Economics vs. Physics Love-Off

By Sean Carroll | December 5, 2006 3:18 pm

Who gets more love, economists or physicists? Robin Hanson stamps his foot in frustration at the lack of respect economists receive, in a nicely self-undermining blurb (via Ezra Klein):

Consider how differently the public treats physics and economics. Physicists can say that this week they think the universe has eleven dimensions, three of which are purple, and two of which are twisted clockwise, and reporters will quote them unskeptically, saying “Isn’t that cool!” But if economists say, as they have for centuries, that a minimum wage raises unemployment, reporters treat them skeptically and feel they need to find a contrary quote to “balance” their story.

As Ezra and Kevin Drum point out, this is straightforwardly wrong on the merits: economists have a huge amount of influence over actual public policy, while admiration for physicists doesn’t get you too much beyond the “Isn’t that cool!” level, and occasional appearances on late-night radio. (It’s like conservatives complaining that most university professors are liberal, while they control the government, corporations, and the military.) Atrios and Echidne also point out that the single chosen example of economic wisdom, that the minimum wage raises unemployment, is wrong. And that physicists have quite the demonstrable track record of making statements about the universe that seem counterintuitive at first glance, but turn out to be right.

In fact, I think these three sentences point to a definite failure on the part of physicists to successfully get their message across. We physicists talk about crazy things all the time — extra dimensions, black holes, quark confinement, wavefunction collapse, conservation of momentum, the Earth moving around the Sun. Things that, on their face, seem to be incompatible with our everyday experience. But we don’t just throw these ideas out there randomly; they are hypotheses that we’re driven to by the constraints put upon us by the data. Some of these ideas may turn out to be wrong, and some may be right, and we have certain well-tested procedures for sorting them out. (In the wake of Milton Friedmann’s death, folks have been re-arguing his contention that successful predictions from an economic model are more important than correct assumptions underlying it. I would hope that both are important.) Unfortunately — and to a signficant extent this is our own fault — it’s not always clear to the person on the street which ideas are speculative and which have come to be accepted, nor is it clear that we have good reasons even for the wildest speculations.

But the idea that three dimensions are purple and two are twisted clockwise — that’s intriguing. I’ll have to look into it.

Update: Robin Hanson expands on what he meant about the minimum wage.

CATEGORIZED UNDER: Academia, Science and Society
  • http://www.amara.com/ Amara

    This is pretty amusing, especially since Robin is also a physicist…..

  • Ken Muldrew

    To the extent the physicists affect policy (such as with greenhouse gasses causing global warming), they get treated in a similar manner to economists. In fact, it is probably due to the reporters’ experience in manipulating comment by economists that they feel free to conflate the opinions of a novelist and a handful of disgruntled geologists with 900 peer reviewed publications by atmospheric physicists.

  • http://theeternaluniverse.blogspot.com/index.html Joseph Smidt

    There was a day when the physics I was most excited about was the 11 dimensional, 31 flavors universe with a magically cherry on top giving us the ADS/CFT picture overall. This would then get us around the fact that supernova measurements seem to suggest the universe is more de Sitter not Anti de Sitter.

    Now I progressively think we would do better sticking to physics based on data that will come out of CERN, the improved CMB measurements, hopefully gravitational waves, etc… I am all about theory and would love for something like String Theory to be the answer, but I think we should spend more time working with theories which are practical for the current latest data.

  • http://www.allysonbeatrice.com/blog Allyson

    I think it’s difficult to make either subject sexy enough for the general public to want to wrap its legs around it. Well, Sagan did it. Hawking is freakish. And when I think of economics I think, “Something O-O Economics. Voodoo Economcs. Anyone? Anyone? Bueller?”

    Seems like a marketing problem no one is really interested in fixing, for whatever reason.

  • http://theeternaluniverse.blogspot.com/index.html Joseph Smidt

    Oh ya, and about the economists. People can still be happy if the universe has purple extra dimensions, but if you tell them they shouldn’t be given more money from their employer they won’t want to listen to you.

  • http://hanson.gmu.edu Robin Hanson

    I agree that economists have more policy influence, though more I suspect because people in government respect us than because of public respect. My complaint was about public opinion, not about physics; I agree that physics has produce counterintuitive but true results. (I have published twice in physics in the last few years.) But economics also produces such results.

