These things take time

Last week, I spent a few days in the Dalton-Brand Research Room, at Duke University, skimming through the Samuelson papers. They make everybody excited there, and for good reasons. Samuelson was all over the place for about 70 years: in the academia, in the medias, in the arcane secrets of governmental policies. As a result, some of his papers read as mystery novels. There are many different plots intertwined there and you just want to read the end of the story – okay, I might be exaggerating a bit, but you get the idea. Of course, when one sees this kind of materials, he has many ideas for future papers and want to have them written – and published – as soon as possible. Accordingly, the Samuelson papers seem to generate a very competitive market. There will be a roundtable on “the prospects of writing on Paul Samuelson” at the next HES meeting, (at least) two biographical projects are being undertaken at the moment, and of course, there is also the perspective of the 2013 HOPE conference on MIT, which will hopefully result in a lot of new fascinating contributions, not only on Samuelson but on the many other important economists who interacted in this place where a lot of what constitutes the economists’ workaday toolbox has allegedly originated. There is this sensation that things will come out rather quickly but also an uneasy feeling of misplaced haste and pressure. Of course, I am not blaming anyone: that feeling has gotten all over me as well!

Yet, it is not without an afterthought that, soon after my return to Paris, I grabbed the copy of Robert Leonard’s Von Neumann, Morgenstern, and the Creation of Game Theory: From Chess to Social Science, 1900-1960 that I had ordered from my university’s library and which had finally arrived on shelf during my absence. Leonard’s book has been expected  for over a decade and it fully delivers on its promises. It does not rely on a forced grand narrative or on an overly repeated thesis. Instead, it is constructed  like an impressionistic picture, where individual paths and the larger context are subtly intertwined until they finally make sense to the reader. Robert Leonard is never where you expect him to be. When one anticipates pages on abstract formalism, Leonard depicts Chess games and the politics of Red Vienna, when one sees a critique of neoclassical economics, he describes a theory of social interaction and when one thinks of wartime reorganization of science and its aftermath, he tells the ending of a very personal journey. It is meticulously crafted, with an economy of words that makes every sentence necessary. Obviously, these things take time.

Inside Economics

Charles Ferguson’s Inside Job forces us to fundamentally rethink the connections between economics and policy making. This entangled relation runs along a number of dimension. First there is the performativity of economics: in which ways do economic theories shape the ideas of policy makers and hence the policies they enact (i.e. the Donald MacKenzie story)? Are economists and their rational market hypothesis, CAPM models and what have you responsible for the deregulation that led to the recent financial turmoil? If so, how should economics and its relation to policy making be reorganized institutionally? Second, is it at all possible to be politically and ideologically value-free as an economist? If so, how do we distinguish a value-free economist or economic theory from value-laden ones? If not, should economists always state their ideological points of view in the first disclaimer-footnote of their papers? Are there other ways to sufficiently disentangle ideology from science? Third, should economists be allowed to be paid by the private sector for their academic work? Do we need an economic code of ethics or some other kind of formal arrangement to distinguish more clearly between academic credibility and financial gain?

Luckily, we economists need not figure this out all by ourselves. In fact, the last few years have seen a surge of books discussing the role of science in the contemporary for-profit world. Gaye Tuchman’s Wannabe U (2009) tells the story of the middle ranked university that aspires to become an elite university in an age of auditing and ranking in which universities are run by business men in business suits.  Yet, although the undertone is clearly critical, Wannabe U first of all is a careful and engaging ethnographic reconstruction of the archetypical Western university that had to transform itself in the 1990s from a public institution to a private enterprise. Moreover, it reads like a novel. 

The different contributions to Harold Kincaid, John Dupré and Alison Wylie’s Value-Free Science? (2007) discuss the topic from a philosophical and theoretical point of view. The basic message is that the old fact-value distinction cannot be maintained. To some extent, that is an almost trivial point. The more important argument, therefore, is that although at some level we all know that the fact-value distinction cannot be maintained, we constantly act as if it does. That, the authors argue, is a fault of contemporary society that needs to be cured. Scientists should make clear how facts and values mingle in their work, politicians should not be allowed to rely on “objective facts,” and moral convictions should never be argued to be based on values alone. Yet, convincing as the book is, it is somewhat unfortunate that the authors do not translate their calls for action into concrete measures.     

Theodore Brown’s Imperfect Oracle (2009) is the book of a distinguished chemist, successful university administrator, and well-informed reader of sociology and philosophy who towards the end of a long career reflects on the waning authority of science. The key premise is that with all the problems the world currently faces, there is so much science could offer. Yet public opinion accepts less and less of science and scientists. Thus, the central question Brown addresses is how to restore the authority of science. This book should perhaps be read not so much as a deep or new account of the place of science in contemporary society, but rather as a well-written intellectual autobiography of one of those scientists who ruled the universities in the post war decades.  

In contrast to these three general accounts, the different contributions to Hans Radder’s The Commodification of Academic Research (2010) seek to investigate the topic from the bottom up. The book provides detailed accounts of the politics and economics of patents on academic research, the management of data , and the different sources and consequences of financial interests in academic research. Sometimes, the authors force themselves somewhat unnecessarily to infer more general claims about science, private enterprise, or autonomy. But the chapters offer enough in simply describing the different elements of corporate science.  

