![]() ![]() Several authors offer their criticism of the way some economists make their contributions, namely what Klein calls “paradigmaticism”: overemphasis on “formal model-building” and “empirical work according to favored quantitative methods.” The attempt to mathematicize economics has a heavy cost that Ronald Coase points out: “Aspects of the economic system which are difficult to measure tend to be neglected.” This explains the lack of attention to property rights and entrepreneurship in economic textbooks. His counterargument shows that this approach suffers from the impossibility of calculating the necessary probabilities and misses the main point that the quality of an idea is what matters most, not whether it is currently “realistic.” The gist of the approach is to rank proposals according to their probabilities of effecting change. He constructs the “probability approach” that he supposes would be employed by the scholar who would offer “realistic” advice. People, including economists, make errors, and economists make valuable contributions when they correct them.Ĭlarence Philbrook responds to criticism that what some economists contribute is unrealistic thinking. Kirzner responds: “it is just not the case that economics teaches the worthlessness of economic policy advice.” The problem with Stigler’s view, according to Kirzner, is that it fails to recognize error and its correction. Stigler rejects the notion that societies would adopt bad policies without heeding the advice of economists and uses economic principles to support his claim. If what economists have to contribute is so good, why don’t more people tune in? Israel Kirzner grapples with George Stigler’s claim that economic advice is not valuable. Hayek, in the essay reprinted here, urges economists not to “directly aim at immediate success and public influence.” Seek “light,” he recommends, not “fruits.” In this way the economist maintains intellectual integrity and lessens the likelihood that economic insights will be misapplied. The problem is not that economists lack clout, but that some seek to maximize their influence by stooping to promote special interests. Observe how free trade has mutated into “managed trade.” ![]() Sound economic principles, moreover, may be misapplied. Economists who warned against wage and price controls in the 1970s could not convince the public to shun them. ![]() Even when the advice of economists is good, the public will not necessarily take it. Those who denigrated saving, for example, contributed to a lower standard of living today. Economists can be and often have been flat out wrong. Klein asks: “Are economists today, in making their individual choices, led to promote ends of human betterment?” He begins by playing the devil’s advocate and gives several reasons why the contributions of economists might not lead to human betterment. All three groups, especially undergraduates contemplating graduate study in economics, will be fascinated and perhaps troubled by what they read. Although the title implies that the book is directed to students and intelligent laymen who would otherwise not know the answer, the book is aimed just as much at professional economists themselves. In What Do Economists Contribute? he and nine other economists (most of them known to readers of Ideas on Liberty) try to explain just how economists contribute to the betterment of mankind. Professor Daniel Klein of Santa Clara University is one of the most engaging and creative economists around. ![]()
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