What Nick Rowe Does at 6:00 PM

    There are many better things he could be doing. However, he instead reads and leaves comments over at Diary of a Republican Hater. You got to love him for that. Sorry I couldn't resist. Some of my recent posts have led to some pretty interesting and intense discussions in the comments section, in particular, this piece about "cash mysticism."

    http://diaryofarepublicanhater.blogspot.com/2013/02/do-we-need-banks-and-phystical-cash.html?showComment=1360218187763#c4986681425841401035

    Mind you it's not clear what was resolved about 'bank mysticism' other than that nobody admits to having it. Here were the comments by Nick that inspired my title:

    " It's 6.00pm and I'm tired and drained after dealing with a load of Alleged Instructional Offences."

    "Every year I teach 330 students intro economics. They (and the taxpayer) pay me good money to do that. They have a good claim on my time. I give them my time, and try to explain things (like elasticity) to them. But I expect them to read the textbook too. You can see where I'm going with this thought."

     "I should be doing other things."

     http://diaryofarepublicanhater.blogspot.com/2013/02/do-we-need-banks-and-phystical-cash.html?showComment=1360218187763#c4986681425841401035

      Nick you know I love you. In fairness he also did also weigh in with some great comments in a discussion with Tom Brown. Those quotes above weren't the whole story.

      Tom-who's incisive comments are always appreciated-had a great response to Nick's response. Nick then had a great response to that response where he said:

      "Tom: thanks for your polite response to my slightly less than polite comment."

      I appreciated it too as I had considered a response as well that was a "slightly less than polite comment.

      In all seriousness, while I take Nick's point, I would like to push back a little to his point that he teaches this stuff all day to students from whom he's paid. Isn't there a case to be made, however, to argue that Nick as an economist is part of a breed of what has been called "public intellectuals" or perhaps "civil servants" or "public servants?" Maybe I'm not using the exact phrase I want here but  don't economists as social scientists maybe owe society a little more than those in most other professions? If you're a carpenter I have no right to expect you to do work on my house after hours free of charge.

      However, don't social scientists owe society a little more, as privileged members of their society who have benefited disproportionately from it's fruits? Don't get me wrong, I don't mean they don't have a right to life as a private person-and can "do other things" at 6 in the evening!

     However, considering the quite large amount of authority we ascribe to them and their knowledge shouldn't they try to engage us more than telling us to go home and read a textbook? Again, I'm asking. I agree with Nick that if you read Keen you should be willing to read those he criticizes on their own terms.

    Whoever it is that Nick has in mind when he talks about "Someone who has taken the time to read Steve Keen's book, but is too scared to read any standard intro text for fear it might indoctrinate him....? Does not compute." it isn't me. I'm currently in the middle of a-if I say so myself-rather ambitious undertaking, I'm reading "Rational Expectations and Econometrics" edited by none other than Robert Lucas and Tom Sargent. If that doesn't show a willingness to listen on their terms nothing will.

   Nick may well be right that it would benefit us to read a first year textbook. Nevertheless, what's unusual in this request is that it's a discussion of issues that effect us all. These are social issues as well. Usually when we discuss political and social issues, we assume that you have an opinion regardless of what you have or haven't read.

   In Macro, the mainstream guys tell you that before they will even converse with you-go read a textbook.

   It's different is all. There are issues that effect us and our societies. Yet our opinion doesn't matter unless we've read a certain textbook.

    In fairness to Nick-and the other Market Monetarists-they in many ways bring economics much more to the man in the street than we've ever seen before. IN many ways this is a Golden Age of economics in terms of the level of participation of the man in the street-it's a like the old Salon's Circa 2013.

     Nick is very engaged and does bring a lot of knowledge to many as do the other MMers and other econ guys. Whatever you want to say about Sumner, I was barely aware of monetary policy until coming across him.

     I am fully willing to listen to both sides. However, a textbook is a pretty dry way to learn anything. From what I understand, many of the econ students don't read that much of the textbook. What's more let's look at comments made by UnlearningEcon-a guy who, at the least, actually has read the textbooks.  I had made this comment on a previous post:

      My vantage point is similar to Tom's in that I'm an interested layman. All the mathematical symbols are another language to me-though I find I'm starting to follow some of it easier-still have a long way to go.

     Often I'll read an argument form someone like Sumner that intuitively I feel is wrong but I lack the theoretical firepower to show why exactly. Sumner can therefore dismiss it as just being ignorant of econ or "public finance" or whatever.

