Where I teach, a liberal arts university in the Catholic tradition, we have a pretty hard time convincing the bright and idealistic that they should study Economics. Many even doubt that economics has a place in a liberal arts university at all. After being exposed to Homer and Shakespeare, Plato and Aquinas, Cicero and Augustine; after seeing the grand sweep of history, the intellectual thrill of natural science, and the noble call of religion, they don’t seem to value the humdrum, prosaic, dirty world of inflation and unemployment, marginal costs and externalities. My students in Intermediate Macro are the career oriented. But they are also the masochistic, I have to say, because the class is very hard and it’s not obviously practical. What is the place, then, of Economics in a liberal-arts university?
“A university should teach universal knowledge,” says John Henry Newman in Discourse II of The Idea of a University. In context, Newman does not imply that anything that can be known ought to be taught in a university (the latest doings of the newest starlet? the number of blades of grass in a field?). He thought there is a definite ranking of what deserves to be known. What deserves to be known for its own sake—the liberal arts—has pride of place over the useful arts. Indeed, many take Newman to mean that professional preparation has no place in a true university. It is good to point out that Newman made space for professional education (there was a medical school in Newman’s university), although he was at pains to keep professionals at bay, ruled by the True, Good, and Beautiful (cf. Occasional Lecture X).
Where does this leave Economics? A look at the Oxford English Dictionary suggests that it is a practical discipline, to be practiced by householders and princes who want to be prosperous—a pretentious synonym for personal finance. Wikipedia’s description is unintelligible to the layman, but it does suggest a pretentious version of the Suze Orman show. Most non-economists expect professional economists to be able to forecast GDP and inflation at a moment’s notice, and to be sure guides for selecting a good mortgage. We learn to expect irritation when we answer, “well, on the one hand. . . .” Everyday Man is frustrated when economists (being scholars) are unwilling to say “I’m sure.” Everyday Man wants to slide his dollar in—and get a quick, unambiguous answer. But a scholar is not a vending machine.
Is Economics, then, like Medicine? Then it is not properly a liberal art, even if some individual parts of it may be very interesting per se: we study it (and we hold it in high regard) because it is useful. We expect tangible output and evidence of results. We do not study topics with no clear application. We hold in contempt the mental gymnastics of the learned journals, and we put away the history of thought.
I’m not so sure. As Alfred Marshall said, “Economics has as its purpose firstly to acquire knowledge for its own sake, and secondly to throw light on practical issues. But though we are bound, before entering on any study, to consider carefully what are its uses, we should not plan out our work with direct reference to them” (Principles of Economics, 1898).
Most economists study topics that are really, well, pretty darn useless, but so very interesting. So much in Economics is just fascinating, independent of use, and is studied for the sheer intellectual joy of producing beauty. Most of us just want to understand, to figure out how it works, to tease out an explanation or an abstract description.
True, nearly all knowledge is valuable for its own sake (and nearly all knowledge has practical implications). The distinction between Liberal and Useful, as Newman says in Discourse V, lies more in what we do with knowledge than in its own nature. So we might study Medicine because of the sheer pleasure of the thing, but most of us would study it because of its usefulness to ourselves and to others. Is economics like that? In a previous post I conceded that “the ordinary business of life” may be studied for practical reasons, but nonetheless it is most often studied for the sheer intellectual joy of producing beauty. I would argue, furthermore, that Economics, studied rightly, is particularly good at producing intellectual leaders who are eminently teachable and who have experienced the ascent of the soul that Gerson Moreno-Riano identified as characteristics of the educated person (see http://lehrman.isi.org/blog/post/view/id/26/). Often enough, economics produces techies, but we (economists) are not terribly satisfied with that kind of graduate.
If not quite like Medicine, then, perhaps Economics is more like Physics. Like physicists, economists yearn for elegant, simple descriptions of what we can observe, feel, and touch. Then we would expect from Economics precise and empirically verifiable explanations and predictions, we would hold that its findings are true in the very limited sphere of its competence, and we would ask from it a suitable humility in the face of the higher truths presented to us by other disciplines. But human action is much too varied to be this simple (as an example, consider the wide range of forecasts for GDP, inflation, and unemployment found in the minutes of a Federal Open Market Committee meeting).
