Do Economists Really Not Know These Things?

There’s an NY Times article, “What if Sociologists Had as Much Influence as Economists?“, that completely perplexes me. Neil Irwin writes (boldface mine):

But as much as we love economics here — this column is named Economic View, after all — there just may be a downside to this one academic discipline having such primacy in shaping public policy…

Sociologists spend their careers trying to understand how societies work. And some of the most pressing problems in big chunks of the United States may show up in economic data as low employment levels and stagnant wages but are also evident in elevated rates of depression, drug addiction and premature death. In other words, economics is only a piece of a broader, societal problem. So maybe the people who study just that could be worth listening to…

For starters, while economists tend to view a job as a straightforward exchange of labor for money, a wide body of sociological research shows how tied up work is with a sense of purpose and identity.

“Wages are very important because of course they help people live and provide for their families,” said Herbert Gans, an emeritus professor of sociology at Columbia. “But what social values can do is say that unemployment isn’t just losing wages, it’s losing dignity and self-respect and a feeling of usefulness and all the things that make human beings happy and able to function.”

That seems to be doubly true in the United States. For example, Ofer Sharone, a sociologist at the University of Massachusetts, Amherst, studied unemployed white-collar workers and found that in the United States, his subjects viewed their ability to land a job as a personal reflection of their self-worth rather than as an arbitrary matter. They therefore took rejection hard, blaming themselves and in many cases giving up looking for work. In contrast, in Israel similar unemployed workers viewed getting a job as more like winning a lottery, and were less discouraged by rejection.

It seems plausible that this helps explain why so many Americans who lost jobs in the 2008 recession have never returned to the labor force despite an improved job market. Mr. Sharone is working with career counselors to explore how to put this finding to work to help the long-term unemployed.

Jennifer M. Silva of Bucknell University has in recent years studied young working-class adults and found a profound sense of economic insecurity in which the traditional markers of reaching adulthood — buying a house, marrying, landing a steady job — feel out of reach.

Put those lessons together, and you may think that the economic nostalgia that fueled Donald J. Trump’s presidential campaign was not so much about the loss of income from vanishing manufacturing jobs. Rather, it may be that the industrial economy offered blue-collar men a sense of identity and purpose that the modern service economy doesn’t.

Sociology also offers important lessons about poverty that economics alone does not. “Evicted,” a much-heralded book by the Harvard sociologist Matthew Desmond, shows how the ever-present risk of losing a home breeds an insecurity and despondency among poor Americans.

It works against the tendency to think about housing policy as solely a matter of which subsidy goes to whom and what incentives ought to be in place to encourage banks to lend in poor neighborhoods. All that stuff is important, of course, but doesn’t really address the overwhelming challenge of insecurity that affects millions of people.

How does anyone in the U.S. not know that the “ability to land a job as a personal reflection of their self-worth rather than as an arbitrary matter” is a commonly held notion?

I have no idea if this is an accurate assessment of how economists think–and to the extent economists do read my shitty blog, they are probably left-leaning–but if it’s even close, then economics, as many of the heterodox critics charge, really is divorced from basic reality.

Or maybe it’s just very incomplete sociology?

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11 Responses to Do Economists Really Not Know These Things?

  1. anthrosciguy says:

    I don’t know whether it’s cause or one of the effects, but the rise of the MBA and MBA culture is mixed up in this. People become numbers, cause otherwise it’s really hard to do math on behavior. And accurate numbers on all aspects of behavior is difficult at best, and impossible when you don’t even study much of the behavior. So for the sake of making their job easier, they jettison most of the numbers they could use, and don’t bother even looking for the numbers they should use.

    Having looked at sociology from the vantage point of anthropology, sociology often gets all reducto because of this problem, and Econ just cuts it down further. A lot further.

    • Yeah I was going to point out the rise of HR… but really if you follow the chain up, it leads to MBA.

