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sociologists should conquer macroeconomics

A commenter in a recent thread said that sociologists should attack economic problems, and not in the way the economic sociology currently does (i.e., treat markets or prices as another social construction). Sociologists should come up with some distinctive behavioral models and then show that they work. That comment inspired me to blog about an idea that’s been in my head for a while: The field of macroeconomics is ripe for a sociological take over.

Here are the reasons:

  1. It is a field where traditional economic models are widely acknowledged to be a massive failure.
  2. It is a field where historical contingency seems to matter a hell of a lot (see the Lucas critique).
  3. It is a field where non-linearity, complexity, and emergence matter. Scale shifts and feedback loops are common.
  4. It is a field where performativity matters – economic and political ideas get built into economic practices, which then affects business cycles and later policy.

In other words, macroeconomic systems display all the qualities that beg for sociological analyses. They are also the same properties that make micro-style theory of limited value. If you need a new topic to work on, email me.

Written by fabiorojas

April 2, 2010 at 12:53 am

Posted in economics, fabio, sociology

21 Responses

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  1. Hear, hear.

    One way to look at macroeconomic issues is that they are essentially issues of macro social and political structures. Even before we consider the paucity of macroeconomic models and theorizing, there is the importance of the social… it’s a very institutionalist problem.

    (and by the way, economic history is basically historical sociology, too.)

    Like

    cwalken

    April 2, 2010 at 5:16 am

  2. i don’t know if soc looks like a winner here.
    a big part of the appeal of macro is that it serve as a guide to action. in this sense clarity and parsimony are as important as validity. whatever you may think of the validity of, for instance, the taylor rule, you have to admit that it provides a much more concrete guide to action than anything we’re likely to come up with. this is one of the core disputes between the sociological and economic modes of theorizing — we are so uncomfortable with simplifying (oversimplifying?) assumptions that our models are too underspecified to imply predictions or prescription.

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    gabrielrossman

    April 2, 2010 at 6:57 am

  3. I think macroeconomics is mislabelled. Hayek’s theory of spontaneous order is a real theory of macroeconomics, and it’s sociological. What we call macro is really intermedieconomics.

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    Troy Camplin

    April 2, 2010 at 8:02 am

  4. Wouldn’t the French regulation school be an example of what you’re talking about? Leading members of it (Robert Boyer and others) even acted as advisors to the French government during the 1970s. OK, so this is Marxist, not sociological. But it still seeks to explain macro and micro-economic stability in terms of inter-locking institutions, technologies and social norms.

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    Will Davies

    April 2, 2010 at 10:35 am

  5. Hell, yeah.
    & re. GR- it’s true that a discipline that gives clear answers, even if contradictory and mistaken, has anunfair advantage. Partly what’s needed is better popularizers, too. But yes: indeterminacy & context-sensitivity are hard to sell.

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    x. trapnel

    April 2, 2010 at 10:51 am

  6. Give me a few years, I’m working on it?

    Seriously though, I think the Taylor Rule and Okun’s Law would be wonderful sites for performativity-type analysis. But I’m not sure that style of research will ever aggregate up into a parsimonious research program that could have the kind of policy-oomph of traditional macro. So, to return the question – Fabio, are you thinking of a takeover of macroeconomics as an academic endeavor (investigating economic systems writ-large) or a way of structuring policies or both? There’s obviously a big connection, but the two are currently only semi-connected (hence the recent cries from macroeconomists that the current crisis wasn’t their fault, and the responses that it wasn’t their fault because modern macro is useless arithmetic).

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    Dan Hirschman

    April 2, 2010 at 11:00 am

  7. To be fair, many economists think that “macro is too important to be left to the macroeconomists.” From the perspective of most other branches of econ, what macroeconomists do seems crazy.

    Essentially all other empirical economists think that most of the empirical work doesn’t make sense, because macroeconomists don’t worry much about identification.

    The style of theorizing is also pretty distant from what most other theorists do and rests on assumptions that theorists would be uncomfortable with. In particular, it ignores fundamental theorems in micro that say that aggregation in the way macro people use it is impossible. And then, of course, macro people use only the simplest and most basic of utility functions for their representative agents that any decision theorist would say is transparently bogus.

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    yes

    April 2, 2010 at 12:14 pm

  8. I’m game. Anything to shock macro out of its current state. I’m curious to see what sort of policy advice would come out of such an approach.

    I’d actually like to see more (not all) macroeconomists go back to forecasting like they did in the 60s and 70s only because I think there are clearer measures of success. Kind of like trying to predict the weather. If macroeconomists would just say, well there’s a 20% chance of full recovery in 2 years and 50% chance it’ll take 3 years, etc., then they would be admitting incomplete knowledge and thereby gain back some credibility.

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    Mike M.

    April 2, 2010 at 5:08 pm

  9. I agree. I´m macroeconomist, but not very orthodox: I think history is far more important than mathematics in Macroeconomic. Was Hayek an economist, or a historian, or a sociologist? On the other hand, less mathematics causes a lost in precision. I suspect the mathematics has been a barrier built against the “intrusion” of sociologist. The secret lies between “Truth versus Precision”.

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    Luis H Arroyo

    April 2, 2010 at 6:01 pm

  10. … And the Taylor rule is not macroeconomic: is simply mystic. A hypothesis that works every time is not serious.

