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​What makes economics economics?

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In Jonathan Stern's guest column, "The failure of the department of Economics, Stern broadly criticizes Duke Economics for failing to introduce to undergraduates “the history and philosophy of economics.” Frankly, I consider this approach—and any mandatory introduction to economic history and philosophy without formal training in theory and empirical techniques—a bad idea. Not only do I think that undergraduate economics education should not begin with so-called “Great Books," I think that they should not be a mandatory component of an undergraduate (or graduate, for that matter) education at all.

I must clarify what I mean when I object to this statement. I appreciate economic history and philosophy for what they are. I have a degree in philosophy and will enthusiastically agree that there are vast swaths of issues that don’t seem to receive sufficient attention from mainstream economics. I would agree that economic question are generally also ethical questions, and that the normative components are oft-overlooked because modern academics are not trained to think in terms of “right” and “wrong.” I think that inviting economists to talk to their counterparts in ethics theory over wine and cheese is a great idea. I personally enjoy reading the classics, and appreciate the beauty of sharing in the intellectual struggles of the sharpest minds of the era.

And yet I don’t think that introducing broad-stroke assessments of society from hundred-year-old texts is an optimal or efficient choice. Stern claims that the present state of the discipline should be interpreted through historical luminaries. This is, frankly, not true. Many—and I would dare say most—fields of modern economics did not even exist as of the 1950s. Branches such as urban, health, behavioral, computational economics were either nonexistent or in their infancy barely half a century ago. Very little of what Adam Smith or David Ricardo said has much bearing on these fields as they are today. It is absolutely possible, common even, for researchers to working on cutting-edge topics in these fields without ever reading the "Wealth of Nations."

I would argue that the tapestry of modern economics is so rich that no small subfield lacks good stories or interesting, intellectually stimulating debates. One could dive headfirst into real estate or generational transfer topics and receive just as engaging an academic discussion as if she or he were reading the best excerpts of Marshall or Friedman. Brilliant individuals constantly push on the boundaries of these subjects, and yet still mostly only manage small increments. To assume that certain topics are somehow inherently more prestigious or deserving than others because of historical significance or because the people who worked on them are famous to the public is simply intellectual laziness. I see little difference between making such assertions and claiming that an ancient artifact from the Mayans must necessarily have mythical healing powers. 

Herein lies the problem with this idealized version of economics education: it’s simply not what mainstream economics is as of the year 2016. There is a reason why Duke Physics doesn’t make its students read the "Principia," or why Duke Engineering doesn’t start from a historical perspective of engineering. The nebulous ideas of the earliest economists have been dissected, refined, rigorously formulated to almost infinitely fine points, and then connected and merged and dissected yet again to create economics as we know it today. Many of the assertions they have made have been tested repeatedly, with ever-more sophisticated methods and better data. And even if the connection is unbroken since the early days of economics, the most valiant attempt at constructing a meaningful thread from Adam Smith to anything in a recent issue of the AER is almost certainly impossible within the ten or so courses of a Duke undergraduate economics major.

To the contrary, I believe that what sets economics apart from other social sciences, and what gives us the kind of predictive power and policy impact that has transformed mankind for the better, is our focus on rigorous mathematical formulations, drawing inferences from data, and adherence to sets of limited, and yet enormously powerful assumptions. These assumptions allow us to condense seemingly complex social phenomena—between individuals, firms and countries—into simple, more or less falsifiable rules. There is certainly much to be gained from challenging them, but they exist because of superbly good reasons. One doesn’t go very far without at least obtaining the mathematics and statistics background to understand what these rules stand for.

That is why I am not troubled that undergraduates don’t know who John Keynes or Friedrich Hayek is. At least two generations of Chinese economists grew up not knowing who Hayek is, and as far as I’m concerned they have produced plenty of interesting and novel work. It is entirely possible to be creative, think critically and contribute to any number of fields within the discipline without ever engaging in economic history or economic philosophy, just as it is entirely possible to write about economic history and philosophy without ever knowing much about pure theory. The same cannot be said for a lack of technical training regarding a variety of topics.

To that end, my take is that the deficit in Duke’s undergraduate economics education is not of humanities but of technology and sciences. The undergraduate requirements are relatively math-light among departments of the same caliber, and I personally would like to see regression analysis be made part of the formal Bachelor of Sciences track. I would also argue that we should teach the first introductory micro course with computational models—letting students set up their own small CGE projects—and then move to mathematical formulations in the second and third courses (having given students some time to take linear algebra). Instead of two “Great Books” sequence courses, why not implore prospective economics majors to take introductory computer science and statistics courses and real analysis? Arguably, this would go further both in terms of encouraging rigorous, logical thinking and facilitating understanding of modern economics topics.

Finally, I’d like clarify again that Duke should absolutely still offer a rich variety of economic history and economic philosophy courses. To those who have chosen other disciplines as first and second majors, the PPE program is a wonderful foray into social sciences in general. But they should be offered on a voluntary basis identical to other Duke topic courses. Preferential treatment—especially making these the first courses of a Duke economics major—is not justifiable.

Victor Yifan Ye graduated from Duke in 2015 with a double major in Economics and Philosophy and a minor in Mathematics. He is a candidate in the M.S. Statistics and Economics (MSEM) Program.

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