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Read: Economics as Religion

Is economics a religion? Are economists secular priests? This is what Robert Nelson tries to convince us of. He fails.

Nelson offers a unique history of modern economic thought or rather thinkers. The focus is on Samuelson and his textbook “Economics.” — the 15th edition, then by Samuelson and Nordhaus, was the textbook assigned to the introductory economics course I took in the nineties. Hence, it often seems that Nelson does not write about the field of economics but only but this, admittingly influential, textbook. Other protagonists, the antipole, are the various members of the Chicago School, most prominently Frank Knight.

The observation that many early economic analyses were based in (unexamined) presuppositions that were more like articles of faith is not enough to convince this reader of economics as religion. The observation that some economist assiduously follow their agenda, may it be driven by intellectual curiosity or political conviction, is not enough to convince this reader that economists are secular priests.

Nevertheless, the links between Catholicism and leftist Progressivism on the on side and Protestantism and more right-wing Libertarianism on the other side and their respective protagonists in economics are interesting. Religion influences, of course, culture, and therefore, it will also influence (economic) thought. Still, the increasing secularization, agnosticism, atheism, non-religiousness, and the move towards scientism does not make economics a religion.

In spite of Nelson’s failure to convince me of economics as religion I agree with him on one major point: Economics, economic analysis is not value free. Economics is often more normative than we like to admit. Those presuppositions need to be examined. Luckily, they are.

Read: Are Markets Moral?

A complete waste of time.

“Are Markets Moral?” is a transcript of a one day inter-disciplinary workshop on the question that is this book’s title.

Presenters regurgitate ideas that they have presented much more eloquently and convincingly earlier, often in other, much longer books of their own, or they speculate about issues, social phenomena that they have absolutely no clue about. The discussions are shallow; the discussants talk at cross-purposes, don’t try to synthesize, or if they respond they resort to cheap attacks, free from empirical facts with the sole purpose to discredit an opposing (and reasonable, evidence-driven) opinion.

The composition of the group of participants is seriously biased. Everyone seems to have (just) their own pet peeve and no genuine interest in answering the workshop’s big question. I pity the poor souls who attended in the hope of gaining new insight.

Much more enjoyable, instructive, and insightful are Daniel Friedman’s “Morals and Markets” and Paul Zak’s “Moral Markets.”

Read: Counterfactuals and Causal Inference

Counterfactuals and Causal Inference is a very practical book that discusses the different approaches to identify causal effects (in non-experimental and experimental data) at a very abstract level. Depending on the reader this may be a good or not so good thing. I had to expend substantial effort to work through the text and I fear that even though I understand directed acyclical graphs I have not developed any intuition in their application that would help me in my applied modelling. Often, the text remains at a too abstract level.

What the text is missing is an even more practical guide with more concrete applied problems and their solutions. Yet, the text is good. It’s not a handbook for a quick how to do it. It’s not a textbook for undergraduates. It’s a critical survey of the state of the art of statistical approaches for the identification of causal effects. It’s a valuable reminder that the regression approach is no magic bullet.

That being said, the text raises the important question of identification and alerted me that some effects that we estimate and report may not be the effects that we would like them to be. I guess I will have to be even more careful when I interpret regressions in the future.

Addendum: I have read the first edition that I had for already some years sitting on my to-read shelf. I just discovered that there is a 2nd, revised edition available.

Read: How not to be wrong

With “How not to be wrong” being about mathematical thinking I was a bit surprised about how much of it was about statistics. And even though it (may) lack(s) the depth of critique of the (ab)use of statistics that can be found in the works of Ziliak and McCloskey or Gigerenzer it is a very good popular treatment of the topic. Worth the read.

A particular additional added value is – in my opinion – the reminder that most things in the real world are not linear. Linearity is just an approximation, valid for only (very) small ranges. I agree with Ellenberg, we – I – forget this too often.

The only thing that I did not like was the sports references (I can condone idiosyncratic tastes in music). The book includes lots of footnotes and endnotes with references. So many, and so many recent ones that I, indeed, found a few new sources that I added to my to-read list. That is rare.

Read: What the best College Teachers do

Based on a sample of effective college / university teachers in the late 1990 Ken Bain tried to identify the specific approach to teaching and characteristics of successful teachers (hence there is no systematic control group). This is not necessarily the professors with the best teaching evaluations but rather those teachers with students who learn, understand, and succeed.

The bad news is: There is no secret trick. It’s not the flipped / inverted class room, it’s not the use of fully animated power points, it’s not the extensive use of videos in class, it’s not overly generous grading practices, and it’s not paying students for their participation in class and doing their assignments.

Still, there was a common trait. It’s their approach to teaching that rather focusses on the who and not on the what. In brief, it’s student centered teaching and the teachers’ attitude towards their students.

I believe smaller classes (and a lower teaching load) facilitate developing this trait, though it is obviously true that also large classes benefit from such an attitude and the resulting approach. I am not quite there yet.

Read: The Calculus of Selfishness

Karl Sigmund’s The Calculus of Selfishness applies basic evolutionary game theory to the analysis of cooperation in strategic interactions. Though it is published in the Princeton Series in Theoretical and Computational Biology it is rather addressed to social scientist, economist and psychologist, and in particular undergraduates.

The Calculus starts simple enough and Sigmund introduces whatever mathematics he needs without being too formal in his approach. For a text in applied math the book reads surprisingly well. However, it is still a book in applied math and I fear it is as such not really appealing to an undergraduate in the social sciences. Indeed, I do not believe there are many undergraduate economics students who would enjoy this book and not put it aside after the first few pages, the first chapter at the latest. While this may be a good example of a text in applied math it is not ”good enough” for the nascent social scientist.

On the other hand, it is an excellent introductory text on the evolutionary game theory of cooperation, direct and indirect reciprocity, fairness, reputation, and trust. I only wished Sigmund would have expanded on structured interaction and the co-evolution of subpopulations. He only hints at what results would be obtained when one would look at these things more carefully.

I also particularly appreciate that each chapter ends with a briefly annotated list of references for further, in more depth, reading on the topic and the game theoretic approach that was introduced in the respective chapter. While the terse exposition of the chapter can only serve to raise one’s interest these references are the real treasure trove of The Calculus of Selfishness.

Hence, while I would not recommend the book to any of my undergraduates in economics or social sciences I would happily point any graduate student in its direction.