     Unlearning is therefore a good resource. In general you just have to be bi-dimensional in reading both heterodox and mainstream econ. As long as the mainstream is Neoclassical you have to read Neoclassical stuff so you can even criticize it in an informed way. Snarky comments over at New Economic Perspectives may feel satisfying but at the end of the day have you furthered understanding? That's the question that counts.
        
      http://diaryofarepublicanhater.blogspot.com/2013/02/mainstream-vs-heterdox-economic-ideas.html

     This is what he had to say about the situation:

     

     Thanks for the kind words!

     "This is exactly the problem I observed and the gap I tried to fill in the blogosphere. Economists talk in terms of their theories - none moreso than Sumner - so it can be difficult to converse with them if you don't really know it. Economic models can sometimes feel like a black box - I'd be willing to bet that a substantial proportion of undergraduates who can solve IS/LM problems don't really know or care what IS/LM is about."

      "Certain economists revel in this, as they think they have 'mastered' the discipline and therefore proven themselves. But in reality it's a massive problem, and employers have complained about the complete lack of real world, jargon free knowledge they find in their economics graduates. It only serves to strengthen both the beliefs of economists that they are oppressed mathematical superiors that nobody understands but everyone hates, along with the heterodox contention that they are lost in largely meaningless models and, while book smart, lack a good sense of what's important in science."

       "BTW, there is table of contents of all of my posts on DE here:

        http://jrm-research.blogspot.co.uk/2013/01/a-year-ago-i-read-steve-keen-debunking.html

        I know Nick doesn't like the use of terms like "heterodox" and "establishment" or "orthodox":
    
        "Funnily enough, my "The supply of money is demand-determined" post was very unorthodox. Orthodox New Keynesian economists, and some monetarists, and most central bank economists, indeed most economists, would totally disagree with what I said there. It's much better to stop seeing economics through that orthodox/heterodox dichotomy. It doesn't work."

         but I do think the way that Keen and Unlearning use it has meaning.

          I guess one simple way to figure out if you're an establishment econ guy is this: if you want tell them to read the textbook, you're establishment. This doesn't make you a bad person or wrong even. Maybe you're right. But that's not a bad rule of thumb.

          More broadly, I think the mainstream econ world of today is for better or worse Neoclassical. The term isn't an insult as such. The school goes back to 1871 with Walaras, Menger, and Jevons founding the schools in their respective countries.

          There are certain ideas that the Neo school has: equilbirium, perfect competition, a downward sloping demand curve.

          There are differences among the different economists, some very major. Yet at the end of the day, everyone from Krugman to Sumner to even Bob Murphy would agree with much of it.

          I don't see either the heterodox guys or the mainstream guys as being all bad. I think that the mainstream guys need to try being a little less condescending-I think for the most part Nick isn't at all but quite the opposite, and you have to love David Glasner who is about as snark free as you could want.

           I think Scott is little more "flappable" but still he does devote lots of time and energy in bringing ideas to us that we previously had little exposure to.

          Yet I think that the heterodox guys are often full of unhelpful snark and cant themselves. Some seem to think that they ruder and more abrupt you are in denouncing anything you think is wrong, the more brilliant you must be. Their attitude can definitely rankle. I still love to think of that guy over at Sumner who declared some big pronouncement on how the modern monetary world works and then finished it off with 'and how do I know this? I work at a friggin bank!'

          While I said that I do think that the Market Monetarists are broadly speaking Neoclassical like most mainstream economists-Glasner has no problem admitting this, but most MMers want to feel that they are fighting against the establishment-they have been part of a real flowering in economics here on the blogosphere-though of course people like Stephen Williamson sniff at the blogs even as he himself writes one.

          My guess is that what we've entered is a new age of economics that will be characterized by a good deal of flux for sometime. The Economist did a piece back in late 2011 about new heterodox schools and listed MM, MMT, and Internet Austrianism.  

           Which school will "win?" My guess is it won't be clear for awhile. Different ideas from the different schools may all contribute different ideas. I think MMT may see some success in the coming years on the way to correctly understand the budget-the importance of deficit spending.

           Maybe-for arguments sake-thanks to Sumner in coming years economists will come to see NGDP to be more important than GDP.

           Then you have the more empirical work of many of the younger economists-they basically just put aside the endless theoretical wars and simply seek to observe economics empirically. Meanwhile maybe Noah Smith will become a prototype of the economist in future years where they will have more of a foundation in Physics. Recall Unlearning's point that many students have no knowledge of anything outside their specialty in econ today.

            At some point in the future a new consensus in economics might form. It won't be as earth shattering as Keynes writing GT or Lucas in the 70s. It will likely be evolutionary rather than revolutionary and not be driven solely by just one person or idea.