The Economist doesn't like the opinions of Peter Coy in Business Week:
As I've pointed out before, economists are, in private, pretty realistic about the limitations of their profession. They understand that predictions exist within a probability space, and they offer their idea of the most likely outcome. But, publicly, that's not where the money is - the light of the cameras or the lure of the lucrative lecture creates a sense of certainty where none can exist. The world beats a path to the doorstep of the eminent, asks what will happen; can we really blame a human being for succumbing to the desire of all for definitude?
The worst sin is that The Economist didn't actually read all of Coy's piece, which goes on to contend that economists are necessary, but that they need to combat their own "hubris." This is pretty good advice for any "expert."
Obviously, the best thing would be for all of us to recognize that economists are not much better or worse than the sportswriters who predict the outcome of the Big Game. Of course, we want to believe that someone, somewhere, "gets" what's going on, because we sure don't. But economics isn't there yet, and The Economist doesn't provide us any reason to hope that it will get there soon. (Their "defence" comes down to, economists all disagree, so how can they be criticized for not knowing what's going to happen? What?)
By the way, I'm not completely defending Coy's piece. At the end, he anoints Nassim "The Black Swan" Taleb as "the scholar of unpredictability," and cites one of his weakest arguments: "that nature achieves robustness through a redundancy that economists would consider wasteful: two hands, two eyes, etc." Any economist who sees two eyes as redundant needs to take a basic course in biology. Coy may want to be wary of the expertise of his experts.
PETER COY'S rant against the entire economics profession sounds a mite bitter.This touches on one of my "favorite" points, that "bitter" is, like comparison of anything to Hitler and the Nazis, is supposed to end the conversation:
The word "bitterness" is rapidly becoming the end of all arguments. We're asked to believe, not just here but on my blog and many other places throughout BlogWorld, that an assignment of bitterness is the ultimate in argumentation. McIntyre is "bitter" about something, and should no longer offer his reasons on the topic. I'm "bitter" about something, as a (former?) commenter expressed, and so my judgment on, say, economics or politics is immediately suspect.Let's move on, and see what The Economist doesn't like in Coy's piece:
Anyone who's taken Intro to Logic recognizes this for the ad hominem argument it is, but the people who use it seem to find it a devastating critique. It isn't, of course, it's just a way for a weak arguer to claim, "I win. My comments come out of passion and logic, yours merely from bitterness."
The rap on economists, only somewhat exaggerated, is that they are overconfident, unrealistic, and political. They claim a precision that neither their raw material nor their skill warrants. Too many assume that people behave like the mythical homo economicus, who is hyperrational and omniscient. And they take sides in quarrels that freeze the progress of research. Those few who defy the conventional wisdom are ignored.I expect a devastating rebuttal, but I don't get it:
That's a rather sweeping conclusion of a profession that includes more than 20,000 people in a wide variety of applications. Besides, which economist ever claimed his model predicts the future precisely? When I learned economic modelling I was told it acts as a guide, sort of like a road map. If you allow for every detail, the map is intractable, so you must make some simplifying assumptions. Those assumptions introduce weaknesses into the model; it's the trade-off of tractability for usability. Well-trained economists are mindful of this and understand that an economic model simply gives you some sense of where you are going.True as this may be, it's certainly not the impression that economists give when they appear on news shows or in front of Congress. When an economist is interviewed, does he or she answer "I don't know" to every question?
As I've pointed out before, economists are, in private, pretty realistic about the limitations of their profession. They understand that predictions exist within a probability space, and they offer their idea of the most likely outcome. But, publicly, that's not where the money is - the light of the cameras or the lure of the lucrative lecture creates a sense of certainty where none can exist. The world beats a path to the doorstep of the eminent, asks what will happen; can we really blame a human being for succumbing to the desire of all for definitude?
The worst sin is that The Economist didn't actually read all of Coy's piece, which goes on to contend that economists are necessary, but that they need to combat their own "hubris." This is pretty good advice for any "expert."
Obviously, the best thing would be for all of us to recognize that economists are not much better or worse than the sportswriters who predict the outcome of the Big Game. Of course, we want to believe that someone, somewhere, "gets" what's going on, because we sure don't. But economics isn't there yet, and The Economist doesn't provide us any reason to hope that it will get there soon. (Their "defence" comes down to, economists all disagree, so how can they be criticized for not knowing what's going to happen? What?)
By the way, I'm not completely defending Coy's piece. At the end, he anoints Nassim "The Black Swan" Taleb as "the scholar of unpredictability," and cites one of his weakest arguments: "that nature achieves robustness through a redundancy that economists would consider wasteful: two hands, two eyes, etc." Any economist who sees two eyes as redundant needs to take a basic course in biology. Coy may want to be wary of the expertise of his experts.
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