Monday, December 13, 2010

An Economic Renaissance

Why should you read this blog? Don't. It will bore the hell out of you. It will probably go way over your head and leave you totally bewildered and befuddled. Damn. That's not a good start.

Rational people don't waste their time worrying about rationality. So yes, economists are irrational oddities. Why should anyone care what they have to say? Well, beneath all of their fancy rhetoric, self-absorption, and masturbatory erudition, many economists actually have quite interesting things to say. Unfortunately, because they rarely communicate in any language spoken by humans, the majority of their most salient points are never known. Economicese. That's their language. It's like legalese, but far more rational and ten times more impenetrable. Fear not, though. I'm here to translate.

I'm a good translator because I barely speak the language myself. What? That's not encouraging? I used to worry about it, too. However, after some years studying economics I came to realize something important. It's the language of economics that is often incoherent. Let's illustrate this with a little analogy. Imagine learning a language. Say, French. After learning the basic grammar rules, your language teacher tells you they no longer apply when using bigger words or a thick accent. More still, actually learning French really isn't important. It's a very common language, and no one will be impressed by it. Better to learn Yiddish. If you become really good with Yiddish you'll be better able to intimidate your French speaking friends. If you simply belittle them enough for not speaking Yiddish, they'll feel too marginalized and will be too embarrassed to argue.

So it goes with economics. The most powerful, most well-established, most understood concepts - such as scarcity, the law of demand, and opportunity cost - get overshadowed by discussions of things like augmented Dickey-Fuller tests and instrumental variables. Do those latter concepts/approaches merit discussion? Certainly. But, not at the expense of communicating effectively. Complex methodology should not become an automatic replacement for simpler, more effective, more honest approaches, if such techniques suffice. Discussions limited to an elite cadre are not as subject to critique, and they are not as likely to be disseminated and operationalized. Indeed, much within economics is worse than wrong. Yes. Worse than wrong. A concept cannot be wrong if it cannot ever by operationalized or evaluated. Pure theory is fun for musing. Just like I enjoy those old metal puzzles with rings and odd shapes, I also enjoy musing over the financial applications of geometric Brownian motion. But, such theoretical musings are nothing more than an academic reverie if never applied. Many economists are beginning to realize this. Economics is waking up.

What if economics weren't the "dismal science"? What if economists spent a bit less time salivating over autoregressive distributed lags and a bit more time actively fighting inner-city poverty and malnutrition? What if economists creatively engaged with data analysis using tools and programs not developed 30 years ago? What if economists actually acknowledged the Web 2.0 revolution and used wonderful software tools and apps to better share their knowledge? What if economists actually had hearts?

Wow. Now that would be an incredible world in which to live. That would be a world in which I'd actually want to be known as an economist. Well, thank Schumpeter. Something good may yet come from this awful recession, because that spark of creative energy, that urge for a rebirth in the discipline of economics - it's just perceptible. You can see it flare up on the blogosphere and smolder in the Twitterverse. Once in a while, it even burns its way into newspapers and mainstream media. Most established economists, when they see this flame of renaissance, they unzip their pants and piss on it for all their worth. But not all. Somehow, I believe this fire of energy and truth will not be easily extinguished.

So, that brings me to my conclusion. Just what the hell my blog is about. All popular blogs try to capture some some unique angle, to tease out snippets of wisdom in a particularly specialized niche. I'm doing more of the same. My niche of note: new economics. I aim to use this blog as a forum to bring together the disparate voices of the economic renaissance. Every time I read an article or listen to a debate worthy of attention, I'll make certain to share it. In particular, I aim to pay particular attention to new methods, models, and the search for novel approaches.

I'd love to have you join me in the quest. Follow my blog. Share it with friends. Maybe it will lead to nothing. Then again, every avalanche starts with a pebble.


  1. An interesting approach, Mr Clere, and most challenging to traditional economic theory as such. Although, or perhaps because I am not an economist myself, or say, if that can be said, only a third of an economist, I should have to challenge what you write in turn.

    There are several economists that are branching out of their 'economicese' sphere--Tim Hartford, Paul Seabright, Dan Ariely, Jared Diamond etc. to name only a few. However, despite of their ability to pose their economic questions in an interdisciplinary realm, and, beyond that, their talent of making economic content largely accessible to even the uninformed public, they are often times subject to criticism with regards to the trade off between populism and academic accuracy. To offer an example of a scholar whose populist work has been devastating to his academic career, you might want to look at

    For those who do not care to click on the link: Levitt has afforded himself a major faux-pas by jumping to controversial conclusions with regards to climate change and economics. Such a trade off is neither desirable nor useful. It is of no help to have Jim and Joe know stuff that frankly is a whole load of bollocks and it gets worse if they go tell their mates about it.

    My concluding remark is therefore that, on the one hand, it would be wise to be more gentle with economic academia per se, as some very good stuff does indeed come off it already (e.g. Seabright's 'The company of Strangers'), and on the other, that making economic theory accessible to non-economists must by no means compromise academic accuracy.

    I hope that was not too off-putting? For I shall be happy to follow whatever lively thing this blog is going to turn into!

  2. Where were you when I was doing a crash course in economic theory for my dissertation? :-) I'm looking forward to reading more!

  3. Fair points, Dominic. I've sketched out about 10 future topics to cover in this blog, and one of them is a discussion of economists who seem to be "doing it right." Tim Harford and Dan Ariely were already on my short list, so it's interesting how close our thoughts are on the subject. Jared Diamond, while I like reading the guy, is not an economist but a geographer.

    You're right, as well, about Levitt and Dubner. They seem to have taken that leap from the intellectually interesting to the popularly absurd. They've consistently stretched logic and investigative technique as far as possible in pursuit, it seems, of book sales. I'm not a fan of such an approach.

    Indeed, the only disagreement I have with your comment is that one should be "gentle with economic academia." This blog is an affront to the discipline, as are excellent economists like Ariely, Harford and Seabright. They are notable not because they reflect the status quo, but because they represent new approaches. It's exciting that such researchers are gaining traction, but the discipline of economics remains, in the words of economist Carmen Reinhart, an "inbred" profession.

    Anyhow, I welcome all criticism. I don't pretend to be the last word on the subject. Many of the thoughts I share will be shared because they are only half-complete. I would love for readers to actively engage with this blog. So yes, thank you Kathryn, thank you Dominic, and thank you anyone else who finds this blog useful or entertaining.

  4. hi jacob! you write like a blockbuster, i'm definitely following. :)

    incidentally, i was able to follow the levitt and dubner bit on your comment thread because, despite never having read freakonomics, i recently subscribed to their podcast. it was entertaining, but definitely lacking in rigour. (and i haven't studied economics in more than five years, so hardly in a position to judge the rigours/lack thereof of economic theory!)

    will definitely look up hartford, seabright etc. (do namedrop! i'm always on the lookout for new and interesting reading!)