Economic Imperialism

The title of this post is not a rant against the Evil Economists of our time, but the title of a paper written by an economist at Stanford, Edward Lazear. Thanks to Ali Esbati of Klassekampen, who pointed me to it in today’s paper (Norwegian only):

An article on reassessing the field of economics

An article on reassessing the field of economics

Basically, Lazear’s article argues that economics as a social science has invaded the territory of almost all the other social sciences, and in his view conquered them successfully. This is A Good Thing, apparently, because economists are the only social scientists applying the True Tools of Science (AKA maths, physics and behavioral psychology) to the social world.

Armed with the triplet concepts of utility maximizing behavior, equilibrium and “a clearly defined” concept of efficiency, the economic mercenary has in turn laid waste to studies of demography, business, discrimination, family and gender, religion, education, human resource management, finance, accounting, strategy (game theory), organizations, law, politics, health, and linguistics (!), all by moving the analysis in these fields to “a deeper level”. Truly a huge feat!

Before I start ranting against this position, which I will, despite the first sentence of this post, it is worth noting one last point. The whole conclusion of this 50-page essay is that “Economics has been successful because, above all, economics is a science”. The paper stresses that, because of it’s affinity for natural science terms, economics is in some way far superior to all other ways of studying social phenomena.

Now for some points where I disagree with the author. To me, the main flaws of the idea put forward in this paper is that it tries to use “economics” as a catch-all phrase for ways of thinking that wouldn’t necessarily identify themselves as economics. While it’s clearly correct that rational choice-influenced thinking has been introduced to many social studies, this does not mean that they are a) necessarily “economic” or b) dominating.

To point A: some of the ideas Lazear calls economic are pure positivist ideals that have been around for a long time. Calling these ideas economic just because economists started using the same tools as the positivists amounts to retroactively changing history to fit into the tale of one field of study.

To point B: basically the same point, namely that the story of economics as a field is given too much weight. Economics is definitely a perspective in most fields, but in almost none of the fields mentioned above has it come to be the dominating modus operandi. Business, finance, accounting and organization theory might be dominated by rational choice, efficiency-oriented thinking, but those are also the fields most closely connected with economics. Saying that law is dominated by economic thinking is ignoring the very peculiar thinking and method that goes on within law, and the same goes for gender studies or education, or any of the other fields mentioned.

An essay like this is clearly an attempt to become a self-fulfilling prophecy: it is in itself an attempt at economic imperialism from a field that is not yet an empire in itself. One tactic is taking thoughts from other schools and magically turning them into economics, to give the impression that the field is much more forceful than it really is. Suddenly, many perspectives preceding economics is actually economics under a different name, before the ones developing these perspectives realized that they were actually doing economics.

One last point: this essay is all about micro-economics. My impression is that micro-economists prefer to pretend macro-economics (that is, aggregated economics) doesn’t exist. Maybe because macro-economics presupposes an actual society, with collective behavior?

Anyway, this article is telling in its sincerity, and a good example of the self-confidence of economists. Let’s see if things change with the times we are in now.

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