To save the economic discipline it would certainly help when all economists would read Kincaid’s Value-Free Science?. But before answering the bigger questions of whether economics should have a code of ethics, and how universities and research should be funded and organized, we would perhaps do good to first understand the system itself. What would most help the discussion now are detailed sociological, economic and historical accounts of how the economic discipline, economic departments, and economists function and have functioned. Both in the bygone days of the public university and authoritative science, and in the contemporary era of auditing, ranking, financial interests and business suits. Much like Tuchman’s Wannabe U or Radder’s Commodification perhaps. By chance, that happens to be what I’m doing and I’m willing to offer my expertise. Who gives me grant? I’m (still) quite cheap.

Crisis as History: Reinhart & Rogoff vs. Galbraith & Mackay

Exciting results; but not reading

My bedside table is a victim of the debt crisis – how else can I explain it being overburdened by Reinhart & Rogoff’s This time is different (2010), Galbraith’s The Great Crash 1929 (1954) and Mackay’s Extraordinary Popular Delusions (1841) ? Reinhart & Rogoff”s book nearly topped the Amazon best-seller list (only beaten by Stieg Larsson), but will it become a classic like Galbraith or Mackay? I don’t think so, even though Reinhart & Rogoff make an incredible important historical argument about national debt crisis, and crises more generally. It turns out that crises happen often – every country it seems has had one or more in recent times – they play out in various ways and there is a lot of novel data and research in the book (!) to prove it. But it’s a pain to read…

I don’t understand why it is so difficult to make an argument simply and clearly. The writing – or possibly the editing – is just poor. Never mind that they make a lot of technical points first, that’s fine; it’s the general structure of the writing which is frustrating. Whenever an argument begins to be developed (and you have to get to chapter 4 before arguments appear) they interrupt the story with two-page text-boxes, unrelated tables or other random elements. All of them valuable in their own right, but none of them in an order that makes much sense. Consider the opening of chapter five on page 68:

We open our tour of the panorama of financial crisis by discussing sovereign default on external debt… (Some background on the historical emergence of sovereign debt markets is provided in box 5.1). Figure 5.1 plots the percentage of all independent countries… [and between 1820-1840s] nearly half the countries in the world were in default (including all

That’s where the page ends… ! The next two and half pages are one long text box, and thereafter the sentence “(including all…” is completed. By the next page we get to see figure 5.1 (promised at the start), but they throw in figure 5.2 for good measure, not that it’s clear what it means yet (Reinhart & Rogoff, 2010: 68-72).

A classic; and great read

It’s annoying. And particularly so, as Reinhart & Rogoff has such an important point to make, with such interesting data. Apparently it took 10 years to write this book. I wish they’d spent some more time editing. There is a reason why Galbraith’s and Mackay’s work not only became standard references in the literature (as Reinhart & Rogoff’s will), but also became classics (which Reinhart & Rogoff’s won’t). The classics are well researched and well written. At times wonderfully so; as with Galbraith’s commentary on how banks are shy to advertise their very efficient operations which actually facilitate speculators liquidity positions and led to instability:

Banks supply funds to brokers, brokers to customers and the collateral [which customers use to leverage stock transactions] goes back to the banks… Wall Street, in these matters, is like a lovely and accomplished woman who must wear black cotton stockings, heavy woollen underwear, and parade her knowledge as a cook because, unhappily, her supreme accomplishment is as a harlot. (1954 [2009: 47-8])

Reinhart & Rogoff has much to contribute with their book. A good read is tragically not one of them, and that may stop its transition from good research into great piece of work. What a shame.

Neuro-psycho-economist, but the mindset of a historian?

The new book of Paul Glimcher is out. Glimcher (based at NYU) is the promoter of neuroeconomics, a young field which studies the neural basis of decision-making.

There are few, if any, consensual historical narratives on neuroeconomics. Glimcher and co-authors wrote a short historical piece two years ago, but in my opinion it tried too hard to gather all possible antecedents (experimental eco, behavioral eco, signal theory, cognitive psycho, brain imaging, etc, etc) to give a comprehensive view.

And this is why I like Glimcher’s books. To convey an interest for neuroeconomics, he proceeds to re-read and interpret the long history of science in biology and medicine, pyschology and economics – if I remember well, his book of 2003 went back as far back as Gallienus, and evoked the writings of Pascal, Bernoulli, Laplace, …
Same deal for his new book: we are told the recent history of choice theory in neuroscience, psycho and eco. This exercise permits him to show that the separate disciplinary views on decision-making each suffer from espitemological deficiencies which could be remediated by making them dialoguing. And this is not a rapid rhetorical brush in the first chapters, before proceeding to “really interesting analytical stuff”. I mean, I am at page 188 and we just arrived in the late 1990s, when the first papers in the neuroscience of vision introduced economic variables in their experiments (uncertainty, intensity of reward).
Glimcher is trying hard to break the Chinese walls separating neuroscientists, psychologists and economists. The title he chose for the book suggests that he cares specially to reach economists – because they are the most insulated, I’d bet. But as an unwanted by-product, he makes neuroeconomics very interesting to historians of science too!