- Actor Chris O'Donnell '92 gives Agape Latte talk (pg. 38)
- "Women's Voices: Forming Conscience, Raising Consciousness," a panel discussion with faculty members Kerry Cronin, Kristin Heyer, M. Cathleen Kaveny, Régine Jean-Charles (pg. 40)
- From the Center for Retirement Research: The Susceptibility Index (pg. 12)
- Conference papers from the Philanthropy Forum: "The Rise of Donor Advised Funds—Should Congress Respond?" (pg. 76)
View upcoming events at Boston College
Books by alumni, faculty, and staff
Order books noted in Boston College Magazine
Join the online community of alumni
View the current BCM in original format
Principles of economics
As a person who finds checkbook-balancing an ordeal and who tips 20 percent at restaurants because 10 percent is mean and every gradient in between leaves me staring fixedly at the check as though trying to fight my way back from an on-field concussion, I’ve always felt that “the dismal science” seemed an apt nickname for economics.
I was disappointed, therefore, to learn a few years back that Thomas Carlyle, the coiner of “dismal science,” did not, in fact, have in mind the gloom one might feel at the prospect of compelled arithmetic or upon discovering that one had packed Econometrica instead of the New Yorker for a flight to Dallas. Carlyle’s disdain, rather, stemmed from his encounter with Malthusian theory, which, we can all agree, had reached decidedly dismal conclusions.
But I’ve since learned that the eminent Scottish historian had not in fact been pondering the link between procreation and famine when he soured on economics but the views of John Stuart Mill and other political economists regarding slavery and serfdom. As stunningly obtuse and retrograde as he was brilliant, Carlyle believed, among other things, that Africans were “two-legged cattle” needful of the “beneficent whip,” that the Irish were a naturally slavish race, and that Mill and company’s view of human beings as equal and entitled to freedom did nothing less than threaten the well-ordered edifice of empire and civilization that adorned the world. In a disturbing (to say the least) 1849 essay titled “Occasional Discourse on the Negro Question,” Carlyle said of economics: “[T]he Social Science . . . which finds the secret of this universe in ‘supply and demand,’ and reduces the duty of human governors to that of letting men alone, is . . . a dreary, desolate, and indeed quite abject and distressing [science]; what we might call, by way of eminence, the dismal science.”
If Carlyle and fellow travelers (Dickens and Ruskin among them) were angered by the strong political views of the economists of their time, critics of present-day economists have been distressed by a turn away from hot-blooded politics and into the chill arms of abstraction and formula. The charges, as I understand them, are that the rational-actor-obsessed neoclassical economists—the main villains along with Keynesians in this morality play—suffer from “physics envy”; are useless as predictors of economic events (see October 2008); and stand in such idolatrous awe of their sublime models that they fail to note that human beings and their human-wrought institutions do not necessarily bend to the urgings of mathematical constructs and thereby come to considerable harm (see October 2008).
But neoclassical-Keynesian theory, while it dominates testimony before congressional committees, is not all of present-day economics, which happily includes ventures such as “The Best of Times, The Worst of Times: Understanding Pro-Cyclical Mortality,” a paper that delves the long-known relationship between prosperity and higher rates of mortality and, after frying up a whole school of red herrings—e.g., the unemployed have more time for exercise or can’t afford doughnuts and therefore eat fruit—lands on the finding that in bad times nursing homes are able to hire experienced staff to fill low-wage patient-care jobs, and in good times they take who they can get.
That citation was drawn from a cache of papers published since 1920 by the National Bureau of Economic Research (NBER), a Cambridge, Massachusetts, think tank. (Full disclosure: My wife is a non-economist administrator at NBER.)
“The bureau”—as it’s referred to by insiders—coalesces around a few thousand invited “family” members (including 26 Nobelists, at last count). And while NBER posts plenty of documents pitched higher than a dog can hear (“Segregated Security Exchanges with Ex Ante Rights to Trade: A Market-Based Solution to Collateral-Constrained Externalities”), it also takes on such questions as: Does the Ramadan fast depress productivity in Muslim nations? (Yes.) Does it increase feelings of self-worth? (Yes.) Is the importation of foreign technology workers good for local economies? (Yes, in that wages rise for native workers; but no in that housing becomes more expensive.) Does parachuting in a “star” faculty member benefit a university academic department? (No, as regards the productivity of incumbent colleagues. But yes as regards the quality of subsequent hires.)
Is this dismal science? I suppose it is if one assumes that it’s the work of a science to bring us to a certainty and not an ambiguity. That’s what we expect of physics, for example. But physics focuses on bodies that move according to immutable law (we believe), while the subjects of social science weave and bob, distracted by desire, devotion, Monet, the dark wood at the edge of the clearing, or the need to understand physics. It’s a complicated science certainly, though (except that it involves mathematics) hardly dismal.
Our story on efforts by two economists to understand human behavior in markets in which money is not the currency begins here.
Read more by Ben Birnbaum