Levinovitz likens modern-day macroeconomics to mathematical astrology in the early Chinese empire. And in fact, the parallel sounds pretty accurate. The article is worth reading just to learn about classical Chinese astrology, actually.
But anyway, Levinovitz draws heavily on the econ disses of Paul Romer:
‘I’ve come to the position that there should be a stronger bias against the use of math,’ Romer explained to me. ‘If somebody came and said: “Look, I have this Earth-changing insight about economics, but the only way I can express it is by making use of the quirks of the Latin language”, we’d say go to hell, unless they could convince us it was really essential. The burden of proof is on them.’
…and Paul Pfleiderer:
Pfleiderer called attention to the prevalence of ‘chameleons’ – economic models ‘with dubious connections to the real world’…Like Romer, Pfleiderer wants economists to be transparent about this sleight of hand. ‘Modelling,’ he told me, ‘is now elevated to the point where things have validity just because you can come up with a model.’
He also rightly (in my opinion) identifies Robert Lucas as a key figure in the turn away from empiricism in macro:
Lucas’s veneration of mathematics leads him to adopt a method that can only be described as a subversion of empirical science:
“The construction of theoretical models is our way to bring order to the way we think about the world, but the process necessarily involves ignoring some evidence or alternative theories – setting them aside. That can be hard to do – facts are facts – and sometimes my unconscious mind carries out the abstraction for me: I simply fail to see some of the data or some alternative theory.”
A lot of what Levinovitz is writing is just a synthesis of things that smart economists have been complaining about in private for decades, and in public since the 2008 crisis. I think econ needs more critics like this, who are willing and able to go talk to the smart dissidents within the econ mainstream, rather than just accepting at face value the arguments of “heterodox” outsiders due to political affinity (as some econ critics sadly do).
Vir: Noah Smith