orgtheory.net

economists are just sociologists with good math skills? welcome to the club!

Over at Econlog, Bryan Caplan finds it hard to say what is “economics” when economists produce research that has little direct connection to classical economic questions about incentives and trade-offs. These days, you’ll find economists studying things such as weight, happiness psychology, and AIDS transmission – and producing non-economic answers. In the end, he realizes that economists have begun to drop their ties to pointless academic models and started focusing on real problems. And that’s a good thing! The community of knowledge is always improved when smart people use their tools for addressing important issues.

At the end, Bryan considers how economics might be the science of society – until he realizes that there already is a science of society! It’s called sociology:

Unfortunately, this puts me in an awkward position.  There’s another field that already sounds like “the all-encompassing study of the social world”: sociology.  Not only does sociology have lower status than economics; with honorable exceptions, it’s also well-stocked with academics who aren’t fond of economics.  Tactically, then, it would be foolish to start calling ourselves “sociologists.”  If we were picking names from scratch, though, “sociologists” is exactly what modern economists ought to proudly call ourselves.

Give in to the dark side, Bryan! Let your inner sociologist come out!

On a more serious note, Bryan’s post raises questions about the economics profession and its boundaries. Here’s a thumbnail sketch of modern economics and its relation to other disciplines:

Economic theories
Yes No
Economic topic  Yes traditional economics economic history, economic sociology, management, applied stats
No applied micro, rational choice in other disciplines other social sciences, “renegade” economists

A massive simplification, but it captures important stuff. Until the 1970s, nearly all mainstream economists were stuck in the upper left corner. Then, Becker, Downs, Olson, and others started producing economic analysis of non-commercial topics (e.g., fertility, voting, etc.) Now it was cool to move into the lower left box.

In the 1990s, you saw two new developments that made the right hand side of the table cool. First, economic sociology began to flower as a distinct specialty, inspired by earlier work by Granovetter, Swedberg, Baker, and others.  Second, economists minimized the theory and just did very careful statistics on various non-economic topics. This is embodied in the work that Caplan cites (e.g., Wolfers on happiness, or Ostrom on AIDS transmission). Aside from the boilerplate “life is always about trade-offs,” there’s almost nothing economic at all. For example, one of Ostrom’s big arguments is that AIDS transmission runs along transportation routes in Africa.

What do we do now? Abolish the boundaries between fields? I’m in favor of that. Sociologists and economists can learn a lot of good stuff from each other, but I doubt it will happen. There’s seems to be a lot invested in keeping the boundaries well guarded. The “applied micro” folks find it really convenient to pretend that sociologists haven’t discovered anything of importance on topics like marriage or income, while sociologists believe that they are the noble alternative to evil conservative math-bots. Until that changes, economists will bravely go where others have gone before and the sociologists will continue charging at windmills.

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Written by fabiorojas

June 11, 2009 at 6:00 pm

19 Responses

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  1. Traditional economics has 2 unique properties:
    1. It was the outcome of the world wars.. theories that helped in rebuilding production & help in achieving basic sustenance…
    2. Has a huge bias towards credit markets and the impact it can create on the entire market

    Modern schools – with a bias of economic sociology; austrian school:
    1. Credit markets are almost always ignored… at the direct impact level atleast…
    2. The next level of human development is given preference. eg: Basic level is sustenance but next level is sustenance for all and equality, rights & everything else…

    P.S: definition of Modern in the context of the Chicago school of economic thought… otherwise, its outdated.. we are probably completing a full circle…

    I see the future as a mix of both credit market economics and economic sociology.. It is going to stir up quite a bit of a storm as they are fundamentally at conflict with the current definition of capitalism??

    This post discussed the visible nature of the difference… I am trying to bring out the fundamental difference/evolutionary logic into this topic…

    Unrelated: This is an awesome blog!!
    Reason: I sense a unique mix of ideas that are sustainable only to org theory professionals who have a multi disciplinary bias.
    Currently, the multidisciplinary fields are distinctly either sociological or sciences… Basically, I would love to see some biological evolutionary theories etc… as applied to economic sociology in the future & viceversa… I can sense that kind of ideas-exchange possible on this particular blog in the future… I see this future to bring the conflicting topics of economic sociology and traditional economics closer…

    Thanks for this blog! :)

    Disclaimer: I am not a phd/researcher/prof… so, the above opinions are very biased based on my random readings… I have always been shy of commenting on this blog for the same reason but this topic is at the core of my understanding of a lot of things in life…

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    anon

    June 11, 2009 at 7:56 pm

  2. That is why political science is where it’s at! We can poach from both y’all.

    Like

    R. Pointer

    June 11, 2009 at 9:23 pm

  3. I am in a little biased I guess but I tend to agree with Jack Hirshleifer, these other social science fields are really just economics.