    My offhand comment produced far wider responses than I anticipated. FYI, I try to clarify and defend my claim today at Overcoming Bias.

  • http://blogs.discovermagazine.com/cosmicvariance/sean/ Sean

    Fair enough, Robin; I’ve updated the post to link to your clarification.

    But you can’t say “economists [have said] for centuries that a minimum wage raises unemployment” and expect people to read “plausible models do not allow for a large positive effect, but they do allow for a large negative effect, or for a near zero effect.”

    Also, you list a long set of things that people intepreted you to say, but didn’t actually provide links to such interpretations. The people you actually did link to more or less quoted what you really did say.

  • http://hanson.gmu.edu Robin Hanson

    Sean, well apparently I can say and expect as I did, but perhaps I cannot reasonably do so. Live and learn. There were over 200 comments at various places, and yes I was too lazy to go supply links to the specific comments embodying each interpretation.

    The main complaint was that I said the effect was negative and they knew of economists who said the effect was near zero. That was the complaint I tried to address most directly in my explanation.

    P.S. I’ve enjoyed your blog a lot over the years.

  • http://blogs.discovermagazine.com/cosmicvariance/sean/ Sean

    Robin, sorry to pile on, but the issue is of sufficient import to current political debates to get right. You can’t really be surprised that people jumped on you.

    Of course a minimum wage won’t decrease unemployment. Even a committed market skeptic would be hard-pressed to argue that employers will hire more people if it costs more to do so. But, without doing any detailed comparison with data, there are two quite plausible scenarios:

    — The minimum wage substantially increases unemployment. If we got rid of it, a large fraction of the currently unemployed would be able to find low-paying jobs that are unavailable under the present system.

    — The minimum wage has no important effect on unemployment. Due to various features of the real world, changing the amount of the minimum wage might contribute a negligible perturbation to the unemployment rate, but it’s nothing in comparison with the real wage gains of low-income workers.

    As far as I can tell, there are quite reasonable data-based arguments in favor of either of these scenarios. The correct result matters a lot, as a matter of policy. You put it in a way that was arguably technically correct, but certainly misleading, especially when chosen as a paradigm of an iron-clad law of economics. “The minimum wage increases unemployment” doesn’t really have the status of “The entropy of a closed system will never spontaneously decrease.”

  • http://mollishka.blogspot.com mollishka

    The real question is whether or not any of the purple dimensions are also one of the twisted clockwise ones …

  • Eugene

    Of course, physicists don’t get much love from the public.

    What we need, is simple : MORE SEX.

  • http://hanson.gmu.edu Robin Hanson

    Sean, yes well no other claim in heaven or earth has the status of the non-decrease of entropy, so surely that is too high a standard. And yes, the obvious policy question is whether the decrease in employment is large enough to outweigh whatever other benefits one hopes from the increase in wages. But one should never take a claim that there is a decrease in employment for a claim that this cost outweighs other benefits. For that there is no escaping knowing the size, and not just the sign, of the effect.

  • Chinmaya Sheth

    “yes well no other claim in heaven or earth has the status of the non-decrease of entropy, so surely that is too high a standard”
    I think the uncertainty principle has a strong case.
    I don’t know much about economics, but it seems unfair not to increase min. wage for 10 years while the cost of everything has.

  • http://valatan.blogspot.com bittergradstudent

    Well, I’d probably rank conservation of energy/momentum above the non-decrease of entropy.

    I do think that a better example would have been “free trade improves economies” which people will still argue about

  • Haelfix

    More economists than not are against the minimum wage, and I suspect have a fairly nuanced and detailed view of the argument not found on this bulletin board.

    The data is notoriously difficult to pin down on this and many other economic problems. Its quite easy to find cases where a raise in the minimum wage had no effect on the unemployment rate (and negligable inflationary pressure), and viceversa. Then productivity enters the equation and so forth. Etc etc. It gets detailed and complex rapidly, which is why I defer my opinion to the experts and the extensive peer reviewed literature on the subject. Its their call not mine, and frankly I like it that way.

  • http://arunsmusings.blogspot.com Arun

    A modest increase in the minimum wage will be consumed, not saved, with the money likely spent in businesses that provide minimum wage jobs.

