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Source link: http://archive.mises.org/12333/dear-department-chairman/

Dear Department Chairman

March 30, 2010 by

In all the formal economic study I have sat through, I have developed a growing concern for the direction of the economics profession in general, and economic education in particular. FULL ARTICLE by Sterling T. Terrell

{ 15 comments }

Aubrey Herbert March 30, 2010 at 7:11 am

“Then you may boast that you are the only school in the nation that offers any formal study of such economics based in deduction.[2]”

Somehow I don’t think they’d find that appealing… lol.

“The discovery of knowledge is the literal foundation of the academic process, and dogmatically relegating one form of inquiry to obscurity is not only a bit academically dishonest — it’s wrong.”

Good way to end it. A great piece overall – the Young Americans for Liberty should make good use of this!?

Jeffrey Herbener March 30, 2010 at 7:40 am

Grove City College has been on the list of colleges teaching Misesian economics for over 50 years. J. Howard Pew, who was at the time chairman of the board of GCC, so admired Ludwig von Mises’s work that he hired Mises’s student, Hans Sennholz, in 1956 to head the department of economics at the college. Here is our economics department.

Jack Roberts March 30, 2010 at 8:43 am

Not to mention when they leave the university where they were paying $10000 a year, with a paper saying they have a degree. Only to find out from the internet that there is an entirely other school of thought on Economics. Shocked they may be to find out that there is more to economics than the business cycle.

Daniel Kuehn March 30, 2010 at 9:51 am

1. What do you mean the German School triumphed???? Is that a joke? The German School is long, long dead – and for good reason.

2. I think you’re confusing deductive economics with Austrian deductive economics. All schools teach deductive reasoning in economics. Some add more inductive reasoning to support it than Austrians would like. But there is no economics department in the United States, or probably anywhere, that relies on induction for teaching economics. I get the sense you’re just frustrated that they’re not teaching deduction how you would teach deduction.

Abhinandan Mallick March 30, 2010 at 2:19 pm

“1. What do you mean the German School triumphed???? Is that a joke? The German School is long, long dead – and for good reason.”

There is however an essential equivalence between historicism and economic empiricism. Mises was able to notice this at an early age as he writes in his Memoirs(pg 2-3):

“I was still in high school when I became aware of a contradiction in the position assumed by those in Schmoller’s circle. On the one hand they rejected the positivist demand for scientific law built on a society’s historical experience; on the other hand they were of the opinion that economic theory could be abstracted from a society’s economic experience. It was astonishing to me that this inconsistency was hardly noticed.”

Ivan March 30, 2010 at 10:29 pm

Daniel Kuehn,

“What do you mean the German School triumphed???? Is that a joke? The German School is long, long dead – and for good reason.”

The only real difference between positivism and historicism is that the former believes in universal laws (as opposed to historically and geographically specific social patterns). But their method of inquiry is practically identical–it’s a purely historical approach which looks at the “facts.”

“Some add more inductive reasoning to support it than Austrians would like. But there is no economics department in the United States, or probably anywhere, that relies on induction for teaching economics.”

My intermediary microeconomics professor thought I was insane when I said that relying solely on induction is pure ad hocery. We spent the entire semester going over dynamic production and utility functions, without ever venturing into actual theory, or the implications of the mathematics. I once took issue with the fact that inter-temporal utility functions use purely cardinal measurements of value, and keep preferences constant. She told me not to worry about it, and just learn how to solve the problems.

I refused to take intro to econometrics and mathematical economics with her (the other teachers, though, aren’t much better). But I have her again for Modern economic theory (requirement), and we’ve spent the entire semester learning about game theory, decision trees, optimal stopping problems, ect.

So I don’t really know what you’re talking about.

spepost March 30, 2010 at 10:25 am

I think economics could use more emphasis on the workings of business and politics also…

Mushindo March 30, 2010 at 11:22 am

Im my experience of mainstream academia, the entire macroeconomics curriculum is founded on a single axiom, on which everything else is built.

‘Policy intervention is right and good. The only aspect open for debate is what form the intervention should take’.

As for the nuanced distinction between induction and deduction, I have seen no meaningful attention paid to it. If a particular chain of deductive reasoning supports a desired outcome, it is enthusiastically employed, and when particular empirical results from history do the same, they are likewise pressed into argumentative service.