      And of course the whole purpose of corporations existing was to provide goods & services to people… and employ people in doing so. But now it’s all about the shareholders or the owners, and profit… things that were supposed to be secondary to, you know, actually selling something that’s worth something to the people.

  2. John Magoun says:

    I think this is an important issue – for some economists. I’m thinking of the ones who work at the societal level, devising models for national employment vs. money supply, etc. But aren’t there a lot of economists whose work doesn’t really intersect much with sociology, who do grunt work on sales for a market segment or try to tease out whether a different bank rate or a stronger dollar will lower imports in the forestry sector?
    Deciding that “how economists think” leaves them “divorced from basic reality” is kind of a general statement. It would seem to be as useful as “Those who can’t do, teach; those who can’t teach, teach at Ed. Schools” is in analyzing the problems of the nation’s schools.
    I thought Irwin’s point is that economists have too much “primacy in shaping public policy”. He seems to be advocating for sociologists to have more staff positions in the Executive branch and in Congressional offices. But I wonder if the problem Irwin is probing isn’t actually that our elected and unelected leaders, drawn from the post-industrial educated elite class (primarily still lawyers, though; not economists) have increasingly divorced themselves from yet another entire class of Americans — but this one has proved to have more residual voting power than the others.

  3. Clark says:

    Posit a spherical wage earner…

  4. David says:

    These basic ideas are in Dickens, “Hard Times.”

  5. jrkrideau says:

    Well, certainly not all economists but a lot yes. Certainly a lot of the ‘fresh water’ school seem to have a very tenuous grasp of reality.
    economics, as many of the heterodox critics charge, really is divorced from basic reality
    Extremely in some cases. I had a university economics professor assure me that a monopoly situation was the best setting for innovation just as Bill Gates and Steve Jobs were kicking IBM all around the room.

    And have a look at utility theory.

    They even have a fairly tale about how money developed that the anthropologists say has never been seen in the wild.

    Some economic tools and concepts are incredibly useful but a lot of the profession seem relatively devoiced from reality.

    • sglover says:

      Extremely in some cases. I had a university economics professor assure me that a monopoly situation was the best setting for innovation

      Well….. Bell Labs? IBM’s labs? Xerox PARC — from which Jobs swiped the notion of the graphical user interface? Pretty good arguments for the kind of innovation that can happen when it’s underwritten by deep pockets.

  6. I suspect the explanation is physics envy.

    Modern physics explains physical phenomena in abstract, mathematical terms. It’s a great intellectual achievement. And it’s meaningless to ask how individual electrons feel about the equations of quantum mechanics.

    Academic economists would like to replicate this success, but are held back by the fact that people are not electrons. Some recognise this and attempt to deal with it, but a significant faction is in denial that messy human feelings have any place in their studies.

  7. RJ says:

    Both the left-leaning and right-leaning economists, with few exceptions, have never experienced deprivation. In general, they also have experienced, and hang out only with people who have experienced, jobs that allow them to do something they find interesting and fulfilling, unlike most people.

    It’s true that people are less self-directed and rational than we usually think. But economists in their education are disproportionately exposed to literature pointing in this direction. Thus the Fire Chief is self-deluded when the job gives him that feeling of accomplishment – he ‘really’ only is happy because he is earning more money.

    Class and social circles, as usual.

  8. Not only do a lot of people know that “ability to land a job as a personal reflection of their self-worth rather than as an arbitrary matter” is a commonly held notion”… many believe it SHOULD be the case. In fact, that’s a sentiment I hear often.

    I read this article in the New Yorker about Bob Mercer. He is reported to think that a human’s worth is based on how much money they have. (Also btw, that Mercer guy is the WORST “cat lover” EVER.)

    It’s illogical, but for some reason people really like to buy into it without even thinking about the immorality of their suggestions. Some don’t care of course and are actually immoral probably, but I think most people don’t think things through about the immorality they’re pushing.

    And there’s a big chicken & egg thing going on there too.

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