    Anyway, when one sees how the Fed manipulates interest rates, e.g., raising them when the economy reaches “full employment” with an unemployment rate of around 4%; how workers’ wages are considered to be inflationary but corporate profits are not – despite productivity increases, and how glibly the Fed ignores asset inflation, first with the stock market during the late 90s and then with the housing market subsequently, then one quite unapologetically can say, screw this, the system is not run for the good of the country, but for the good of those who have power; and right now the constituents of the Democrats have power. One cannot be the only part of the democracy that is not shouting “me, me, me, me” and looking out for the general interest. Either everyone looks out for everyone; or else, let the competition of the various factions decide which “me” gets its way.

  • http://arunsmusings.blogspot.com Arun

    Let’s put it this way – how many of you will voluntarily take a pay cut, or have no raise, so that your employer can afford to hire more people?

  • Robert the Red

    You should see this cartoon:

    Zippy and Physics

  • thm

    It’s climatologists, not economists, who can complain rightly about treatment in public. If only the policymakers who have such great skepticism for global warming directed a bit of that skepticism at economics…

    Way too much economic analysis, as far as I can tell, involves taking a multivariate data set, never plotting it, running it through a regression with a generic linear combination of variables, and announcing that the correlation coefficients show how some factor “explains” some fraction of the variation. Sort of the opposite of “plot data as you take it” and cautioning that a curve is only a “guide to the eye” or that a formula is purely “phenomenological.” I’d like to see econometric analysis done on some data from classic physics experiments. How about trying to understand a transistor from an econometric analysis of I-V data? Then design an amplifier based on the economic model, and see how it sounds..

    Edward Tufte has written a very nice analysis of a particular piece of Economists’ reasoning.

  • GP1

    We phyisicsts talk about crazy things all the time–extra dimensions, black holes, quark confinement, wavefunction collapse, conservations of momentum, the Earth moving around the Sun.

    I am trying to make sense of this statement. Are physicists talking about a crazy thing such as “the Earth moving around the sun?” I just don’t understand if this is a revisionist history trying to make Coperniucus a physicist or if modern Doctors of Philosophy who call themselves physicists are still debating if the earth moved around the sun? Strange.

    But the claim that “extra dimensions” is an “hypothesis that we’re driven to by the constrains put upon by the data” is simply a lie. I hope that Sean will correct this error.

  • db

    The statements “We physicists talk about crazy things all the time — extra dimensions, black holes, quark confinement, wavefunction collapse, conservation of momentum, the Earth moving around the Sun” allied to “they are hypotheses that we’re driven to by the constraints put upon us by the data” epitomise the problem so many everyday physicists have with String Theory, namely the subtle and not so subtle attempts to lump this purely speculative exercise in with well-established physical theories and in so doing, attempt to buy some kind of credibility by association. It’s very unfortunate, because the public is being lulled into believing that String Theory is motivated by experimental data. Why not tell them the truth, namely that this is Not Yet Physics, and that not a shred of experimental data exists to confirm or refute its findings?

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  • http://rawdc.blogspot.com z.king

    Unfortunately — and to a signficant extent this is our own fault — it’s not always clear to the person on the street which ideas are speculative and which have come to be accepted, nor is it clear that we have good reasons even for the wildest speculations.

    Maybe it’s because you physicists have only one label, “science.” No physicist is going to stress to the public that some significant claim of theirs is speculative. It’s only after a claim has fallen into disrepute that a physicist will come out and spin it in a negative light. Up until that point, it’s spun in total confidence.

    And good reasons aren’t good enough to blur the distinction between speculation and science. So, yeah, it’s your and your colleagues fault.

    That’s the beauty of math, isn’t, compared to physics? In math they have words like conjecture, that they use liberally. Mathematicians don’t get away with nothing, no matter what good reasons they have to believe some conjecture is true.

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Cosmic Variance

Random samplings from a universe of ideas.

About Sean Carroll

Sean Carroll is a Senior Research Associate in the Department of Physics at the California Institute of Technology. His research interests include theoretical aspects of cosmology, field theory, and gravitation. His most recent book is The Particle at the End of the Universe, about the Large Hadron Collider and the search for the Higgs boson. Here are some of his favorite blog posts, home page, and email: carroll [at] cosmicvariance.com .

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