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La Trobe cuts economics: a bad signal

July 11th, 2014

La Trobe University is in serious financial difficulty, which is not surprising given the pressures on universities, and particularly newer universities operating in a “competitive” market that is in fact rigged in favor of the traditional sandstones (like UQ, where I work). Also unsurprising, given past experience, is the decision to make sharp cuts in the economics program. Cutting out economics to focus on business degrees seems to be a routine response of second-tier institutions. But it seems to me to be shortsighted, even in marketing terms. The presence or absence of an economics program is one of the clearest signals of whether or not an institution aspires to be in the top rank.

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  1. Watkin Tench
    July 17th, 2014 at 16:59 | #1

    Faustusnotes provides us with more adolescent thought bubbles in support of his vacuous musings but notably fails to apologise to our esteemed host for his unnecessary insults.

    Economics is a social science and is almost universally considered thus. The market place is a social institution embedded in human culture and the only people apart from Faustusnotes who I’ve heard suggest otherwise are economically illiterate right wing trolls.

    Moving along, FN tells us with a withering sense of self-importance that a study that contained errors has been cited 889 times. Big deal. Happens in every discipline. Science is as prone to errors as any other human endeavour. What you dishonestly fail to tell us is that RR’s mistakes were picked up by other economists working in the mainstream. This disables your argument that economics is, in your words, “shambolic” and “propaganda for the rich” and less useful than “basket weaving”. Indeed, even if it did turn out to be the case that the economics profession incorrectly formed a consensus that very high levels of debt reduced long term growth, I’m not sure how this would necessarily advance the interests of the rich.

    Now to this:

    yet the discipline can’t agree on basic ideas about the foundations of modern financial and banking processes. When you cast this as impossible, you are setting an incredibly low bar for this discipline

    Since when has it been the job of science to become bogged down in the search for some consensus on basic foundations? Hell, biology has never even been able to agree on a universally workable definition of that foundational unit called “species”. Science has never been preoccupied with this and the idea that science should have such a reactionary and stultifyingly conformist culture is utterly frightening. One doesn’t have to be a student of Feyerbend to understand that science is, and must by its very nature, be decentralised, forward looking and anarchic. How could science have a paradigm shift, say from Newton’s constants to Einstein’s relativity if was as constipated and reactionary as Faustusnote’s neo-Stalinist adolescent fantasies.

  2. July 18th, 2014 at 10:13 | #2

    @Watkin Tench
    Fn may have used exaggeration and hyperbole in his arguments about economics, but that’s not a reason to make personally offensive remarks about him (pretty sure that’s right gender, after all the many and various discussions we’ve had!). It lowers the quality of debate.

    I think Fn has got a point in that the weakness of the theoretical foundations of economics does allow people to use it for ideological ends more than most other social sciences. The comparable ‘worse case’ would be psychology and epidemiology confusing cause and effect in the case of race/ethnicity and intelligence/health, but I think both disciplines have improved since those days. I think the reason for this maybe that economics does try too hard to be a “hard” science, and use maths – it doesn’t spend enough time clarifying basic concepts and theory before moving on to manipulating concepts mathematically.

    As I said to Ernestine, I’m a non-economist and I speak modestly enough I hope as such, but that’s my perception and I don’t think it has been fully addressed yet.

  3. July 18th, 2014 at 10:22 | #3

    Just for clarification – I think that was a bit too short hand – psychologists have in the past used statistical analysis purportedly to “prove” that black people were less intelligent than whites, and epidemiologists similarly purported to “prove” that black people were genetically weaker and less healthy than whites. The apparent relationship was actually a result of the poverty and hardship that black people suffered as a result of discrimination. However as I say those sort of mistakes are recognised in the disciplines now – there is general recognition that causation and logic (conceptual and theoretical thinking) are just as important as maths, and more “foundational”. I’m not sure that’s true of economics.

  4. sdfc
    July 18th, 2014 at 19:32 | #4

    Ernestine Gross :

    sdfc :How about economics departments offer units on how the monetary system actually works?That would be a step forward.

    In the 1970s at least one 1970s university did offer a unit you ask for (I know because I took it). At that time, it was much easier to offer a unit on how the monetary system “actually” works then what it would be now because at that time the institutional environment (pre the 1980s big bang deregulation) allowed a neat separation of the monetary system from finance, macroeconomics, various subject areas of microeconomics relevant for the internal operation of financial organisations.
    I’ve worked and studied at G8 and 1970s universities in Australia and I studied for some time at two EU universities. I fully concur with Prof Quiggin.

    Ernestine

    Unless things have changed since I did my degree undergrads are taught that the money supply is outside money, created by central banks. By far the major proportion of the money supply is inside money created by banks as a result of their lending decisions.

    Maybe you need to flesh that out your comment about Basel, you seem confused. Is that a comment on what constitutes money, M1, M2, M100?

