economic imperialism: why did it fail?

When I was a wee academic, people were scared of ECONOMIC IMPERIALISM. The idea was this: economic analysis was being applied to everything and it was going to displace nearly all other approaches to social behavior. But that didn’t happen. Here’s my scorecard:

  • There is internal colonialism in economics. Economists are now doing work on all kinds of issues.
  • Partial conquest of political science/public policy. I think they’ve got an East/West Germany thing happening. They even had a perestroika movement.
  • Economists conquered a small, but important, island in the legal academy. See Posner & co. But law & econ isn’t even close to being the modal form of legal analysis.
  • In sociology, they won some ground, but now RCT is almost extinct, in the sense that there are no new people being trained in it. Not even at Chicago!
  • History is completely unaffected.
  • Psychology is unaffected and they even think the neo-classical choice model is bizarre and primitive.*
  • Anthropologists never got the message.
  • In the professional fields (education, health, business), economists have their own fiefdom but haven’t won converts.

So the way I see it, economic imperialism was mainly an internal discussion among economists about the meaning of their field. The new definition of economics was adopted by a notable faction of people in politics/policy/law that needed the aura of scientific rigor. The rest of the social sciences are happy to have “the economics of …” be a specialty in their field. But most of the people in that specialty are trained in econ programs. “Native” scholars in professional schools usually don’t rush into RCT models of their topics.

I have two hypotheses. First, there is math. Basically, you lose about half the audience whenever you use math. Some people are just allergic to math. But that doesn’t explain all of it. People are willing to learn statistics and some types of models have, periodically, gained prominence. My second hypothesis is that you lose people when you engage in formalization for formalization’s sake. In other word, if you tell social scientists that a simple model X captures an important social process, I think you will win followers. You lose people when academic research becomes an exercise in proving model X in the most general case, or in pursuing refinements. Finally, as was noted in our discussion of b-schools and economics, human behavior is about more than just decisions and social science can’t be reduced to cost-benefit trade-offs, even though it is extremely important.

50+ chapters of grad skool advice goodness: From Black Power/Grad Skool Rulz

* Sorry, behavioral is a very limited incorporation of psychology into econ.

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Written by fabiorojas

June 2, 2014 at 12:01 am

Posted in economics, fabio

10 Responses

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  1. Economists are committed to a model of human motivation that exclusively prioritises the maximisation of each individual’s utility, conceived essentially in hedonistic terms. They are terrified of any contamination of this model from other social sciences. For instance the motivations relating to social affiliation and identity are anathema to them. They just do not want to know about anything that cannot be computed as a utility function. That is their tragedy.

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    June 2, 2014 at 1:00 am

  2. I largely agree with your scorecard, Fabio. But there’s also the status issue — economists may not dominate law or policy schools in terms of numbers, but they are high on the status heap, which means a disproportionate influence on those fields, even though economists make up a minority of faculty. And this is just details, but I’d distinguish more between the paths of public policy and political science — public policy was born out of an economic cost-benefit framework (systems analysis), while economics had to enter political science via public choice etc.

    I’m making this up off the top of my head, but I wonder if some of the reason econ didn’t make more progress in soc is the undergrad base. Soc undergrads are particularly math averse. So if you’ve got a lot of sociology faculty who are interested in problems that don’t fit well within an economic framework anyway (e.g. power, culture), a large and popular undergraduate major can serve as a resource in self-reproduction. Of course, that only makes sense if you assume either that soc undergrads dislike math more than poli sci undergrads (possible), or that an economic framework is less productive in sociology than poli sci (not completely obvious).

    Also, I’d like to think that as economic imperialism has ebbed, sociologists have taken a less knee-jerk anti-economics position. I mean, if you see someone’s goal as to essentially wipe out your own form of knowledge production it’s hard not to feel a bit defensive. But if that’s no longer the case, it’s easier to either engage with the bits that are useful to you or to simply disengage with economics as not relevant to the set of questions you’re interested in. Or, like MacKenzie et al., to look at how economics gets used without starting from a normative position. Even econ soc has realized that just yelling “embeddedness!” doesn’t get you very far.

    Or maybe that’s just wishful thinking.



    June 2, 2014 at 1:26 am

  3., check out “Identity Economics” by Akerlof & Kranton. I can email you a pdf if you want.



    June 2, 2014 at 2:11 am

  4. RCT is alive and well in fact. Economic history was taken over by economists decades ago. Psychologists/neuroscientists and economists are working together like never before. Likewise there is a lot of interaction between health professionals and economists. Some areas of pol Sci have seen quite a bit of work by economists, like voting, sometimes in collaboration with Pol Sci folks. No biggie.
    Looking for imperialism is looking in the wrong place.


    kevin denny

    June 2, 2014 at 7:46 am

  5. I agree with Beth’s take on this. Another piece of evidence in favor of economic’s success as a paradigm: the ratio of economics undergraduate degrees to sociology undergraduate degrees has increased considerably in the last decade.


    brayden king

    June 2, 2014 at 3:09 pm

  6. the sociology undergraduate degree has a lemons problem (cf. akerlof) – since it became one of the favored majors of student-athletes. Its no surprise that a sociology undergrad degree would be undervalued as a credential.



    June 3, 2014 at 6:59 am

  7. I agree with you on the academic side, Fabio, but it’s arguable that economists displaced other social scientists in popular discussions of academic topics, e.g. Levitt’s rise to fame.



    June 3, 2014 at 2:36 pm

  8. I am an economist, albeit perhaps not a very good one. But honestly if one wanted to read something informative (as opposed to intellectually provocative, which is a good thing too) about income/wealth inequality, one would be well advised to read Lane Kenworthy, a sociologist, rather than Thomas Piketty, an economist. Yet Piketty’s book, Capital in the 21st Century, is a huge best seller. Kenworthy’s most recent book is languishing around 10K on the Amazon league table. Our popular cachet is a mystery, but as ZC observes, manifest.



    June 4, 2014 at 6:46 am

  9. The only real impact law and economics had outside of academia is anti-trust law (and securities to a lesser extent). This is most likely a function of ideological bent of the judges of the federal DC circuit court of appeals, which hears most of the relevant cases due to jurisdictional requirements than other circuits, rather than the merits of the theory, IMHO.



    June 6, 2014 at 5:32 pm

  10. Although it may be too early to measure, I wonder to what extent the fallout from the economic crisis and the backlash against economic modelling would factor in to your analysis…



    June 6, 2014 at 5:38 pm

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