    Like

    Dan in Euroland

    June 11, 2009 at 10:00 pm

  4. i’m with dan! weber and marx and simel all called themselves economists. consider the historical etymology of the word:

    c.1530, “household management,” from L. oeconomia, from Gk. oikonomia “household management,” from oikonomos “manager, steward,” from oikos “house” (cognate with L. vicus “district,” vicinus “near;” O.E. wic “dwelling, village;” see villa) + nomos “managing,” from nemein “manage” (see numismatics).

    c. 1651, The sense of “manage the resources of a country” (short for political economy).

    c. 1836, economic means “related to the science of economics,” meaning “student of political economy.” (adj.)

    Only very recently did it take on the meaning which Samuelson popularized (drawing on Lionels) which is the study of decision-making under conditions of scarcity.

    Even that’s not completely definitive. Wikipedia’s (how could one be more definitive?) initial definition is more encompassing: Economics is the social science that studies the production, distribution, and consumption of goods and services.

    I do that. So do most of the people who read this blog. So, why does one have to have intimate knowledge with double market clearing equilibrium models to call oneself an economist?

    I say we’re all economists now. And if they want to apply clever identification strategies to studying marriage, the transmission of HIV or why people join a gang, then let them eat sociological cake and call a spade a spade.

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    Sean Safford

    June 11, 2009 at 10:11 pm

  5. Ronald Coase wrote that “economists have no subject matter”. In this sense sociologists also “have no subject matter”, but most of us would probably take such a statement as a criticism. Why is this?

    I would argue that the key difference is attitude to discipline. Economists have very high notions of discipline; Gary Becker may not study the economy, but he is fiercely wedded to price theory. He would proudly declare that price theory has no subject matter, precisely because it is immune to changes in the nature of its empirical object.

    Sociologists have weaker notions of discipline; economic sociologists generally use different categories/techniques/theories from sociologists of religion. If somebody were to say “sociologists have no subject matter”, the response might be “on the contrary, we study the economy, we study religion etc”. But we change our scientific approach to suit our object, hence the implication that we have no object sounds like an accusation that we have no scientific approach.

    I would like to take a quasi-Freudian approach to this issue, and suggest that economists are people who are far more comfortable with (and arguably dependent on) epistemological authority than we sociologists are.

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    Will Davies

    June 12, 2009 at 10:04 am

  6. I would like to take a quasi-Freudian approach to this issue, and suggest that economists are people who are far more comfortable with (and arguably dependent on) epistemological authority than we sociologists are.

    That strikes me as appropriate, and also why so many of us love to hate economists. Epistemological hubris is constitutive of that discipline, and irritating to the rest of us.

    Given that, in this debate, we are the ones who come up suspicious of epistemological authority, it’s interesting that sociologists have, in general, been so dismissive of, and threatened by, postmodernism, whereas economists have essentially simply ignored it.

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    andrewperrin

    June 12, 2009 at 1:24 pm

  7. I presume you mean Oster, not Ostrom– though one can never be too sure, because the Ostroms could have generated a whole new research agenda over breakfast this morning.

    That AIDS runs along transportation routes was known a long time before Oster set pen to paper. Her contribution was to draw a connection to international exports, and to speculate that rising exports increased activity along domestic trade routes and therefore [to simplify] more trade causes more AIDS.

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    Jacob T. Levy

    June 12, 2009 at 9:00 pm

  8. What do we do now? Abolish the boundaries between fields? I’m in favor of that.

    I’m in favor of that too. But realistically, how can we start making progress toward this? Since sociology is a more macro field, should it aim at absorbing economic theory? Or is the development of the field of systems science the key? (Has anyone here read any of Kenneth Boulding’s work?

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    Christian

    June 12, 2009 at 11:44 pm

  9. Actually, I like to think of myself as a social scientist without bounds but I have to specialize in some sort of knowledge so that keeps me from embracing some methods. I guess my job is to find ways to bridge gaps.

    By the way, can anyone give me some insight into bridging Political Culture and Rational Choice? I have an idea on how I would go about it.

    Additionally, can anyone give me a rundown on the difference between Historical and Sociological Institutionalism. The articles I have read are not enough. Though I have not read P & D on the subject yet.

