the weaknesses of analogical reasoning

This article, shared recently by Marginal Revolution, got Anti-Mankiw's blood boiling, for all the wrong reasons. The core issue was the defense of mainstream economics through the use of particular analogies that we believe are fundamentally flawed.

As we explain elsewhere, analogies are often a deceptive way of explaining the core analytical framework of a concept, because an analogy between A and B is only as good as the likeness between A and B. It seems better to start off by explaining the core logical framework from within the language of economics, instead of alluding to its likeness to other sciences. Unfortunately, that is not the approach taken in Mankiw's textbook -- as early as chapter 2 he analogizes the study of "economic science" to physics.

What are the specific offenses that the article makes?

1. Saying that economics is like other sciences, such as medicine. As the article states,

"Galbraith’s and Varoufakis’s worry [that economics has become too mathematical] has been around for 20 years, says Grossman at Princeton. “It comes and goes. It particularly comes when economic times are hard, when it appears that the old way has let us down.” Did the old way let us down? “No,” he answers, “which is very different from saying we know everything. … I don’t think medicine has let us down because there are diseases we don’t know how to cure.”"

Economics is not like medical science. In medicine, all hypotheses go through rigorous empirical testing before they can be accepted by the field, and even at that point, caution is exercised when it comes to making generalizations. Also, in medicine, we don't have to make assumptions about how cells or molecules behave, while with people, making such assumptions is not only very important, but subject to a much wider menu of possible interpretations, often with dramatically different, and political, implications.

2. The idea that there is a "free market" in economics departments, so that graduate students can pick the ones that seem to be offering the most realistic version of economic theory out there. As the article states,

"Harald Uhlig, chair of the economics department at the University of Chicago, another of the No. 1-rated economics graduate schools in the U.S., offers a kind of a model of his own. In an e-mail, he writes: “Above all, I do not believe in central planning. What is true in private markets is true in PhD education as well: It is good to see different places try different approaches, to let the PhD students decide where they want to be educated, and to let the marketplace for future scientists decide what works and what does not. I am sure that if the new PhD program in Athens is successful and produces the top young economics researchers of the next generation, many other PhD programs will take notice.”

Such a comment ignores the very real differences between top graduate programs and lower-ranked schools in terms of prestige -- something that often goes hand-in-hand with support for the status quo and getting top (influential) jobs, and refraining from any radical criticism of the current paradigm (which is what economics needs at this point).

The thing that concerns us most about these analogies is that, for the casual reader who doesn't know much about the field of economics, it is very easy to take these analogies for granted. Without any rigorous knowledge of the field, understanding is made easier by analogy.

But for those who have an advanced understanding of the field, the weakness of the analogical approach is clear. We are, indeed, actively promoting ignorance by taking such an approach, instead of being honest about our flaws and about the structure of graduate education.

we know what we're protesting

This Crimson article by Harvard undergraduates Rachel Sandalow-Ash and Gabriel H. Bayard from November 2011, addressing the fundamental issues underlying the Occupy Ec 10 movement, did not get nearly the amount of attention that it deserved. Published about a week after the walkout on Mankiw's class, very few sources on the walkout linked to it, instead choosing to focus on the open letter and Crimson editorial(s), which were good, but not very carefully articulated.

We think the exclusion of the Bayard-Sandalow-Ash piece is very unfortunate. The articles which Greg Mankiw chose to cite in this New York Times article "Know What You're Protesting" did not accurately portray the types of issues that most people who chose to walk out have with his course. It would have done more for discourse around the issue if Mankiw had actually spent time dealing with the substantive attacks, instead of largely arguing past the protesters.

For example, Mankiw chose to concentrate his Times article on the argument that economics is mostly a tool, not an ideology. In other words, Mankiw sees the standard introductory economics curriculum as introducing the student to a scientific framework in which students can approach any kind of problem related to public policy or current events. This is a very familiar argument to those of us who have taken an economics course or two -- the idea that we're equipping ourselves with tools to go out and change the world. Too bad those tools are stained with ideology. Let us explain

The issue which Sandalow-Ash and Bayard rightly point out is that the frameworks Mankiw presents are themselves value-laden and politically motivated. So while the efficiency-equity tradeoff seems to offer an analytical framework in which government intervention can be "objectively debated", underlying the framework is a market-centered approach that fails to point out how a more equal society, through promoting stability and long-run health, can help to promote efficiency. And though Mankiw goes to some length to present a consensus among mainstream economists about core issues such as the adverse effects of minimum wages and free trade in his book, both historical experience and a growing literature on these topics have already successfully taken on seemingly-unobjectionable tenets of neoclassical theory.

Overall, we strongly suggest you take a look at the piece by these two very intelligent and socially conscious Harvard students. This is where the Occupy movement's critique is truly located.

Mankiw on the Consensus View Within Economics

Mankiw often likes to tout the view that there is vast agreement in the economics profession over most of the major economic issues. In chapter 2 of his textbook, for example, he argues that while most economists differ on normative claims in economics (i.e., what ought to happen), there is widespread agreement about its positive claims (i.e., what actually happens). He often cites various polls of economists in support of his argument. His most recent cite is here.  Another one here. Another one here....  It's almost as if he's not only trying to convince the public that economists largely agree on everything; he's trying to convince himself.  

There are, however, a few problems with how his argument is made.  

1. It's easy, though misleading, to cite sentence-long themes framed in a specific way and obtain consensus - it's much harder to dig into the details and find the same level of agreement.   For example, the statement "If the federal budget is to be balanced, it should be done over the business cycle rather than yearly" might get 85% support among polled economists, but one wonders whether, if the question were asked "how" or via "what mechanism" etc., the agreement would be drastically reduced.  This piece by Arindrajit Dube leads us to reflect on the idea that if the survey questions were framed differently or according to greater detail, they might reflect a growing consensus within economics that minimum wages do not necessarily have a significantly negative impact on employment. Other examples abound.

2. It's easy to get consensus if you only ask people who agree with you. I'm not suggesting that no members of the AEA or other academic economists polled have any heterodox inclinations (for example John Kenneth Galbraith was actually president of the AEA in 1972), but when the vast majority of economics departments and its institutions are run by and for mainstream economics, and when heterodox economists are so marginalized from the profession that they may not even be a part of mainstream professional institutions, you are bound to get the mainstream response.   All you've really proven is that on some things there exists agreement among mainstream academic economists only.    Additionally, if you only ask American economists, the skew is even greater because the United States has some of the least academic support for heterodox thought.   A good example of this fact is the story of how a whole heterodox department is forced to close its doors. Expand this to business economists and financial economics experts who may not call themselves 'academic economists' but who, nevertheless, are prominently featured in policy circles and mainstream media outlets, and the skew could get even wider.

3. Perhaps the most important point is that agreement does not make you right. When groupthink is set as a priority above seeking the truth, that in and of itself suggests there is a fundamental problem within the economic profession. And that, at the end of the day, is the direction Mankiw would have mainstream economics continue to travel - a conglomeration of brainwashed groupthinkers who close their eyes to any alternative dialog that might challenge their worldview.