Where Should We Put Economic Empiricism on the Hubris-Humility Spectrum?

by Peter Dorman (originally published at Econospeak)

Where Should We Put Economic Empiricism on the Hubris-Humility Spectrum?
A bit of a kerfuffle has broken out over the claim that, as economics gets more empirical, it also gets more reliable. Russ Roberts says that, in the name of empiricism, economists are trotting out contested results to adjudicate questions that are vastly more complicated than their methods can allow for, and that they should acquire a bit more humility instead. Balderdash, says Noah Smith: whatever lack of humility is evinced by researchers who jump the gun in empirical work is swept away by the tsunami of hubris issuing from those who have only vague, unsubstantiated assumptions about how the world “really” works. Cowen rebuts, arguing that motivated, hubristic reasoning can seize on empiricism just as readily as any other academic raw material. Smith retorts, going halfway to meet Cowen, but expressing optimism that empirical methods carry their own antibody against motivated bs and will pull knowledge in a more realistic direction over time.

So what do I say? (I thought you’d never ask.) First, Roberts is simply recycling, for a forgetful age, the now-ancient claim of Hayek regarding the Fatal Conceit. I agree that it is desirable to not be Fatally Conceited, although it is widely recognized, I think, that, as he drew it, Hayek’s circle of unknowability is both too wide (not respecting degrees of evidence) and too narrow (sweeping assumptions about market process). Roberts can challenge me on this if he wants, but I see Fatal Conceit-ism in just about every paragraph of his post.

Meanwhile, I think really empirical economics would place intrinsic barriers to hubris and ideological cherry-picking, since its methods would be inherently self-critical. For instance, cataloging all plausible explanations for a possible relationship between X and Y and identifying potential markers for them in the evidence, as I suggest here, would be a prophylactic against overconfident “empirical” claims about a researcher’s favored theory. Similarly, serious attention to issues of proxy measurement would give pause to those eager to read in a sweeping interpretation of what is often just indirect evidence. I have also expressed concern over methods that are based on the assumptions that impose a priori uniformities on the economic relationships one tries to estimate.

So my position is that Roberts and Cowen are more right, and Smith less, than I would like, mainly because what passes for empiricism in economics at present is often deficient in an empiricist, self-critical spirit and methodology. At the same time, the debates over topics like the minimum wage, the effects of charter schools on educational outcomes and the like are on a vastly higher plane when they are about data sets and analytical assumptions than the certitude of my unquestioned beliefs against the certitude of yours. It’s also a cheap and not altogether forthcoming dodge to respond to econometric disputes with a flip “There is never a clean empirical test that ultimately settles these issues.” (Roberts) That’s a Merchants of Doubt epistemology.

by Peter Dorman

Comments (5) | |