Mark Buchanan — Defending economists -- from themselves

I’ve often heard from economists that I (and other critics) just don’t understand the field we are attacking; that economics has gone way beyond theories based on rationality, greed and equilibrium; that we’re totally mistaken in our claims that economists too often act as knee-jerk defenders of free markets. This sounds very strange to us, not only because we’re generally criticizing recent papers published in top journals, but also because we frequently see well-known economists from respected institutions proclaiming just the ideas we criticize. For example, University of Chicago economist Steven Levitt recently made the argument that simply putting a price on healthcare treatments could greatly improve healthcare and reduce costs. He thinks it’s essentially obvious that this should work, because people “overconsume” anything they get for free.

Now, this looks to me (as well as to some others, including Noah Smith and Cameron Murray) like a complete mis-characterization of what economists really know about the way markets in things like medical services actually work. But I haven’t seen the economics profession come down on Levitt like a ton of bricks, attacking him for seriously misrepresenting economic science. He’s cheer-leading for free markets, and so that seems to be OK.

Economists — Your work is being mis-represented! Defend yourselves! If you wonder why people think lots of economics is a joke, well, look at economists such as Levitt who go on making these claims very prominently in public....

Conclusion: [based on studies in health care economics] what Levitt has proposed is totally bonkers and simply takes no note whatsoever of prevailing good work in economics on how such markets work....

This is why economists need to defend themselves — from themselves. Indeed, I think they may need to defend themselves even from their critics less than from those overzealous academics who give the profession a bad name. If you’re an economist and you’re sick of being criticized by people like me, or by heterodox economists of many stripes, you need to think a little more about why we make the criticisms we do.

Where the buck stops.

The Physics of Finance
Defending economists -- from themselves
Mark Buchanan