Politics, Science

Syll, Krugman, and Models in the Social Sciences

Free Photo: The Parthenon

The heterodox Swedish economist and gadfly Lars Syll had a blog exchange with Paul Krugman recently that reminded me of some thoughts I’ve been meaning to post about modeling in the social sciences. First, Syll accused Krugman of not being a “real” Keynesian, because Krugman subscribes to the model-driven, orthodox-economics “John Hicks IS-LM interpretation of Keynes,” not to the true Keynesianism that passed down through Syll’s heterodox mentor Hyman Minsky.

Krugman offered his usual responses, noting that “Keynes said a lot of things, not all consistent with each other,” and that in any case, the important thing in economics — as in any field hoping to be a science — is predictive power, not faithfulness to some oracular founder.  Then Krugman offered a remarkably direct challenge:

And as I have often argued, these past 6 or 7 years have in fact been a triumph for IS-LM. Those of us using IS-LM made predictions about the quiescence of interest rates and inflation that were ridiculed by many on the right, but have been completely borne out in practice. We also predicted much bigger adverse effects from austerity than usual because of the zero lower bound, and that has also come true.

Now, what have those who declare themselves the true Keynesians had to offer? Has insisting that expectations are volatile and unpredictable been helpful in this context? Actually, if anything it lends support to believers in the confidence fairy. After all, if it’s all animal spirits, who are we to say they’re wrong?

Has declaring uncertainty to be unquantifiable, and mathematical modeling in any form foolish, been productive? Remember, that’s what the Austrians say too.

If you can show me any useful advice given by those sniping at me and other for our failure to be proper Keynesians, I’ll be happy to take it under consideration. If you can’t, then we’re just doing literary criticism here, and I’m not interested.

What surprised me — and I have to admit, disappointed me — was Syll’s response. He failed to offer any example of “useful advice” (good predictions) made by heterodox economists like Syll but overlooked by gadget-driven, orthodox “Keynesian” (i.e., not dogmatic right-wing neoclassical) economists like Krugman.

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Literature, Politics

STEM education, imagination, and political failures

One reader responds to my recent attempts to defend the humanities in terms that those with power over universities might find persuasive:

One thing that strikes me [about arguments to promote STEM education] is that we’ve fallen into the trap of promoting one story so hard that we’ve become blind to its limitations.  What do I mean?  STEM education is valuable to our economy–it promises to develop the technical skill that our workers need to be competitive when unskilled labor is increasingly automated.  But everyone got so caught up in promoting that story that we lost sight of its limits–that the greatest problems facing us today are not engineering problems.

Yes, it’s true that breakthroughs in science and engineering will be required if we’re going to mitigate (forget stopping) the effects of global climate change.  But we wouldn’t need those breakthroughs (at least, not as much as we do now) if we’d been able to reach the political agreement that would have been required to implement a policy solution years ago. I hate to repeat a cliche, but the problems of the last thirty years have been failures of the imagination, rather than failures of engineering and implementation–e.g., the slow reaction to the HIV outbreak in the gay community, the consequences of deregulation, the reaction to 9/11, the challenges of creating a social safety net in an increasingly tribal society…

So if the humanities require a defense, part of that defense is certainly that a democracy is not sustained on STEM alone–that a competitive economy on a warming planet makes us nothing more than the tribe that’s putting up the most moai on Easter Island.  … [T]he very imagination that a democracy needs to survive is what a liberal education–a critical component of which is the humanities–is supposed to foster.