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The Soulful Science: WhatEconomists Really do and Why itMattersJack Reardon aa Hamline University , St. Pauls, MNPublished online: 29 Sep 2009.
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The Soulful Science: What Economists Really do and Why it Matters. By
Diane Coyle, Princeton, New Jersey: Princeton University Press, 2007, 279
pp., ISBN 100691125139, $27.95 hardcover.
I want to persuade you that economics gets an unfairly bad press, writes
Diane Coyle in the opening sentence of her new book, The Soulful Science.
Economics is now entering a new golden age, no longer characterized by
the rigid and unrealistic assumptions of the past. New advances along the
frontiers of economics, new databases and research techniques bear
comparison with other epochs of discovery in other sciences (p. 232). The
objective of this book is to refurbish, revise and update the negative image of
Coyle, a former economics editor of the London Independent and currently
visiting professor at the University of Manchester, writes enthusiastically for
social scientists, policy researchers and the general reader interested in
learning what we economists are up to these days (p. 4). Public
understanding is important for, unless noneconomists appreciate the vital
role of the economic way of thought, we will see increasingly bad, even
dangerous, policies (p. 3).
The Soulful Science is divided into three sections. The first discusses
economic development, a fundamental concern of economics since Adam
Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations.
New data sets facilitated by ever-cheaper computer power and more
powerful econometric techniques are leading to growth theories that,
according to Coyle will one day make poverty history (p. 95). The second
part discusses the new microeconomics research that has adopted more
realistic assumptions of bounded rationality, non-identical agents, imperfect
information, spillovers and increasing returns, in order to make economics
more realistic without denting its analytical strength (p. 127). The third unit
combines the new macro and microeconomics to discuss how individuals
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Review of Social Economy
ISSN 0034-6764 print/ISSN 1470-1162 online
interact with each other and the links between economics and social
organization, a key determinant of economic development.
It isnt often that economics is referred to as the soulful science and the
catchy title will no doubt attract many readers. Unfortunately, this book
focuses exclusively on the activities of mainstream economists while ignoring
the prolific contributions of heterodox economists. While the general reader
might be impressed with recent advances of mainstream economics, the
heterodox reader will be amused by the newfound importance of institutions,
history, entrepreneurs, innovation, spillovers and social capital, long
acknowledged as rudimentary by heterodoxy.
Unfortunately, these new findings are molded to comport with
mainstream neoclassical ideology. For example, institutions are narrowly
understood as constraining individual behavior and coordinating individual
outcomes rather than more holistically as determining not only which
interests will flourish, but also which values will thrive (Vatn 2005: 222).
While mainstream economists attempt to construct institutions that expedite
competitive market outcomes, heterodox economists and other social
scientists strive to create institutions to enable all people to attain a better
life. Noticeably absent from this book is research on the use of power,
underscoring its peripheral concern to mainstream economics. By ignoring
the distribution of power and its effects, mainstream economics presents a
carte blanche to vested interests to further their values. No wonder the public
frets that mainstream economics is right wing (p. 238).
Coyle utilizes the mainstream way of thinking, which includes belief in
the core concepts of rational choice and equilibrium, as well as applying the
scientific method to the study of human behavior, as a litmus test to
distinguish sharply between economists and others who might even call
themselves economists but dabble in politics, history, politics and sociology.
And if these are limitations, so be it: every subject has core restrictions in its
methodology, which in fact represent its strengths and distinctive insights
Thus, John Kenneth Galbraith is not one of us, even though he
delivered a presidential address to the American Economic Association and
wrote books on important economic issues that resonate with the general
reader. And neither are Adam Smith, our subjects spiritual elder (p. 4),
David Ricardo, John Stuart Mill and other classical economists. Coyle
informs her readers, economics isnt defined by its subject matter but by its
way of thinking (p. 232), a statement that is not accepted by heterodoxy.
Unfortunately, whatever progress mainstream economics has made at the
frontiers of economic research has not penetrated mainstream pedagogy, as
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Coyle acknowledges, the simplest version of the standard paradigm [forms]
the introduction to the subject (p. 249). Nevertheless, she is sanguine that
were not too far away from a core curriculum in economics which reflects
[these] advances (p. 251). Coyle, however, offers no constructive solution
other than we economists have to teach what we preach (p. 250).