  5. Watkin Tench
    July 19th, 2014 at 01:05 | #5

    Val, when an anonymous punter turns up on the blog of an internationally renowned economists and disses the whole field from a position of both ignorance and arrogance with some rabbit punches thrown in I’m not going to cut them any slack. There are no commonly agreed theoretical foundations to any social science nor should there be given the complex nature of the subject matter and the very limited research tools that are available. We can’t very well use “gold standard” scientific instruments like double blind experiments in macroeconomics, for instance.

    Your comments on the race/intelligence debate (which you mischaracterise and clearly do not follow) also inadvertently touch on why any talk of commonly agreed foundations is unfructuous; you’ve simply bought the left-liberal line that the debate is over when in fact it is very much alive. As Jim Flynn, a famous researcher on the left-liberal/environment side of the debate has argued, the left has largely decamped and quarantined the debate. This has been a tactical disaster, although thankfully moderate conservatives like Ron Unz have picked up the baton. But let’s respect our host and not derail this thread on a debate that is not at all suited to enlightened debate in blog comments.

  6. J-D
    July 19th, 2014 at 08:25 | #6

    @Watkin Tench

    Inability to conduct controlled laboratory-type experiments is not just a feature of much of social science but also of significant parts of natural science. You can’t construct a working model of a supernova or a tectonic fault in a laboratory, but this doesn’t invalidate astrophysics and seismology or downgrade them to ‘unscientific’.

  7. Julie Thomas
    July 19th, 2014 at 09:36 | #7

    Watkin Tench, I think that it is you who is mis-characterizing the fructuousness of the current commonly agreed foundations of the race/intelligence debate. The IQ debate is alive but not the race IQ debate. The IQ debate is alive because women are now understanding that the IQ construct is male-centric and is used to justify the hierarchical foundation of western conservatism.

    Back when you and the other whitefellas arrived here, you missed a lot of really important things about intelligence because you focused a ‘male gaze’ on the blackfellas. You profoundly mis-characterized the relationship between their culture and their intelligence and you profoundly ignored the role of the women in this relationship.

    And here you are in the Twentieth century again revealing the cultural blindness and arrogance that leads to such appallingly ignorant judgements.

    This is off topic but PQ is not an authoritarian and tolerates a lack of obedience in his commenters so I think that it would be okay and not derail the thread if you were to clarify some of the claims you have made about the fructuousness of the moderate conservative arguments.

    It seems to me that Bennelong must have been an amazing outlier if the average IQ as measured in the 1930’s is correct. Jensen quotes a figure of 60 in one of his papers that the HBD (that is Human BioDiversity) people still accept as valid data, AFAIK.

    One does not have to be very smart to see how problematic this so *not* scientific testing must have been, carried out back when everyone knew ‘they’ were stupid without any ‘testing’.

    But ……… Bennelong.

    This man, in a few months, learned to speak the English language and became sufficiently cognizant of the weird and irrational social rules of the Victorians to be able to participate in polite society?

    How do you explain that with their apparently superior intelligence the white men of the time did not learn to speak the primitive languages that, created by a people with an IQ of around 60, should have been so easy to learn for men of their calibre?

    I read your Ron Unz article. Ron says, “However, this strong relationship between wealth and nominal IQ seems to disappear when we examine East Asian populations.”

    But Ron does not mention the Korean workers in Japan and I have a reference that says “in Japan, Burakumin (a caste-like minority) and Koreans (an oppressed minority in Japan) have very low IQ scores and poor school performance relative to Japanese. The Burakumin have a 15 pt gap in IQ. However, it is said that when Burakumin immigrate to the US, in the second generation, the 15 pt difference evaporates and their children score even a bit higher than Japanese.”

    Do you think that maybe Ron – and you and your moderate conservatives, are just *not motivated* to look for anything more than facts that support your own judgements?

  8. July 19th, 2014 at 17:23 | #8

    Thanks Julie for engaging with WT (silent f?) on this issue. My interest in this discussion is about questioning the discipline of economics, and I’m a bit disappointed that this thread is falling down the page and will probably soon be non-active. Maybe our host might create other opportunities for such discussion again?

    I have for many years had serious doubts about economics and whether it is an intellectually honest discipline, though as I say I am trying to be respectful towards those who have spent many years studying it and know far more about it than I.

    I have been reflecting on this a bit, and I’ve realised that I’m maybe being unfair in that I’m comparing the complex understandings I gained through seven years studying history at tertiary level with the somewhat basic ideas I’ve got through general discussion of economics and some introductory reading at first year level. (I actually asked my supervisor – whose background is economic history- whether I should sit in on first year economics when I started my PhD, since economic inequality is a key issue in my thesis, and he didn’t think it necessary, but I have done some reading as discussed earlier). Anyway one can’t be a specialist in all disciplines, but we still have to evaluate and assess the worth of other disciplines at times, and I do have serious doubts about economics, which is why I would like some of the economists here to respond to my questions. I’m not sure what WT’s qualifications in economics are, but I’m not finding his (I presume) responses useful.

  9. Watkin Tench
    July 19th, 2014 at 18:36 | #9

    Val: “Thanks Julie for engaging with WT (silent f?) on this issue.”

