The Paul Millsap of Economics?

Even though I’m in the office working on a Saturday, I had a colleague (and fellow Jazz fan, incidentally) come by and berate me for comparing the great Bill Russell to Paul Millsap. Now, I’m a huge fan of Millsap—look at Game 2 of this series; he was the most valuable player on the floor—so I don’t consider this an insult to Russell.  But I realize some people get upset by not giving the greats of the past their due.

My colleague characterized the Millsap/Russell comparison as saying that Adam Smith was not a great economist because he couldn’t compete with economists if he were alive today (at least not without a lot of new training).  Certainly one could make the case that Smith, the “father” of the discipline, was a great economist.  But what are we to do with him today?  My fellow blogger, Jim, is a Smith expert and has written extensively on him, so I have to be careful.

PhD students in economics these days rarely read Smith.  In fact a philosopher or political scientist, I would conjecture, is much more likely to have read Smith than an economist .  In economics, “history” is anything published more than 20 years ago, and anything published before the great general equilibrium papers (Arrow-Debreu, etc.) in the 1950s is just “history of thought,” and there are like 2 people in the nation that are writing dissertations on the history of thought and probably fewer economics departments who want to hire them.

For better or worse, economics is a cumulative discipline.  A big premium exists for being well-schooled in the state of the art, but not much career value in saying, “Jones is really just arguing what Adam Smith said in a less technical way.”  Those comments just elicit a collective yawn from the discipline.  Paul Samuelson gave a coherent mathematical structure to Marshall and other predecessors, and we have all moved on with that structure .  Smith, actually, can still be read today by economists because of the clarity of his writing, but people like Ricardo—immensely influential historically—are impenetrable and a waste of time.  Understanding Ricardian Equivalence is key if you are macro guy, but reading Ricardo is not.  There are great economists today (though very few under 60, I would guess) who are conversant with the old masters, but most of just fake it.  Give us an Adam Smith cheat sheet, and we are good to go.  From time to time I have read parts of the classics.  But every time I do, I conclude afresh that this is not a good use of my time.

Our philosopher friends and others look at us disdainfully for our ahistorical discipline.  But I say, give us some useful answers, or shut up.  Some disciplines are not cumulative, and I conjecture that is a mark of the immaturity and lack of progress in those disciplines (though sometimes lack of progress is a function of the inherent difficulty of the field).  Economics is a relatively young discipline, but a mature one because we don’t have to start at the beginning all the time.  The discipline itself has sifted through the past research and preserves what has utility (though I’m not saying some out-of-fashion ideas don’t deserve being resurrected).   The more a discipline looks to its history, the less it has to say of value in today’s world.  I don’t think any of the hard scientists are focused on the past.

Now sometimes we look to the past because disciplines have declined.  Who can argue that symphonic music, for instance, has improved in the last century?  We still listen to the classics not because we are awaiting for good music to be discovered, but because there was so little that was really good in the 20th century.

In social science and the NBA, this is not the case.   I’d still take Paul Millsap.

7 thoughts on “The Paul Millsap of Economics?

  1. Sven, a couple of thoughts here.

    1. Flip the question. How many of the top economists of today could you imagine would have, could have, written Wealth of Nations, given the resources available to Smith? Be realistic: what are the chances that anybody could? Isn’t that relevant as an assessment of Smith himself as an economic mind?

    2. That said, you’re right that there are disciplinary differences to the significance of the work Smith did. It makes sense to think that Smith’s work might be of no more relevance to cutting edge economic research than, say, Aristotle’s biology is to cutting-edge biological research. I doubt that’s true, but that seems like a viable empirical question, and I’d certainly defer to economists that think his work is not all that relevant. Still, relevant to what? Is economics supposed to be a science in the sense of generating useful predictions? I’d think Smith’s track record would likely hold up pretty well to predictions being made today. He might not relevant to lots of contemporary theory, but what is that theory about and what is it good for? Arguably Smith might have more to day about explanation of wealth-creation in ways that really matter for thinking about policy. (Arguably, I say. I’m not an economist so I’m prepared to defer here.)

    3. I also think it makes sense to think that philosophy is different in a way that makes its history different too. Most of the early 20th century philosophers who thought that history made no difference at all now make no difference as well, whereas the history of philosophy is alive and well, for purposes of contemporary philosophy. Why? Part of it is (as I’ve argued before) that the problems of philosophy don’t really change that much). And they are complex in ways that in many cases (not all) it’s hard to see how much we have advanced since Plato or Aristotle. How much more do we know, for example, about what living well as a human being comes to? There are lots of components in answering that question where we’ve made great strides, to be sure. But in putting the whole picture together? If you ask me, not much at all. And there’s certainly no philosopher writing today who I’d bet could contribute as much to human understanding 2500 years ago as, say, Aristotle did. That’s why so many of us think we’re lucky to still be learning from him. But I don’t see any reason to extend those lessons from philosophy to other disciplines.

    1. No time for thoughtful replies right now, just a couple of quick ones.

      1. I think Smith has survived the test of time really well and his work is just as relevant today as it was in 1776 (in many cases more relevant, given the Leviathan state that has evolved since then). But to say he is extremely relevant is not to say he is necessary, in that his insights are alive today in any number of contemporary writers. And modern economics contains many tools foreign to Smith, such as the whole of marginal analysis, for instance (though experts like Jim might be able to point out marginality in smith as well).

      2. On the question of what constitutes “living well” I think we have made enormous strides in empirical knowledge–certainly along the lines of what makes for good mental health and life satisfaction (if not eudamonia).

