“I agree with everything you say”

Which is a direct quote from Deirdre McCloskey at the end of my presentation this morning. So let me return the compliment. In her presentation to the plenary which came immediately after my parallel session, I agreed with everything she said. So let me summarise some of what she said in point form:

  •  text books spend half a lesson explaining supply and demand and then go on about “externalities” as if they actually amount to anything significant at all
  • economics now has all the relevance for understanding the economy as chess problems have for understanding how to play chess
  • there is no such thing as a physical externality; they are all moral
  • we over teach econometrics and should instead focus on other means of measurement of what is going on

She held the floor for an hour and the chair at the end wished an extra hour had been put aside. One of the great economic superstars. I say again that HET is where most of the interesting action in economic theory is.

Meanwhile off to dinner. Great to be back in Toronto even if only for the moment.

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15 Responses to “I agree with everything you say”

  1. Guy

    HET = History of economic thought (I think)

  2. notaluvvie

    T’ronta? Be careful, it’s a very dangerous city as presented each week by that documentary series on 7-2 showing how the detective solves the most hideous of crimes and invents sonar, radar, flying and everything except the internet, although he did use I-mail in one ep. The internet of course belongs to Al en-Gorge.

  3. Rafe

    Did you get to talk about cricket her other great interest?

  4. Elizabeth (Lizzie) Beare

    It’s a rare thing, Steve, to be at an academic conference and feel among friends. Enjoy.

  5. dopey

    Is Gordon Lightfoot still playing?

  6. Ray

    Econometrics is the study of mathematical methods used in describing economic systems. If we are going to “focus on other means of measurement of what is going on” that would entail other mathematical methods for describing economic systems, which is, believe it or not, econometrics.

    So it is ludicrous to state that econometrics is over taught. You might have more traction if you argued that the methodologies used in econometrics are inadequate but that would justify more time in studying the discipline so that we can get it right.

  7. Ray

    I just pulled out the course guide for my last semester of microeconomics. The subject matter included consumer preferences, consumer choice, choice under risk, producer theory, market institutions and auctions, general equilibrium, welfare, game theory, imperfect competition, adverse selection, public goods and public choice.

    It was a little while ago but I would anticipate externalities would have warranted a mention or two under welfare and public goods, but these would have been very minor elements of the course. It is simply not true to suggest that modern micro is dominated by discussions of externalities.

  8. Ray

    As for moral versus physical externalities, just ask the people of Paris whether there is a physical cost to the large numbers of “refugees” plaguing the city today.

  9. Entropy

    That is deliberate government intervention in the operation of a national market there Ray. Intervention which for some mysterious reason is deemed to resolve, rather than create externalities.

  10. .

    I agree. Econometrics is under-taught. You can never be numerate enough.

  11. Entropy

    Hemorrhoid Energy Therapy using the HET™ bipolar system is an efficient procedure with minimal pain to the patient.

    One of the problems of senior years, eh?

  12. Ray

    Entropy, an externality is a cost or benefit imposed on an individual who did not choose that cost or benefit.

    In the case of Paris, it does not matter whether immigration was a direct government policy or not, for the many Parisians who did not agree to have their city destroyed, this is most certainly an externality.

  13. Craig Gent

    What all the whinging about externalities ignores (in fact pretty much all criticisms of free market capitalism) is that every criticism applies far more significantly for government. Monopolies, price collusion, externalising . The government has and continues to do such things far worse than any ‘greedy’ capitalist.

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