Poor economics II

I said before that I would give more of my impressions about the online course based on Poor Economics that I was taking. The course is now over (I passed!) and so I'll say what few things I can think of that I haven't already said. Mostly I liked the course and think that Banerjee and Duflo are doing good work. I very much like their empirical approach, which is miles away from the kind of armchair here's-why-a-minimum-wage-will-never-work stuff that puts me off a lot of economics. The results are inevitably modest, but they aren't always just confirmations of the obvious. So it seems worthwhile.

Two things struck me as questionable: the appeal to mathematics and the assumption of utilitarianism. Complicated equations are periodically brought in to illustrate or explain certain points, in a way that struck me as unnecessary. I think it's at least excusable, though, if students are to learn to evaluate Duflo's and Banerjee's work for themselves or to carry out such work independently in future. In other words, it was not necessary in this course but as preparation for related work afterwards it might be useful. I don't know.

The maths felt a bit like a display of rigor, a way to show that what was being done was at least related to academic seriousness and intellectual difficulty. It made me think about rigor-accessories in other subjects. In philosophy, for instance, you might have to pass exams in formal logic and a foreign language to get a PhD. And some papers bring in formal logic in seemingly needless ways to demonstrate rigor. I'm suspicious of this kind of thing, but I can't say it's always a waste of time.

I was reminded of all that when I read this rejection of economics. I don't agree that economics should just be scrapped, but there is something to this:

Biology uses maths when it needs it, but gets on very well as a perfectly rigorous scientific discipline most of the time without it.  In spite of the prejudice of some scientists towards the mathematical, nobody feels that biology needs more equations to be taken seriously.

But there is one academic discipline that does seem to feel the need to dress up its ideas in mathematical language.  Economists have always dabbled in numbers, and have become more and more enamoured of them as the years go by.  Economics as taught at university level is now full of differential equations and the like.

Mathematical, formal, and technical language certainly can be useful, but they can so easily be reached for as something to hide behind that it's often worth being suspicious and, where possible, ignoring them to focus on what is actually being said rather than the impressively learned way it is being presented. In ordinary language philosophy there is no such hiding, which is a good thing.

Possibly more problematic for Duflo and Banerjee is their consequentialism, which is mostly under the surface and not explicitly recognized or defended even when it comes into plain view. The main example I can think of concerns microcredit organizations. Muhammad Yunus argues (or at least asserts) that:

credit programs that seek to profit from the suffering of the poor should not be described as “microcredit,” and investors who own such programs should not be allowed to benefit from the trust and respect that microcredit banks have rightly earned.    

He is concerned, in part, with the mission of microcredit banks, which he thinks should be to relieve suffering caused by poverty rather than to make a profit. Banerjee and Duflo counter that profitable banks do relieve the suffering of the poor. They are probably right, but they are ignoring the moral aspect of Yunus' complaint. He says:

Commercialization has been a terrible wrong turn for microfinance, and it indicates a worrying “mission drift” in the motivation of those lending to the poor. Poverty should be eradicated, not seen as a money-making opportunity.

It's true that he goes on to talk about the kind of practical problems that would concern a consequentialist, but he seems also to care about motivation, not just consequences. There is something obscene, one might think, about seeing poverty as a money-making opportunity. This kind of concern, whether ultimately reasonable or not, is simply ignored by Duflo and Banerjee. Nor do they say that this is a philosophical question and that students who are interested in it should take a relevant ethics course. They just ignore it, as if it did not exist.

This kind of philosophy blindness seems to be common. My local city council is currently considering whether to continue giving money to organizations that provide various more or less charitable services. One member of the council has reportedly said that he wishes he could support them but that it simply isn't the function of government to do so. This is to treat a philosophical or ideological position as if it were something like a physical law. A friend of mine who heard about the problem suggested that the council needs more facts, and denied that there are questions of value that could not be solved by the gathering of more facts. Having just typed this I think I must have misunderstood what he was saying, but he seemed to want to deny the fact/value distinction so entirely that he ended up talking about ideas concerning the proper function of government as if they could be evaluated purely by looking at data. I have also known people talk as if moral relativism is just undeniably true and others to take utilitarianism to be so obviously right that they didn't even recognize that it is a debatable position. In short, a lot of educated people seem to be unable to identify philosophical issues. It's a sort of blindness to the existence of questions, of various logical spaces, of the possibility of thinking differently.

I think that if everyone's education included consideration of, for instance, the fact/value distinction and some basic ethical theory then the problem would be reduced (though not eradicated). Someone might then remind people suffering from temporary blindness of their high school or college philosophy course. But how many introductory-level philosophy courses spend much time on the fact/value distinction? Mine don't. And the problem might not be so much the ability to see these questions but the willingness to look. A lot of what looks like stupidity is a failure to think about causal connections. This kind of thing: if I leave the gate open and then open the door the dog might run out, which will be bad. Or: if I move into that lane now then the car nearest me will have to slow down suddenly, which could cause an accident, which will be bad. It's not that people can't think that far ahead but too often they don't bother to do so. Partly, I think, because the "which will be bad" part is erased by a giant WHATEVER. 

That, I suppose, is because we are imperfect creatures. And because we are so occupied by other things. And we don't get enough sleep. But also because we don't have as much of a sense of the reality of other people as we should. Our attitude towards them is not an attitude towards a soul but more like the attitude we have towards a minor character in a movie. They look human but their fate is no concern of ours. This is partly because there are so many people around that it is hard to care much about all of them. Perhaps it is also because we watch so much TV, play so many computer games, and spend so much time online. And when we do these things we are inside, interacting with no one, practicing passivity. That might not change our thinking or our behavior, but it is in line with our tendency not to think of ourselves as having any kind of role to play in society, any kind of job to do other than one that pays us money. I saw someone recently telling people in the UK that it is their duty to vote in the upcoming election. The very idea of duty seems extremely old-fashioned. Who now believes that we have any such thing? Of those who do, how many care much about it?

There clearly are people who have a strong sense of community and of something that might be called duty, whether they would use that word or not. But the number of such people seems to be going down. Margaret Thatcher's claim that there is no such thing as society was shocking at the time. It now seems commonplace. So far as that kind of individualism goes hand in hand with a certain kind of economics, it is good to see economists like Banerjee and Duflo doing something else.