An interview with Amartya Sen:
I think a lot of economists were deeply impressed by the elegance of their models. These models describe an imagined economy where the markets functioned perfectly. In such an environment, the market achieves very good results and does not need any kind of state intervention. That’s a very elegant model. It was something which Adam Smith did discuss, but he discussed it along with all the limitations that must be borne in mind. Other early economists who used simplified models of this kind also stressed the importance of noting that the world isn’t anything like that. Edgeworth did that, Walras did that, Wicksell did that. Many modern economists take their simplified models too seriously.
In which ways do you think new economic thinking is necessary and how should it look like?
I think we need a bigger, more integrated view that economists tended to look for, in the past. We have to see the totality of the concerns that make human beings want a good economy. The kind of economic thinking that I would like to see pays a lot more attention to issues of human freedom. What I have in mind is real freedom, not just formal liberties but also what kind of lives people manage to achieve, what they can do with their lives, and what help of the state they need for more substantive freedom. The basic question economists should ask themselves is: What can we do to have a decent society where people get much more freedom to live the kind of lives of which they would have reason to be proud and happy.
You make a lot of references to old economic thinkers like Smith, Keynes and so on. However, if you look at the current economic research that is published in the journals and taught at universities, the history of economic thought does not play a big role anymore…
Yes, absolutely. The history of economic thought has been woefully neglected by the profession in the last decades. This has been one of the major mistakes of the profession. One of the earliest reminders that we are going in the wrong direction has come from Kenneth Arrow about 30 years ago when he said: These days, I get surprised when I find the students don’t seem to know any economics that was written 25 or 30 years ago.
Is there any hope that this trend can be reversed?
Yes, I’m quite optimistic in this regard. I get the impression that this seems to be getting corrected right now. I’m particularly delighted that the corrective has come to a great extent from student interest. I’m very struck by the fact that at the university where I teach – Harvard – the demand for more history of economic thought has mostly come from students. As a result there is a lot more attempt by the department of economics as well as history and government to look for the history of political economy. Last year, along with my wife Emma Rothschild, I offered a course on Adam Smith’s philosophy and political economy. It drew a lot of interest and we got some of the finest students at Harvard.
“I think we need a bigger, more integrated view that economists tended to look for, in the past. We have to see the totality of the concerns that make human beings want a good economy”
We do need a bigger, more integrated view, but perhaps not exactly the way Amartya Sen meant it. See: Which is more important to our lives: Meteorology or economics?
The view should be an integration of all the factors affecting our economy — a view possible only with a supercomputer.
Rodger Malcolm Mitchell
[...] Mark Thoma, Kasey Dufresne, writing at the Open Economics blog, alerted us to an interesting interview that we missed–an interview that is sure to be a good [...]
I haven’t understood Sen’s work fully, though the magnitude of it has impressed me, based on what I gathered from The Idea of Justice and Hilary Putnam’s exposition of Sen’s efforts in The Collapse of the Fact/Value Dichotomy.
But whereas I can sympathize emotively with what he says here, I cannot envision a practical realization of his dream of a large, expansive economics field.
My concern with this dream rests largely on the Duhem-Quine Thesis, underdetermination, and the very crude concept of the narrative fallacy.
Begin with his proposal: ” The basic question economists should ask themselves is: What can we do to have a decent society where people get much more freedom to live the kind of lives of which they would have reason to be proud and happy. ”
Any response to this question requires effectively infinite auxiliary hypotheses, definitions, and assumptions, that will, in the end, be inevitably falsified as a group. We will then have to make ad hoc choices about which to retain and which to discard, just as we have to today, but on an even larger scale.
What is “decent”? What is “much more freedom”? What does it mean to be “proud and happy”?
To answer these questions, we must understand these concepts. To understand these concepts we need to conduct endless studies in order to capture their referents.
Then we need to formulate statements that describe the processes through which we can achieve the objective he has set out (after having verified, of course, that this objective is sensible).
And I intuitively think that given the volume of statements that we need to make in order to answer his question, underdetermination will become an even bigger problem than it already is in economics.
Ultimately, we will have only narratives and metaphors. I don’t claim that we have more than that now. But the effort towards positive economics, even if it is itself an impossible dream as Hilary Putnam has shown, has at the very least reduced the amount of statements we need to make to describe economic phenomena.
Won’t happen. Economics is an arm of the marketing business, not a science.
Can you imagine a physicist who didn’t understand Kepler and Newton?
Actually I suspect many physicists would have some difficulty understanding what Newton wrote, in Newton’s own words. We use a more modern formulation of his ideas. I suspect that very few modern physicists have read Newton in the original. Probably a much smaller fraction than the fraction of
economists who have read Keynes in the original. In three years of graduate education in economics, we were assigned to read Keynes in the original; in getting a Ph. D. in physics, we were not required to read Newton. Few quantum
physicists read the original papers on quantum theory (which are available in English translations), either, though probably more than read Newton.
As for economics being a branch of marketing, I don’t think so, not at major universities, at least. (Although I’m not as plugged into academic economics as I was when studying it!) I do suspect there are aspects that are —partly— a branch of political propaganda, though. (Or was that what you meant by marketing?)
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