Comment by cheald | Hacker News Reader

Comment by cheald | Hacker News Reader

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This theory would make a lot more sense if political tradewinds adhered a little more closely to economic consensus.

Economists broadly want to eliminate the mortgage interest deduction, corporate interest deductions, and reduce the corporate income tax, want employers to stop providing health insurance as an employment benefit (http://www.igmchicago.org/surveys/tax-reform, http://www.igmchicago.org/surveys/healthcare), and broadly disfavor rent control (http://www.igmchicago.org/surveys/rent-control). Yet before we go off accusing economists of being right-wing shills, they also broadly want carbon taxes over income taxes (http://www.igmchicago.org/surveys/carbon-taxes-ii) and favor open immigration policies (http://www.igmchicago.org/surveys/high-skilled-immigrants).

None of these are particularly politically-fashionable positions to take, with the possible exception of the CIT issue, which plays well with one half of the electorate and is broadly viewed as liquid evil by the other half.

Exactly. It's like how I keep seeing people accusing "economists" (usually as an undefined group) with being concerned with "justifying the status quo". This, despite most economists having frequent, major disagreements with common current policies in many areas. What it tells me is that they're probably not really looking at the field as a whole.

It's the trouble with people making equivalences between "a particular person calling themselves an economist" and "economics". There are hundreds of thousands of people with economics degrees, it is trivially easy to find one who says what you want to hear. But then, that economist's words are often taken to reflective of economics as an entire field of study - regardless of the reasoning behind it, or how many other economists actually agree. So most economists may have totally sensible reasons for supporting Policy A, but when one dissenting economist supports Policy Not-A, the "consensus view" gets ignored. I don't know why this is. Maybe because people feel competent to judge economic reasoning in a way that they don't with other fields (and which might lead them to seek more opinions.)

This is interesting if true, and a little strange.

As an example, I have a Computer Science degree, however I can't imagine anyone taking what I have to say about Computer Science to be reflective of the greater industry. I'm just a schmuck with a degree.

I think maybe it has to do with what people are asked about, and with the level of uncertainty. Most questions that people would ask of a CS degree holder are probably specific technical ones, with fairly well-defined answers. But with economics, everybody wants answers to the sweeping, big-picture questions that are very hard to answer definitively (people who say, "we just don't know the answer, and here's why" tend not to be terribly popular in the media.) People are also, I feel, not well-informed about the basics of economics, so that they can take a particular jargon-y or specific statement by an economist out of context and totally misinterpret it. (Imagine: "These data are organized in a tree." "Hah, computer scientists think my laptop is powered by tiny forests!" Yet this is what happens when economists talk about "value" or "cost", or things of that nature.)

Of course this phenomenon does happen in other fields too - think of how often there's an article where "science says x!", when in reality it's just one paper with a tentative conclusion. It just seems particularly common for people to misunderstand economics.

Economists are in favor of carbon taxes because the alternative is environmental regulation. They favor open immigration policies because it brings flexibility to the job market. Leading to less job security for low skill workers and more profits for multinational companies.

Economists are not intentionally supporting multinationals interests over people's interests. They do so as a side effect of their belief in the correctness and practical relevance of microeconomics and neo-classical theories. This behaviour is in turn encouraged and rewarded by multinationals and investment banks, leading dissenting voices to be marginalized. Of course there are notable exceptions, Stiglitz, Krugman, Rodrik, and a few others. But the general point is that if you want to get an economics PhD from a red brick university you will have to support this viewpoint.

What viewpoint? Getting a PhD is a matter of 1) passing technical qualifying exams and 2) producing research of a reasonable quality. Most of the time the research will be very narrow in focus with no broader policy implications. At no point is your adherence to some free market ideological viewpoint tested out.

You highlight Stiglitz and Krugman as exceptions - but the fact that they won Nobels for their academic work suggests that economic theory itself does not directly lead to policy recommendations.

> Economists are in favor of carbon taxes because the alternative is environmental regulation.