But teaching what we preach is the problem. Should we worry that
students of economics are more likely than other students to act on the basis
of self-interest alone? (p. 132). Should we worry that if and when the new
research is presented to students it will be icing on a perfectly lovely cake?
(p. 249). Regrettably, by the time students are a couple of years into their
studies, the questions of rationality and whether a simple model can capture
messy reality are forgotten. Those students that remain troubled by them
have quit the field; those that remain are socialized and no longer ask about
such things (John Sutton, quoted on p. 249).
In addition, the book suffers from several non-sequiturs that will vex the
general reader. Coyle acknowledges the sloppy use of data and poor-
quality regressions (p. 244) yet frequently buttresses her assertions with
regression results without discriminating among them. She refers to the
dysfunctionality of journal publishing and the extraordinary dominance
of leading mainstream journals, yet liberally quotes from them while
ignoring, for the most part, the burgeoning heterodox journals. She exhorts
that faster growth in GDP remains a good target for economic policy
(p. 109), yet ignores the nexus between faster growth and global warming,
which will invidiously affect poor countries, the very group that the new
economics is trying to help. She acknowledges that economics is an
extraordinary male-dominated subject which skews the choice of research
carried out by economists, (p. 250) yet sprinkles the word macho through-
out her writing: the macho mathematics of complexity theory (p. 201); the
math underlying rational expectations during the 1980s appealed to the
macho element (p. 230); and the vast and ever-growing critique of
economics, much of which Ive masochistically read and filed away (p. 234).
Coyle cedes little ground to the plethora of critics of mainstream
economics both within and outside the profession since they attack a
caricature of economics, for reasons related to their personal ideological
beliefs. [In addition] many are unaware of the content of economic research
during the past twenty years (p. 232). At the same time, Coyle does injustice
to the general reader by failing to acknowledge the underlying ideology of
mainstream economics and to understand the crux of the heterodox criticism,
which attacks the very core concepts cherished by mainstream along with its
anti-pluralist efforts to proselytize rather than educate.
I do not recommend this book to the non-economist since it gives a
distorted and incomplete picture of what economists do. Nevertheless,
mainstream economists should read this book, at the very least to learn the
palpable disconnect between their research and ossified pedagogy.
Alfred Marshall (1946) wrote in the preface to his Principles of Economics,
Economic conditions are constantly changing, and each generation looks at
its own problems in its own way. Indeed, solving global warming and other
environmental problems of our generation will tax our ingenuity, requiring
the creation of institutions not seen before that match the problems we
face (Vatn 2005: 434). Perhaps this is wishful thinking, but any efficacious
solution will require outreach among all disciplines of economics and across
the social sciences, rather than contemptuous dismissal of any discipline that
does not meet an ideological litmus test. And perhaps this is wishful thinking,
but a book explaining to the public what all economists do and how all
economists and social scientists with different research methodologies can
solve our generations problems, needs to be written.
Hamline University, St. Pauls, MN
2009 Jack Reardon
Marshall, A. (1946) Principles of Economics, London: Macmillan.
Vatn, A. (2005) Institutions and the Environment, Cheltenham, UK: Edward Elgar.
Empirical Post Keynesian Economics: Looking at the Real World. Edited by
Richard P.F. Holt and Steven Pressman, Armonk, NY: M.E. Sharpe, 2007,
352 pp., ISBN-10: 0-7656-1328-X, ISBN-13: 978-0-7656-1329-5, $32.95
(paper); $89.95 (hardcover).
The post-Keynesian research project provides an alternative to the
neoclassical synthesis. The driving force for post-Keynesians has been to
question the tacit ideas within mainstream economics and strive to
honestly view the real world. This motivation provides an appealing
inception. A solid post-Keynesian paradigm, however, requires justification
and verification. For the economics profession, this means empirical analysis;
this book is such an attempt. From the introduction to the volume:
Empirical analysis is important because it is only through empirical work
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