Daniel W. Drezner

Sweet Jesus, who let Alan Wolfe review economics books?

I’m not Alan Wolfe’s biggest fan.  His public intellectual forays into international relations have not displayed all that much erudition.  That’s nothing, however, compared to Wolfe’s TNR review essay of behavioral economics.  Here’s the first paragraph, in which Wolfe wins the 2008 Straw Man award for Blinkered Punditry:  When I first began hearing about what ...

I’m not Alan Wolfe’s biggest fan.  His public intellectual forays into international relations have not displayed all that much erudition.  That’s nothing, however, compared to Wolfe’s TNR review essay of behavioral economics.  Here’s the first paragraph, in which Wolfe wins the 2008 Straw Man award for Blinkered Punditry: 

When I first began hearing about what Bruno S. Frey, professor of economics at the University of Zurich, calls the “revolution” in his discipline, my reaction was one of delight. As far as I was concerned, it could not happen fast enough. Neoclassical economists had insisted upon the primacy of self- interest only in order to model human behavior, but the way rational choice theory developed (at the University of Chicago in particular) suggested that self-interest was not just a fact for these thinkers, but also an ideal: not just how people do act but also how they should act. Their relentless advocacy of market-based public policies was finally ideological–and, by my lights, ideologically wrong. Also the jargon grew impenetrable, and the mathematics ostentatious and obnoxious. When Chicago-style economists started to apply their methods to other social science disciplines, and then to virtually all the perplexities of human life, the charge of academic imperialism could be added. Friedrich August von Hayek and Milton Friedman had always seemed to me to be marginal and somewhat bizarre thinkers, especially when compared to such intellectual titans as John Maynard Keynes and Joseph Schumpeter. The rapid spread of their ideas throughout so much of academia did not bode well for the future.

Lord knows one could use a lot of adjectives to characterize von Hayek and Friedman, and not all of them would be complementary.  “Marginal” and “bizarre” are not ones that immediately come to mind.  We can chalk this up to some public intellectuals’ fear of the social sciences (even if they are social scientists) and move on.  Then we get to this paragraph: 

What [Daniel] Kahneman and [Amos] Tversky began and [Richard] Thaler solidified is now frequently called behavioral economics. Its leading figures continue to sparkle. Steven D. Levitt, the co-author of Freakonomics, writes decent prose–or at least is willing to work with a journalist who does; and he, too, teaches at Chicago. The topics that behavioral economists address range far and wide, and often have little to do with the realm of getting and spending. They are interesting, intriguing, and sometimes too cute: raising children, deterring crime, gambling, choosing names. The public-policy implications associated with this way of thinking are anything but predictably right-wing, and in the person of Austan Goolsbee, another economist at Chicago who is also Barack Obama’s chief economic adviser, they now figure prominently in American politics. 

Now I’m no economist, but I have read Freakonomics, and I’m pretty sure Levitt is not a behavioralist.  The overarching theme of Levitt and Dubner’s book is “people respond to incentives.”  That’s pretty consistent with rational choice approaches.

Don’t take my word fo it, however — take Steven Levitt’s

I am not a huge fan of what people call “behavioral economics,” which is a subfield of economics that expands the standard economic models to incorporate systematic biases in the way humans act. I’ve written about some of my concerns elsewhere, so I won’t reiterate them here. I don’t deny that the insights that emerge from behavioral economics can be important, it just seems that most often they are not — especially when subjected to the discipline of the market.

Whoever assigns and edits Alan Wolfe at The New Republic should really be taken out to the back of the woodshed today. 

 Twitter: @dandrezner

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