    Like

    R. Pointer

    June 12, 2009 at 11:57 pm

  10. Why sociology has a lower status than economics (clearly at least in terms of income)? Is economics really successful?

    Like

    Random Walker

    June 13, 2009 at 1:31 am

  11. “Why sociology has a lower status than economics (clearly at least in terms of income)? Is economics really successful?”

    Economics has two interrelated legitimating strategies that largely explain its “success:”
    a.) More numbers (i.e. more “science”)
    b.) A Nobel Prize

    Like

    Random

    June 13, 2009 at 10:07 am

  12. I am with Dan and Sean on this one Dr. Rojas. Much of what is investigated in sociology and economics (and political science for that matter) emerged from, for example, economists believing that they could better answer sociological questions (and vice versa).

    Hopefully, this post will drive home a point to undergraduate sociology departments. There are very few scholars who have any substantive influence in economics or sociology (or political science for that matter) who do not have a working knowledge of rational choice, elementary calculus, and applied stats. I say revise the sociology textbooks to account for this.

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    Brian Pitt

    June 13, 2009 at 12:46 pm

  13. @Random, Random Walker:

    The Nobel Prize in economics started well after economics rose to prominence in policy circles, as well as academia. The Nobel Prize was first awarded in 1969. On the other hand, the Council of Economic Advisors was created in 1946 with the Full Employment Act, giving economists a voice in the White House that no other profession (let alone professional social science) had or has. For an excellent account of how economics managed to become so policy-relevant while at the same time maintaining itself as an academically rigorous field, see Bernstein (2001) A Perilous Progress: Economists and Public Purpose in 20th Century America. It took several tries – economists offered relatively little in WWI and the interwar years, for example, and ‘failed’ Hoover by failing to predict or help deal with the Great Depression. During WWII, economists were integral to planning the war efforts – in part due to advances in mathematical economics (e.g. Leontief’s input-output model) and in part due to dramatic improvements in data collection making those mathematical tools useful.

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    Dan Hirschman

    June 14, 2009 at 8:57 pm

  14. […] beliefs about how the world works because of some regression analysis." Caplan also sparked a discussion on orgtheory.net about the relationship between economics and sociology. Is the former just the latter plus […]

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  15. 1. I have a class this spring semester, Econ 561: Economics of Multinational Enterprises. My term paper presentation is on Dunning’s “New Paradigm of Development” which draws on Stiglitz, Sen, and North, all of whom have written about the need to consider success beyond GDP Per Capita: agency, choice, public goods, social capital, and cultural values. (Sen has a graph showing GDP Per Capita 180 degrees out of phase with Life Expectancy for UK 1900-1960 = You can make more money, but you’ll kill yourself doing it.)

    2. Von Mises set economics apart from sociology because economists start with the individual. I tried suggesting “Crusoe concepts” to my sociology professors and drew only blank stares. A man on an island needs economics. Sociology would be meaningless in that context — but I argue otherwise: One man; One culture. I might as well have been speaking Hungarian.

    3. 500 years ago, there were only Philosophy, Law, Medicine and Theology. Then, knowledge exploded. Now we have so many studies they claim each other’s space. Perhaps we will see a grand synthesizing and a collapse of specialities and a flowering of macro theories. At least for a while. With brain chips or whatever, we might be able to hold more in our heads. But, I speculate…

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    Michael E. Marotta

    June 15, 2009 at 11:51 am

  16. Marotta, I think you might find that Carl Menger help start that MI stuff. Check out “Hayek’s Challenge” for a wonderful intellectual history of the Methodenstreit.

    Like

    R. Pointer

    June 15, 2009 at 5:27 pm

  17. I think the turn that economics took after the principle of revealed preference took hold is a key distinction. Agnosticism about micro dynamics is a nasty problem for law & econ at least.

    But it’s not entirely fair to ascribe that agnosticism to economics at large. Certainly Schumpeter and Hayek Had their eye on the ball.

    Anyway comparative statics is useful as an approximation. It was probably the suggestion that preferences did not evolve (hence no evolution subject to others’ influence) that did more damage than anything else.

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    Michael F. Martin

    June 17, 2009 at 2:18 am

  18. […] a related story, now economists are admitting that what they do is really sociology. Arguments about how useful a rigidly quantitative approach to human life is aside, I would say […]

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  19. […] beliefs about how the world works because of some regression analysis.” Caplan also sparked a discussion on orgtheory.net about the relationship between economics and sociology. Is the former just the latter plus […]

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