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    Luis H Arroyo

    April 2, 2010 at 6:10 pm

  11. You must be joking :) … sometimes I get really angry when I see how little us sociologists know about what economists do … the only place where our “sociology” has could have any input is in the behavioral economics (“irrational exuberance” style) … I’m having a hard time here, but maybe we could discuss about class, specialized knowledge and it role in the society … I absolutely fail to see what kind of input could the “social constructivism” that pervades economic sociology have on the macroeconomic aspects such as international trade or monetary economics …

    macroeconomics, at its core, it’s a set of measures such as GDP, monetary aggregates or unemployment … and a causal theory connecting all of them, the same way we talk about the determinants of educational achievement … it’s first and foremost a descriptive enterprise, with the same familiar attempts to “causalize” it in order to sell it to the laymen …

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    My2C

    April 2, 2010 at 10:25 pm

  12. maybe before having this discussion we should start be stating what have we read in macroeconomics … even a macroeconomics 101 I expect to be a rare asset :(

    Like

    My2C

    April 2, 2010 at 10:27 pm

  13. Well with respect to performativity, macroeconomists do analyze sunspot equilibria. I am not sure that is what you are looking for but economists are interested in how “reflexive” situations impact economic variables.

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    Dan in Euroland

    April 2, 2010 at 11:29 pm

  14. color me inspired…

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    chris uggen

    April 3, 2010 at 12:04 am

  15. Glad to see my comment inspired you, Fabio! (Although I was bummed to be downgraded from “emeritus guest blogger” to “commenter”…) ;-)

    I do agree with many others here that a sociological takeover of macroeconomics would require us to make some clear assumptions and put our money where our mouth is by engaging in prediction. As far as I understand it (which, admittedly, is not very far), its claim to predictive validity is the reason policy makers take econ seriously.

    I’ve often fantasized about there being a sociology website that offered more accurate economic forecasts than the economists. Given the way sociologists usually talk about how ridiculous economics is, this should be easy, right? ;-)

    Like

    Steve Vaisey

    April 3, 2010 at 2:43 am

  16. You mean American students should be studying Structural Marxism?

    Like

    Guillermo

    April 3, 2010 at 4:08 am

  17. Arroyo,

    I believe it was Pierce who said that mathematics is a precise approximation of reality. The problem with mathematical approaches is precisely that people are trying to come up with a precise description of an inherently imprecise reality when they use math. I would argue that the mathematical approach to economics has done far more harm than good. Don’t get me wrong, it’s useful for a handful of things — but it’s utterly useless in describing reality. The best math for economics is systems/complexity mathematics, and that creates models only. All in all, less precision would be a huge improvement, as it would get us closer to discussing how the world really is rather than how it should be if only it would conform to mathematical precision.

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    Troy Camplin

    April 3, 2010 at 5:36 am

  18. Camplin, I think I agree completely; my disaffection to mathematics comes from my initial enthusiasm for it. My paramount in this type of discussion -economics and mathematics- is a Larry Summers´ paper (the name of which I don´t remember) about the near null contribution of mathematics/econometric in economics. He cited the monetary history of the US, by M. Friedman, as the perfect example of low mathematic profile and great contribution to economic knowledge. Certainly, I think it´s a work perfectly accessible to any reader with no much level of mathematics. And its contribution to economic policy is out of discussion.

    Like

    Luis H Arroyo

    April 3, 2010 at 6:56 pm

  19. Fabio, all: Many thanks for this set of observations and aspirations. Three further reflections:
    1. Bringing the social/sociological back in to macro economics usefully starts with some archaeology of the field as it developed post WW2 — with the conventions about what are key questions, what is to be explained, and what are the tools. There is a rich set of empirical studies on many of these issues, scattered in journals like Accounting, Organizations & Society and Economy & Society. There is also the wonderful polemic by Marilyn Waring, ‘If women counted’
    2. I agree with Will that we can look to Boyer and others in the Regulation School. But also to a range of socio-economics that are starting to flourish and to the policy engagements in several countries that have experimented with advisors (and elected leaders) trained in the ‘social’ social sciences. The strategy Fligstein uses to pivot an account of markets that starts from premises orthogonal to received economic wisdom also seems a useful strategy to re-imagine issues and questions for a renovated macroecon — waiting for a different content but building from a similar sensibility about how to generate sociological theory and policy/practice.
    3. The issue raised here in several posts and in a range of like conversations does focus on the ability to provide apparently concise and validated policy advice, regardless of the longer-term stability of that advice. This would suggest that we want some richer ethnographic appreciation of the policy process and policy community, rather than simply working on the specifics of one ‘input’. There is much sociological knowledge relevant to the issues and the policy. In part, it may be a question of the absorptive capacity of that work in agency context — recall Fujimura’s work on how successful cancer researchers learn to package science into grant-proposal-amenable bits, the lessons of Dani Rodrik’s book ‘One economics, many economies,’ and the citation study by Kogut and Spicer of the way World Bank economists missed decades of work on development by political scientists and sociologists, in favor of a more restricted literature by (a subgroup of) econonomists.

    Like

    Marc Ventresca

    April 4, 2010 at 8:28 am

  20. I know at least one guy who has already started doing something similar to this. See the work of Timothy Mitchell, especially his book “Rule of the Experts”

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    Justin Kraus

    April 4, 2010 at 10:16 am

  21. News on Alcoholism continually updated from thousands of sources around the net.

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    Alcoholism

    December 6, 2010 at 3:18 am


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