The Economics Profession Is Trapped In A Cul De Sac Of Fake Science

And the science of psychology is helping us understand how and why this has happened:

“Academics, like teenagers, sometimes don’t have any sense regarding the degree to which they are conformists.”

So says Thomas Bouchard, the Minnesota psychologist known for his study of twins raised apart, in a retirement interview with Constance Holden in the journal Science.

Journalists, of course, are conformists too. So are most other professions. There’s a powerful human urge to belong inside the group, to think like the majority, to lick the boss’s shoes, and to win the group’s approval by trashing dissenters.

The strength of this urge to conform can silence even those who have good reason to think the majority is wrong. You’re an expert because all your peers recognize you as such. But if you start to get too far out of line with what your peers believe, they will look at you askance and start to withdraw the informal title of “expert” they have implicitly bestowed on you. Then you’ll bear the less comfortable label of “maverick,” which is only a few stops short of “scapegoat” or “pariah.”

A remarkable first-hand description of this phenomenon was provided a few months ago by the economist Robert Shiller, co-inventor of the Case-Shiller house price index. Dr. Shiller was concerned about what he saw as an impending house price bubble when he served as an adviser to the Federal Reserve Bank of New York up until 2004.

So why didn’t he burst his lungs warning about the impending collapse of the housing market? “In my position on the panel, I felt the need to use restraint,” he relates. “While I warned about the bubbles I believed were developing in the stock and housing markets, I did so very gently, and felt vulnerable expressing such quirky views. Deviating too far from consensus leaves one feeling potentially ostracized from the group, with the risk that one may be terminated.”

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2 Responses to The Economics Profession Is Trapped In A Cul De Sac Of Fake Science

  1. Roger McKinney says:

    The simple answer is prejudice. We all have to fight prejudice. Hazlitt’s “Thinking as Science” is excellent on the subject.

  2. Chris Braun says:

    Nice post.

    But I think the problem with economics goes deeper than psychology. That would suggest a conformity of opinions within an unproblematical framework. But the problem with economics seems to be the framework itself, one that renders even “correct” opinions potentially superficial, since the problem is at the level of concepts, not of opinions. Described using another metaphor, it appears to have unsound foundations.

    There’s a great J.J. Gibson quote that I found just the other day on Wikipedia. I think it fits, as Gibson definitely operated within a very different framework from that of his peers, one that is now becoming quite fashionable again:

    “I seem to be, to my surprise, a member of a large profession. There are some 20,000 psychologists in this country alone, nearly all of whom have become so in my adult lifetime. They are all prosperous. Most of them seem to be busily applying psychology to problems of life and personality. They seem to feel, many of them, that all we need to do is to consolidate our scientific gains. Their self-confidence astonishes me. For these gains seem to me puny, and scientific psychology seems to me ill-founded. At any time the whole psychological applecart might be upset. Let them beware!”

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