    Obviously you’re not prepared to engag in a good faith discourse so this will be my last response to you. Your major contribution on this thread to date is to question whether economists use logic and understand causation while acknowledging that you know little about economics. If you want a better understanding of where economics is at, including the problems it faces in “knowing things”, Noah Smith’s blog is great starting point. Noah writes from a left of centre perspective and often has interesting discussions with left and right leaning economists.

    Cheerio.

  10. Watkin Tench
    July 19th, 2014 at 19:00 | #10

    JT,

    You incorrectly impute things to me based on your own set of stereotypes. I must say I do not share your fondness for stereotyping people.

    You refer to an IQ study on Burakumin immigrants referenced in Sternberg et al in the US that never actually happened, as even the more honest and diligent folk on the environment side of the debate will tell you. You follow this up by suggesting I’m not looking for evidence that refutes my prejudices. Pot, kettle?

    FTR, I think it is OK to argue that race is a biological reality but it is not OK to argue that the very slight differences that may exist between the races justify any form of discrimination. What I find repulsive is the dishonesty, anti-intellectualism and bullying that opinion leaders and gatekeepers on the left have employed in the name of combatting racism.

  11. Julie Thomas
    July 19th, 2014 at 19:37 | #11

    Thank you so much for setting me straight about the Burakumin immigrants. It is important to be accurate about these things and of course it is important for you to tell me how unfond of stereotyping you are. So kind of you. I will moderate my behaviour in future.

    And let me apologise for having the temerity to offer you free advice about how your mind might be working. I should have known you are the more appropriate one to be giving the advice and one who would neither a pot nor kettle be.

    Could you get over the irrational tendency you have to hyperbolise your emotional responses? For example, you say you find certain behaviour of the left “repulsive”? Surely not? This is quite an extreme emotion and would rule out any rationality, would it not?

    And then you could also try and use less hackneyed insults for ‘teh left’ and their (my? moi?) “repulsive… dishonesty… anti-intellectualism…bullying”? This sort of attitude is not conducive to a discussion in which people find some common ground on which to ‘combat racism’ which is what you say you want.

    It is good to know that although you believe there are racial differences between people, you don’t think people should discriminate on the basis of these differences. That is very rational of you I am sure. But you might notice that ordinary people are not rational and they think that if there are differences it must mean that some of us are ‘better’. But you don’t think that do you?

    And now I wish that I had stayed on topic because you are not at all interesting Watkins. Cheerio.

  12. Ikonoclast
    July 19th, 2014 at 20:36 | #12

    @Val

    Read Political Economy. (Bourgeois) Economics is what people develop they pretend that things like politics, power, race and class play no role in determining who gets what.

    The reading suggested to me was;

    Adam Smith – Wealth of Nations
    Karl Marx – Das Kapital (Vols 1 and 2 anyway)
    Thorstein Veblen – The Theory of the Leisure Class.
    J. M, Keynes – The General Theory of Employment, Interest and Money.

    I have got through the first two so far.

  13. Ernestine Gross
    July 20th, 2014 at 09:14 | #13

    @sdfc

    The notions of “inside money” and “outside money” belong to a model of ‘money’ which is a version of the money multiplier model. (Mo, M1, M3…) The Basel accords concern a time series of regulatory measures of the banking system (eg restrictions on the portfolio weights of bank asset risk classes) to which individual national juristications can agree or not. Such regulations recognise that the ‘lending decisions’ (ie the creation of inside money) involve more or less ‘risk’ (which cannot be adequately recorded in a balance sheet).

  14. Ikonoclast
    July 20th, 2014 at 10:43 | #14

    Further to my post above to Val.

    Those suggestions are for someone who does not intend to become an economist but just wants a general autodidact education on the general area of political economy and economics. Someone who wants to become a properly educated economist should IMO study those authors and a hell of a lot more in depth plus of course a lot of relevant models and maths. They should know all major economic systems extant or proposed, real and ideal, and all the major academic approaches whether they agree with them or not. They should also study plenty of history and not just economic history.

    Narrow economic specialists have their place in research but not, I suggest, in public policy development.

    All of this is just my lay opinion of course.

  15. July 20th, 2014 at 12:01 | #15

    @Watkin Tench
    Just in case you should ever “engag in a good faith discourse” with me in future, let’s have a ground rule: if you don’t try to patronise me, I won’t make fun of you. Ok?

  16. J-D
    July 20th, 2014 at 18:39 | #16

    @Ikonoclast

    Both Thorstein Veblen and John Maynard Keynes held appointments in university economics departments.

  17. Watkin Tench
    July 20th, 2014 at 19:13 | #17

    J-D,

    On your point above I guess what I am getting at is that ther different sciences are arranged along a continuum with respect to how they can employ scientific tools to “know things”.

    Social sciences like economics, political science and sociology plot out at the very difficult end whilst at least some branches of the hard sciences are at the easier end. I suspect many of the questions raised in economics will never be answered with any certainty because there will never be a tool robust enough to do so, at least not in any timeframe that is meaningful to us.

    The other confounding factor is of course the suitcase of values and beliefs that social scientists unavoidably bring to their work and which can never be completely disentangled from it.

    Or at least that is my armchair assessment of things :)

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