misc

My colleague Samuel Bowles used to say that there are two types of economist: the Priest and the Engineer. The Priests live in their own little world and spin theories without any reference to the facts. The Engineers live in the real world, collect data, analyze time series, make predictions, give policy advice, and generally ignore all but the most basic economic theory. Certainly, the Engineers never give a thought to what the Priests are doing (they're usually separating hyperplanes, playing with Fredholm operators, or lost in Banach space). Not surprisingly, the microeconomics textbook used in all the best graduate departments around the world has more than a thousand pages stocked with axioms and theorems, but there is not one economic fact in the whole book.

There is a reason that neoclassical theory has triumphed: it is the only promising approach to economics. Marxism, Keynesianism, Institutionalism, Syndicalism, Austrian economics, and the like developed strongly for a while and then foundered. They certainly do not present analytically interesting alternatives to neoclassical economics. My own view is that neoclassical economics has profound problems, but they can only be addressed from within, not by embracing some "heterodox" alternative........In fact, it is the only game in town, although it is a flawed game that deserves to be treated with continual hostility---but hostility from within, since there is no credible alterative. Let me be even more positive: I find contemporary economic theory extremely deep and challenging, and I believe it has some of the answers, and will aid in the development of other areas in which its answers are stupid and absurd.