Is Economics, then, more like History? Should we expect it to face a morass of facts and events and modestly, carefully, patiently, present to us a plausible explanation based on evidence—not perfect evidence—drawn from every relevant angle of the human experience, with the appropriate recognition of the limitations of its methodology? Yes, this rings true about Economics. But there’s also an undeniably practical side to the thing. As AC Pigou said in the Introduction to his Economics of Welfare,
I would add one word for any student beginning economic study who may be discouraged by the severity of the effort which the study, as he will find it exemplified here, seems to require of him. The complicated analyses which economists endeavour to carry through are not mere gymnastic. They are instruments for the bettering of human life. The misery and squalor that surround us, the injurious luxury of some wealthy families, the terrible uncertainty overshadowing many families of the poor—these are evils too plain to be ignored. By the knowledge that our science seeks it is possible that they may be restrained. Out of the darkness light! To search for it is the task, to find it perhaps the prize, which the “dismal science of Political Economy” offers to those who face its discipline.
An intriguing thought: is Economics like Theology? Without losing sight of the infinite distance between their subject matters, both disciplines study something that is very interesting in itself . . . and knowledge of which has immense implications for human welfare or happiness (of very different kinds, I hasten to add). If so, we would expect economics to be diligent and humble in applying its methods—even as it is aware of their utter inadequacy in the face of its subject matter. We would demand from it a special fidelity to the ideal of knowledge as its own goal, even at the risk of derision (“angels dancing on pins,” “two-handed economists”). And at the same time we would expect it to produce practical wisdom and useful insight for daily living.
Perhaps Economics is like all of these disciplines. As the well-known quote goes,
[T]he master-economist must possess a rare combination of gifts. He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician (Keynes on Marshall, Essays on Biography).
Keynes’ description has more than a few echoes of Newman’s understanding of the goal of liberal education—the cultivation of the “philosophical habit of mind,” the ability to put each discipline (and its contributions) in their proper place and relation to other disciplines. So a properly educated person knows how to value (and when to question) the conclusions of philosophy, politics, physics, etc.
How would a student go about determining the importance of a discipline, say, economics, in the circle of knowledge? We can infer from Newman that discipline A’s influence on discipline B depends on whether other A is to contribute to B because 1) the field of A overlaps with that of B; 2) the area of overlap is important for B; and 3) A is mature enough to have uncovered enough important truths about B’s field, from their point of view, which we would not have known from our own vantage point.
Conversely, if A is missing, B is likely to encroach on other A’s field, causing B to say silly things and fall into error. This temptation is larger the greater the importance of the field of the missing discipline, the wider its coverage (which increases the likelihood of overlap), and the more solid A’s hold on the truths of its discipline are (if A is not very mature, who’s to say B’s interloping will be in error more often than A’s?).
How do we judge the “importance of the field?” I suggest there are two ways to go about it. One is to look at the chain of being: God, Man, Nature. Thus a discipline that studies man in himself (say, psychology) and as he relates to other men (say, sociology) will be higher than a discipline that studies man in relation to nature (say, nutrition), but lower than a discipline that studies man in relation to God (say, ascetical theology). Another categorization is to consider how much the science studies permanent things (metaphysics) versus changeable things (physics), which correlates closely with how much it relies on deduction and reflection versus empirical observation.
The definition of economics is a matter of debate (see Backhouse and Medema, 2009, Journal of Economic Perspectives). Perhaps it is not too controversial to say that Economics focuses on human action in a particular sphere (largely, the effect of freedom of choice in the pursuit and disposition of material goods and services). Its relation to material objects is rather incidental, however—it is more about individual tastes and preferences, individual choices, and the interaction of the individual with his social environment. Economics uses “an idiosyncratic mixture of a priori theorizing and data-based empiricism, a commitment to apply the scientific method despite the inability to carry out replicable or even controlled experiments, a closeness to certain contentious political issues” (B. Friedman, Passion and Craft, p. 82).
In principle—and in the actual practice of economists—economics might cover any area of life where trade-offs exist, although the method is better suited to wealth-acquisition and -disposition, at the individual or aggregate level. Because it uses methods borrowed from the physical sciences to study changeable and contingent human behavior, economics has not, as Frank Hahn (Eminent Economists, p. 163) says, been able to get propositions to be generally accepted as verified or falsified by evidence. Vast and fundamental gaps exist in our understanding of theory and empirical knowledge; our assumptions are often of low descriptive merit and little predictive success. However, within bounds of modesty and professional humility (which sometimes we forget), economists are certainly able to explain a great part (yes, yes, not all) of its own field, better than any other discipline.
. . . . continued on Wednesday.
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