Assault on Economists
LEKACHMAN, ROBERT
Assault on Economists The Failure of Economics. By Sidney Schoeffler. Harvard. 254 pp. $4.75. Reviewed by Robert Lekachman Department of Economics, Barnard College THIS book, a vigorous,...
...Some of the subjects Mr...
...One major recommendation is that economists should stop acting like scientists, where their prospects are dim, and start acting like doctors...
...Surely we are better off now than a generation ago because economists agree that when employment contracts, a whole series of monetary and fiscal measures are appropriate: lowered reserve requirements, Federal Reserve purchases of securities, reduced taxation, and increased public spending...
...The answer, we are told, lies in the fact that Keynes and his followers were guilty of artificial simplification...
...Schoeffler makes...
...In each area, the economist wistfully seeks economic, "laws" in the shape of relationships between his variables which are both simple and persistent...
...Shoeffler does not readily forgive...
...Schoeffler's implication that economics has advanced little since the day of John Stuart Mill...
...Addressed primarily to Mr...
...Here the exuberance of his attack has carried Mr...
...a good many economists have been working in just this way to improve their interpretation of consumer behavior...
...We must treat as hyperbole, therefore, Mr...
...The most celebrated contemporary illustration is the Keynesian consumption function, which assumed a simple connection between national income and total consumer spending, such that consumer outlay would always increase by a smaller amount than any increment in national income...
...The theory of consumer demand, the Keynesian explanation of income determination, business-cycle hypotheses, econometric models, the theory of the business firm all of these receive intelligent exposition and short shrift...
...The doctor practices an art...
...Schoeffler ranges through economic theory like an instrument of divine wrath...
...The doctor borrows from the pure scientists...
...The faults of economics include artificial mechanization, artificial simplification, artificial generalization, artificial systematization, artificial fixation, artificial factorization, artificial closure, artificial isolation, and artificial indirectness...
...What is the author's prescription...
...Though they disagree among themselves about the proper combination and exact impact of these measures, they are sure of the direction of that impact...
...Schoeffler's colleagues in the profession, it assumes a good deal of sophistication on the part of its readers...
...Moreover, the record of economics in public policy is good in recent years and promises to improve...
...Who are the analogous pure social scientists...
...In support of this judgment...
...Schoeffler away...
...Reviewed by Robert Lekachman Department of Economics, Barnard College THIS book, a vigorous, trenchant attack on the current state of economic theory, displays only a few labored traces of its origins as a doctoral dissertation...
...Why doesn't the statistical record bear out this "law...
...so should the economist...
...After an assault of such sustained power, it is disappointing to find remedies as weak as this one...
...Every economist knows that personal rivalry, altruism, laziness and neurosis influence the way businessmen act...
...I question strongly this emphasis upon prediction as the sole or even an important criterion of the success of economics...
...This book is no exception to the generalization...
...Methodological studies as a class are stronger in diagnosis than they are in treatment...
...Because economists pursue false gods, they fail miserably as forecasters, a sin which Mr...
...The heart of the complaint is that economists use the wrong kind of tools, partly because they have misled themselves by false analogies to the physical sciences...
...It is a bold assault that Dr...
...They should have investigated the array of psychological and sociological forces which influence consumer spending...
...Even if economists cannot predict the course of the business cycle or the duration of its phases, they measure change after it has occurred much more rapidly than ever before and they know what to do...
...A weaker subject might have died long since of such infirmities...
...But it is sufficiently clear and pointed to be understood by anyone who took sophomore economics in college or dabbled in the subject less formally...
...In treating his patient the economy the economist "should get to know the results of social psychology, sociology, jurisprudence, technology, demography, geology, and other disciplines relevant to his tasks...
...In committing these faults, economists "assume the heterogeneous to be homogeneous, the complex to be simple, the variable to be fixed, the open to be closed, the connected to be isolated, and the indeterminate to be determinate...
...Much economic theory is heuristic in intention, designed to reduce a confusing world to comprehensible terms...
...Schoeffler recommends are in worse shape, by any criterion, than economics...
...but the urge for profit is still our best single assumption...
Vol. 39 • April 1956 • No. 14