      3. Smith, Aristotle, and Bill Russell made enormous strides forward, which I don’t deny. If that is the definition of greatness, then great they certainly are. But I doubt the marginal value of learning Smith today. So my question is this, if I picked up a modern philosophy textbook and learned it well–meaning I had the aid of a modern philosopher going through all the old writings, integrating and comparing them, and putting them in my language, would the marginal value of reading Aristotle still be high (other than for commenting on Aristotle)? I’m not saying it wouldn’t be, but I wonder.

      1. Sven, I agree I think about Smith’s work. (Add on to that the labor theory of value he was working with.) Is that the question, though, or the question how he stacks up to current economist? I’d think the Millsap question would be more like the latter. And then my question about who could have stood with Smith in his time seems relevant.

        I disagree with you I’m pretty sure about insights into living well, where I think the legacy from the modern period left us with massive commonly-accepted assumptions that are simply false (such as that we are better off in virtue of having our desires satisfied). This is obviously a philosophical question, but I’d want to argue that in many ways we know less, while thinking we know more, than Aristotle did.

        As to your last point: I’d recommend reading original texts over modern digests of them about 100 out of 100 times (I wonder if Jim would disagree with me on that). But I’m not sure if that’s exactly the issue you’re raising here.

    2. What gives someone the ability to make a major intellectual advance? Native intelligence? Creativity? Luck? I don’t know.

      So, who–put in the position of Smith–could have accomplished what he did? Precious few, probably. But that is not my point. I actually think that given what we know today, a lot of people could write the Wealth of Nations now, and they could do so with a lot more sophistication and better reasoning than Smith.

      When I read old-time papers (like from the 1970s) that were very important, I often think, “Dang, I wish I could travel back in time to write this paper and get all the glory that goes along with it” But this assumes that I can take the knowledge that the discipline has accumulated along with me.

      If Paul Millsap grew up at the time Russell did, would he have had an impact? Doubtful. But if you put today’s Millsap in a time machine and send him back to 1960, he would be a dominant player in the league, no doubt about it.

  2. Well, Sven, you’ve really thrown down the gauntlet here, haven’t you? “Give us some useful answers, or shut up”? Hmmm . . . I can see that a lot of what goes on in academia today wouldn’t pass that test. But I wonder how many economists–indeed, how much of economics–would.

    At any rate, whether the marginal value of reading Smith (or Aristotle) is worth it to you only you can say. I can say, however, that it most certainly is worth my time. I can also say that when I have my economics students read Smith, they almost invariably come away thinking it was worth their time too.

    I think Mark is right that we think we’re a lot smarter today than we in fact are. We have a lot more facts at our disposal–I don’t think anyone can deny that–but possession of, or rather access to (an important distinction) facts does not imply wisdom or virtue. It doesn’t even imply knowledge, as long as ‘knowledge’ means an ability to use and apply facts effectively.

    But I would also challenge you a bit on the extent to which you seem to think economics is a science, modeled along the lines of the “hard” sciences. If, for example, one believes that making predictions is one important aspect of a science, then economics has an awfully long way to go. If, moreover, construction of testable and falsifiable causal laws explaining observed phenomena is another important aspect of a science, then economics struggles with that as well. Economics assumes a lot of principles that hold only with very large ceteris paribus qualifiers, it has only a slight connection to related disciplines like psychology, and many of its mathematical models are ad hoc, of little predictive value, or both.

    Now don’t get me wrong: I think economics has an enormous amount to offer. Indeed, I think it is a grave mistake that an introduction to economic principles course is not required as a core part of an undergraduate education. But the extent to which human behavior is quantifiable and predictable the way the behavior of a feather dropped in a vacuum at sea level is, is a large and open question. Economists often assume they’ve made more progress on this front than they in fact have. But the history of economics contains at least as many follies, errors, and absurdities as the histories of other sciences do, which is itself an important thing to consider when judging a discipline–and another reason to learn the discipline’s history.

    On the other hand, some people have been able to understand the motivations of human behavior in the circumstances in which human beings find themselves far better than almost everyone else. Some people have perceived aspects of enduring human questions–life, death, justice, beauty, happiness, virtue–in deep and profound ways that transcend their own local situations and provide continuing insight and even inspiration. Some people have been able to spark almost entirely new lines of thought and inquiry by applying some of these deep insights to carefully observed and scrutinized human behavior. Adam Smith is one of those people. He didn’t get everything right, of course: no one does. But as long as we are still roughly the same kinds of human beings facing many of the same kinds of challenges, how can Smith fail to provide insight for us?

    It’s true that Smith’s work would not pass economics journal peer-review muster today; neither would David Hume’s or Aristotle’s work pass philosophy muster today. But that is not why we (or at least I) read Hume and Aristotle, and it is not why I read Smith.

    A final thought. The argument you make in your post reminds me of the themes in one of my favorite essays, Albert Jay Nock’s “The Disadvantages of Being Educated.” I’d recommend it to you, though I can’t know whether it will be worth the marginal value!

    1. Jim, sorry for being overly provocative. I get carried away sometimes.

      Anyway, I could write a very long post on the failures and shortcomings of economics today. Maybe I will some time.

      I think reading more Adam Smith would be “worth my time” in that I would certainly learn new things. And I always like learning new things. I’m skeptical it would do much for me or for most economists in terms of being able to do better economics, however. [And I have to add the caveat that relatively little of my research career has been spent on doing standard economics.]

      So, for students learning how to think like economists, I think it is great for them to read Smith. But I’m highly skeptical that professional economists would do better work by going back and reading Smith, especially when considering the opportunity cost.

  3. Sven, Economist Peter Boettke (also a blogger at Coordination Problem) penned a defense of reading classic works such as Adam Smith in 2000 with an essay that is available on Econlog, Why Read the Classics in Economics? You can find it here: http://www.econlib.org/library/Features/feature2.html.

    You might want to read this essay and reconsider (or at least respond to Pete’s compelling argument).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s