25 January 2012

economic debates

I don't really know why I'm starting here, but...

I read Paul Krugman in the NYT.  A lot.  Everything, even the stuff I don't understand, because in part the idea is to understand more.

And I basically agree with him, both about his economic views and, I think, more philosophically about the role and nature of government.  "I think," because I don't really know what he thinks about that, I'm just intuiting it. 

This week, it seems, there's an argument in full force between himself and an economist at Chicago called John Cochrane.  Krugman doesn't think much of Cochrane's ideas, or those of the U of C economics department generally; aside from their right-winginess, he thinks they're wrong.  I tend to agree with him on that, too.

You can check out the debate, if you're so inclined, although it probably helps to have been reading Krugman for a while to get the sense of at least his side of it, as well as of his irascibility.  (This became apparent during the 2000 Bush II election run-up, when Bush kept saying he was somehow going to create private social security accounts and keep funding social security and not raise taxes, a sort of 1+1=3 argument.  Krugman was plainly driven round the bend not so much by Bush's promises, but by the way they were taken seriously by the news reporters covering the election.)

But anyway, my point is not the merits of the economic debate in question, so much as something that struck me about the U of C and its economics department.  When I was a student at the U of C, I formulated a theory about it, that went something like this: it was (is, perhaps) a place where they took the most brilliant people they could find, gave them all the resources they needed to do their work, and left them alone; and the brilliant people have an ethos of pursuing knowledge - something like truth - in total disregard of its implications for the world outside the U's walls.  It's almost the definition of an ivory tower, I suppose.  And it's exactly the place you would go if you wanted to invent an atomic bomb.

Something about the Krugman-Cochrane debate reminded me of that.  Part of it was this:  Krugman once wrote of his irascibility, "This is not a game, and it is also not a dinner party; you have to be clear and forceful to get heard at all." Cochrane responds to it, in his current post, "Life is a dinner party -- at least if your goal is the truth ...."

I think this is where the U of C econ department went off the rails.  They forget there's a world out there, a messy world where people live and work, and sometimes don't work, and sometimes starve to death or fail to get needed medical care.  You'd think they would remember this, being on the south side of Chicago, but I'd presume most of them travel to and from the bubble within a bubble that is the U of C campus in Hyde Park without getting out of their cars much.  (It was a sociology student who provided most of the data that made the most interesting part of Freakonomics worthwhile.)

(Life is a dinner party?  I thought it was nasty, brutish and short.)

Part of what made me think of that was also a comment about "swimulus" on Cochrane's page that brilliantly describes the difference between economics in the abstract and economics in the real world.

This isn't perfectlythought out, so maybe I'll come back to it.  Anyway, these are notes for nobody but myself.

Good to be writing again.