , (ed.A. C. Pigou), 31. j.k. galbraith :‘Americancapitalism: the concept of 422;1966, New York, NY, AugustusM. Kelly. countervailingpower’ ; 1952,Cambridge, MA, Riverside 18. johnma ynardkeynes :‘Generaltheory of employment, Press;‘ Thea Zuentsociety’ ; 1958,Boston, MA, Houghton MiZin;and ‘ Thenew industrial state’ ; 1967, interestand money’ , 297–298; 1947, London, Macmillan. Boston,MA, HoughtonMi Zin. 19.Quoted by Robert Kuttner in ‘ Thepoverty of 32. j. kornai:‘Anti-equilibrium’; 1971,Amsterdam, economics’, AtlanticMonthly ,1985,February, 74– 84. NorthHolland. 20. frank hahn:‘An intellectualretrospect’ , BancaNazionale delLavoro Quarterly Review ,1994,September, 246. 21.Salim Rashid commented: ‘ Idonot like the analogy witha map.Chicago remains in Illinois regardless of scale.I amnot sure this applies to economics.’ He is quiteright that in economics, as we haveseen, there isa lotof throwingout of babiesinstead of bathwater. PaulStreeten 22.Interestingly, Gordon Tullock also considers math- Box 92 ematicaleconomics as escapism, but in his case it isan Spencertown escapefrom the antimarket sentiments that he regards NY 12165 ascharacteristic of most American universities, especially USA outsidethe economics departments. ppstreeten@taconic.net 23. robertkuttner :‘Thepoverty of economics’ (see PaulStreeten is professor emeritus of economics of Boston Ref. 19). University,and a consultantto the UNDP (wherehe 24. arjo klamer and davidcolander :‘Themaking of an workedwith Mahbub ul Haq on theHuman Development Reports)and UNESCO. He is an honoraryfellow of Balliol economist’, 16;1990, Boulder, CO, WestviewPress. College,Oxford (where he was a fellowfrom 1948 until 25. brunos. frey , wernerw .pommerehne , friedrich 1978)andof the Institute of Development Studies, Sussex schneider, and guy gilbert:‘Consensusand dissension (wherehe wasa fellowand professor from 1966 until 1968 ). amongeconomists: an empirical inquiry’ , American HewasDeputy Director-General of Economic Planning in EconomicReview , 1984, 74, 986–994. theBritish Ministry of Overseas Development between 26. roberth. frank , thomasgilovich , and dennis 1964and 1966. Streeten is founder of the journal World t. regan:‘Doesstudying economics inhibit co- Development ;amonghis books are ‘ Developmentperspectives’ operation?’, Journalof Economic Perspectives , 1993, (1981),‘Firstthings Ž rst’( 1981),‘Whatprice food?’ ( 1987), ‘Beyondadjustment’ ( 1988),‘Mobilizinghuman potential’ 7, 159–171. (1989),‘Strategiesfor human development’ ( 1994),‘The 27.Amartya Sen raises the interesting question whether UnitedNations and theBretton W oodsinstitutions’ ( 1995), thepresumption of exclusive self-interestedness is ‘Thinkingabout development’ ( 1995,paperback 1997 ),and morecommon in America than in Europe, without ‘Globalisation:threat or opportunity?’ ( 2001). characterisingactual behaviour (‘ Rationalityand social

24 INTERDISCIPLINARY SCIENCE REVIEWS, 2002,VOL. 27, NO. 1