In the last several weeks, a debate has been going on among economics bloggers about the state of macroeconomics today.* The discussion seems to have been kicked off by a December 17 post by Paul Krugman, “Something (Everything) Rotten in the State of Macro,” to which Stephen Williamson responded with severe skepticism (“This Paul Krugman post struck me as perhaps more deranged than usual on the topic of macroeconomists…”).
The underlying issues of the disagreement between those who think macro is in good shape and those who think it is in bad shape are interesting and important. But I have little to add to the economists’ discussions of them (largely because IANAE).**
But one thing struck me as very interesting about this discussion: the attitude of the participants toward agreement within macroeconomics. In short, both those, like Williamson, who think things are fine in macro, and those like Krugman, who think that they aren’t, seem to agree that it would be good if there were broad agreement among macroeconomists and that sharp disagreements within the field indicate trouble.
This is actually a relatively tranquil time in the field of macroeconomics. Most of us now speak the same language, and communication is good. I don’t see the kind of animosity in the profession that existed, for example, between James Tobin and Milton Friedman in the 1960s, or between the Minnesota school and everyone else in the 1970s and early 1980s. People disagree about issues and science, of course, and they spend their time in seminar rooms and at conferences getting pretty heated about economics. But I think the level of mutual respect is actually relatively high. There seem to be more serious disputes, for example, between structural and astructural labor economists than among macroeconomists.
Krugman, on the other hand, thinks that there is a sharp ideological divide between the (broadly correct) “saltwater” (or New Keynesian) economists and the (broadly incorrect) “freshwater” economists… and that the very existence of this divide is a problem. Indeed, over the weekend, he argued against a recent study suggesting that there’s broad agreement among economists working today.
Why would the very existence of sharp disagreement within the field of macroeconomics constitute a problem? The answer seems to be related to economics’ self-understanding as a science. Such sharp disagreements appear to call into question the scientific nature of economic knowledge. For his part, Krugman seems to think that only his “freshwater” opponents are guided by ideology. In a perfect world, economists would all gather around an objective, unideological scientific consensus.
Two things strike me as interesting about this self-understanding (which, again, seems to be shared by those on both sides of this controversy). First, the primary measure of economics’ scientific claims appears to be agreement within the economics profession, rather than the ability of that profession to accurately predict economic events or correctly guide economic policy. About the relationship of economic science to the real world there seems to be some disagreement. Williamson on other occasions has seemed to deny that important aspects of macro theory have any real-world implications at all. Krugman, on the other hand, thinks that those economists not addled by ideology or seduced by politics have, more or less, gotten things right, even in the Great Recession.
Secondly, deep disagreement, especially ideologically motivated disagreement, within the economics profession is seen as potentially threatening to economics as a discipline. Here’s Krugman from this weekend:
while the vast majority of economists may work on issues far removed from the question of what to do in a depression, an important part of our field’s prestige and the support it receives comes from the perception that economists do indeed have useful advice to offer in times of depression, and may come up with more useful advice in the future.
And if the perception spreads, instead, that business-cycle macro is just ideological posturing, that influential economists choose their doctrines to suit their political prejudices, and that the field not only fails to progress but sometimes actually retrogresses, this will be bad for the profession as well as the world.
In this passage, Krugman is certainly concerned about real-world failure, but ideology and politics are contrasted with a presumably objective economics that, like any proper science, knows only progress.
All of this is interesting to me because, in our field, agreement among historians is not usually taken to be such an unalloyed good. Indeed, it is often seen as a sign that alternative perspectives are being shut out. On occasion, some historians even value work that wears its ideology openly, largely because they suspect work that doesn’t do so is merely disguising its ideology, rather than transcending it.*** But even those historians most vocally opposed to openly ideological work have expressed an interest in variety and disagreement among historians. Thus, when the Historical Society was created in 1998 by a group of largely conservative historians objecting to what they saw as bad, ideological work in the profession, its founders were at pains to indicate that they were in favor of diversity in historical practice, and that it was their opponents who had created a “crust of dull conformity.” The statement of principles that the Historical Society issued at its founding declared that it would be “a place in which significant historical subjects are discussed and debated sharply and frankly in an atmosphere of civility, mutual respect and common courtesy.” In short, virtually no historians, left or right, tend to believe that, in a healthy historical profession, we all ought to agree about important matters.
Of course this very different attitude toward intradisciplinary disagreement is connected to the near total absence of scientism in today’s historical profession. Very, very few of us would claim that history is, should be, or even could be, a science. Thus our measures of disciplinary health are very different from those of fields like economics that maintain scientific aspirations.
* For those not already playing along at home, a good starting point (though one actually in mid-debate) is a post by John Quiggin of Crooked Timber entitled “The (failed) state of macroeconomics.” It’s the first in an interesting series of posts in which Quiggin surveys the big issues in the field, and it also contains links to some of the highlights of the ongoing debate about the state of the discipline that preceded it.
** Those interested might, again, start off with the Quiggin on unemployment, the fiscal multiplier, and the history of things going wrong in macro (he believes that it started going bad with the discovery of the Phillips curve in 1958).
*** Guest blogger William Hogeland does this a bit in his post from earlier today, seeming to prefer Forrest McDonald’s frankly ideological objections to Charles Beard’s view of the Founding to Douglass Adair’s less openly ideological critique of Beard. Though Hogeland has no truck with McDonald’s politics, he suggests that at least McDonald was open about where he stood.