Territorial pissings, yes please

I’m not sure about the need for mathematical modelling in sociology (although I am intrigued), but this is spot on:

2. Are you saying we saying we should become like economists? Dear Lord, no. As a group, economists have committed the scientific method fallacy. They assume that one really good tool for science accounts for all of science. They have essentially abolished field studies, history, ethnography, and other important tools. Sociology should not engage in petty debates that end up dumping our best work. Instead, we should create a social science that strives to combine important different types of research.

From OrgTheory.



According to this article in the New York Times, an insurance company has started offering insurance on the chance that your other insurance policy might fail.

As you may or may not know, the US health system is heavily based on insuring against health problems, as opposed to the comprehensive model chosen by most other Western countries, but a lot of the insurance policies people have are financed as part of their employment deal. This means that if you lose your job or have to change to one that doesn’t cover health insurance, you either lose insurance or have to pay for it yourself. Don’t have one? No treatment. So here is a new policy, designed to insure you from sudden loss of insurance. Two points:

1. I smell a recursion here. There is never enough insurance, so why not get insurance against this insurance too? This strengthens the claim that a pure contractual society is not possible. In the end, there must be some trust in order for society to function

2. How can anyone still claim that this is overall cheaper than having a comprehensive system? Looks to me like the only ones benefitting from this arrangement is the insurance sector.

On an entirely different note, and much closer to my field of research, there is a new report* out on the effects of New Public Management policies in the public sector. In summary, the system works as following: in order to ensure maximum efficiency in all public service, every operation by a public entity must be submitted to cost control and constant revision. This ensures fair competition, accountability and the right allocation of resources.

Unfortunately, there are two large (and other lesser) problems with this model. Firstly, constantly changing suppliers of public services undermines the accumulation of expertise and knowledge in the supply institutions, which is clearly not efficient. Secondly, and more seriously, the accountability measures are themselves expensive. Often, the tiny expense saved by constantly focusing on cost containment is more than offset by the increased expense of constantly checking whether people are doing as they are required. Not to mention the negative effects on morale of institutionalised distrust.

Enough politics. Here is a video on how to build an igloo.

* Full disclosure: The report is released by a political party, SV, where I happen to be a member. Anything in the report must be taken to be coloured by their views. Why link to it? First, one of the authors, Bent Sofus Tranøy is a researcher in welfare state politics in Oslo, and not a member of the party to my knowledge. Second, it does seem to be seriously referenced.

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.