Regulation is inefficient, markets could be more efficient if they were markets with supply, demand and competition (which is clearly not the case in the emission markets at least not where I live)

> They favor open immigration policies because it brings flexibility to the job market. Leading to less job security for low skill workers and more profits for multinational companies.

This only happens if you start with an imbalanced market to begin with. If there is competition between the multinationals, then they are forced to decrease prices.

In other words, lower salaries result in lower prices which in turn benefit everybody, including and especially those low skilled workers that keep their job.

One way to make everybody richer is to decrease prices but this is basically overseen today and called the "deflation monster" even though it's a natural process due to tech advances.

> Economists are not intentionally supporting multinationals interests over people's interests. They do so as a side effect of their belief in the correctness and practical relevance of microeconomics and neo-classical theories.

Yes and these theories are IMO very misled and make no sense at all. Take even Krugman (the one I'm most familiar with) - he favors printing money to resolve an economic crisis caused by printing money. If that were the solution, we could all be rich by just printing our money and living happy ever after. See the problem?

Most economists today don't know what a market is and why it's superior, otherwise they wouldn't be in favor of a central bank. A Central bank basically practices price fixing for the market of money.

I would be very curious to know why this has happened to economists alone--out of all the liberal arts departments. Are sociologists, historians, and political scientists immune to these influences? Or have the multinationals just refrained from attempting to influence them? What explains the lack of "multinational capture" among non-economist academics?

One possibility, which I believe to be correct, is that what the parent wrote above isn't true. Economists study a field in which many people both have a strong bias, and a strong belief they know what they're talking about. Not many people vigorously disagree with historians cause not many people care that much about history. With economics, they do care.

Which means that when economists have theories that fly in the face of what people believe (like pretty much all of science), people get more annoyed.

Yeah, I probably wasn't obvious enough--my point was that if your hypothesis is "big companies capture academic fields," then you would not predict a world where economics, and only economics, is captured by "big multinationals." (And why "multinationals" instead of, say, the many large and powerful companies that benefit from tariffs and other protectionist policies?)

To me (like you), that suggests that GP is telling a just-so story about why we can ignore economists.

Well, the other liberal arts departments don't portend to not be liberal arts departments. Economics sells itself as rigorous and predictive. And "multinational capture" has occurred in myriad actual scientific fields, for similar reasons (using the prestige of rigorous, academic work to convince governments to do things).

There's also the matter of the "rational actor" theory of human behavior, the a priori assumption of classical economics. It describes a being which is basically non-existent among flesh and blood humans. But corporations can form themselves in the image of this mythical economically rational being. And so, if classical economics does objectively describes the world, corporations are the uber-mensches of such a world and poised to dominate it in perpetuity - a clear incentive to capture and control the field, lest dissident economists succeed in espousing a revision of their core assumptions.

The "rational actor" is just a model, only applicable to limited situations, and acknowledged to be so. It's a specifiable model against which to test hypothoses. This rather shopworn critique - "humans aren't like idealized rational actors!" - is based on the implication that classical-type economists think that the model is fully congruent with reality. They don't! And furthermore, they wouldn't agree that "corporations" (hey, why not unincorporated entities too?) can form themselves in this way. They recognize the limitations of information, incomplete knowledge of preferences, and limited foresight and prediction - and these apply no less to groups of people as they do to individuals. If you tried to suggest in a classical-school economics environment that corporations can actually, in real life, form themselves into idealized rational actors, you'd probably give them gut-busting laughing fits.

You are dismissing an entire field of study because of your own mistaken assumptions. This post is a good example of how it is much easier to accept a simple narrative - "Economics is entirely dependent on an absurd assumption!" - because it offers an illusion of understanding rather than engage with the messy reality.

Economics studies the production of wealth, which is more relevant to business? Also economics claim to have a strong predictive power? I don't know.

There are also interesting differences in how economists view themselves compared to other humanities, see this (biased) paper: Fourcade et al, the Superiority of Economists http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.29.1.89 Economics tend to be a more insular and hierarchical discipline, and views itself as non-normative.

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