All of which makes macroeconomics more rhetoric than science.

Predrag March 30, 2010 at 11:26 am

I agree with the author. One of the troubling practices of today’s economists is that they, when their data do not conform to the theory they are using, explain this by saying that the data were “bad”. Another quite frequent method of explaining one’s empirical results is to find some variable (generally unobservable) that was not in the original model and say that this variable might have affected the result. It turns out that the theory is “true” by default but the data failed to conform. The positivist approach of testing the theory loses any meaning in these circumstances. Today’s economists proclaim to use the positivist method but often act as a priorists.
Most graduate students in my department were introduced to Austrian economics for the first time in our Masters Program methodology course. Before that, most of us thought that the only way economics could be practiced was in the form of solving a constrained optimization problem. This was actually the first time I heard an economics professor put different theories in the context of history. Most undergraduate students get the idea that what they are learning now is somehow the peak of knowledge and thus nothing that happened before is relevant. Economics textbooks of today are written as if they are sources of timeless truths. It seems that the only relevant debate is limited to the last 10 years, and that all questions that relate to earlier periods have been settled.

Mike Phenow March 30, 2010 at 1:01 pm
Del Lindley March 30, 2010 at 3:52 pm

It is commonly remarked that the empirical (or inductive) bias in modern economics has been driven by the desire among economists to elevate their status within the academic community. By adopting the demeanor and methods used within the physical sciences these empirical economists can portray themselves as disinterested truth-seekers while borrowing prestige from the deep well of scientific achievement. This consideration may be thought of as the psychological rationale for the data-centric bias of economic study. As a mere conjecture, however, it is does not form a basis from which further analysis can proceed.

A clearer understanding of this bias may be possible through the application of economic theory itself. Here I use “economic theory” loosely in that we must consider the Marxian allocation of resources (“to each according to their need”) that prevails within the academic production structure. Clearly the needs of inductive research will always outweigh the needs of deductive study on a per Ph. D. basis. It is no accident that the funds flowing to a university physics department always exceed those flowing to its mathematics department: inductive studies require more space, more equipment, and more (and more diverse) personnel than purely deductive studies.

The same must be true for data-centric economics. For every empirical economist there must be many data-gatherers and data-reducers. To be efficient these less-specific production factors need the support of the latest equipment (e.g. computational and communications hardware and software) and of course others to support this equipment. All of the seeds required to build an academic “empire of need” are present.

So what might be the response given to a deductive economist in search of greater academic funding? How about: “You’ve got a desk, chair, legal pad, pen, and a coffee-maker—what more could you possibly want?”

Bill Cushman March 30, 2010 at 6:47 pm

I think the truth is that all “cognition” is unconscious. We think it’s conscious, but it’s not. “Reasoning” is just non-contradictory identification of the (physical) conceptual structure which has built up unconsciously in our minds, unbeknownst to us and certainly not under our control, built upon what we have experienced.

We can articulate “axioms” because they are part of a physical structure that has been built up “in the back of the mind” through experience. The really basic axiom is that the Conceptual Structure does not normally make mistakes. The Conceptual Structure processes information.
The creature “reasons”.

Except for his inexplicable admiration of Sigmund Freud, I think Mises is right about everything.
But I think we can actually push Mises’ premises back a step or two, and build on the true nature of concepts such as “action”.

“How we know what we know”: You got my attention right away! Now we’re talking! For what it’s worth, I
offer you “www.shhtract.com”.

Joseph E. Keckeissen March 30, 2010 at 7:18 pm

I suggest that you add the Universidad Francisco Marroquin University in Guatemala
that prides itself in teaching the deductive praxeology of Misesian economics, along with Grove, Hillsdale, NYU, George Mason, etc.
Also, along with deduction, you need a bag of axiomatic premises in order to start the deductive process. Come and visit us inGuatemala. Best, Joe Keckeissen

Mike March 31, 2010 at 6:27 am

Northwood University in Michigan should be included in any list of economic departments emphasizing the Austrian school.

tungsten watches July 23, 2010 at 3:09 am

Not to mention when they leave the university where they were paying $10000 a year, with a paper saying they have a degree. Only to find out from the internet that there is an entirely other school of thought on Economics. Shocked they may be to find out that there is more to economics than the business cycle.
so you most be careful in the after day!good luck to you!

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