The New York Times Printer Friendly Format Sponsored By ------------------------------------------------------------------------ January 27, 2006 Students Are Leaving the Politics Out of Economics By LOUIS UCHITELLE Taking as a model the research techniques that Steven D. Levitt displays in his best-selling book, "Freakonomics," graduate students in economics are focusing on small insights about the economy rather than broad theories that explain how the overall system works. In doing so, they are withdrawing in effect from political debate. The broad-brush approach was a defining characteristic of the economists who were shaped by the Depression. The younger generation has tried to shun prescriptions that seek to cure the economy's ills. Instead, they cast economics as a scientific inquiry, using mathematical models, for example, to explore the economy without becoming advocates for one solution or another. Mathematical modeling tries to determine such things as rates of economic growth by plugging into computer models assumptions about inflation, hiring and the like. It is still the thrust of graduate training, but the students themselves are pushing for training in another form of exploration ? empirical research like that of Mr. Levitt, which relies on statistical evidence. Mr. Levitt, a 38-year-old professor at the University of Chicago, analyzes data that seem to explain behavior ? why the crime rate has declined, for example ? and that is what a growing number of graduate students in economics want to do, according to a poll of 230 of them at seven prestigious universities. "They don't see themselves as having political persuasions," said David Colander, an economic historian at Middlebury College, who conducted the poll and a similar one in 1987. "They see themselves as doing the best analytical-statistical work that can be done, better than in sociology and other social sciences. They are telling you what the options are, but not which option to choose." Mr. Levitt says his research, for example, finds a strong correlation between legalized abortion and the decline in crime. Thirty-three years after Roe v. Wade, the population of unwanted, crime-prone young Americans has shrunk, he argues, and so has the crime rate. But does that mean Mr. Levitt favors choice? He demurs. "As an economist, I am better than the typical person at figuring out whether abortion reduces crime," he said, "but I am no better than anyone else at figuring out whether abortion is murder or whether a woman has an intrinsic right to control over her body." The students, in their answers to the poll, applauded an education that teaches them to be researchers and to stay away from policy. The poll and its implications were debated in a panel discussion at the annual meeting of the American Economic Association in Boston this month, and in follow-up interviews. What the discussion and interviews reveal is a distinct difference in the way economics is taught to undergraduates and graduate students. "My undergraduate students are tremendously interested in public policy, and I teach it to them in principles of economics," said N. Gregory Mankiw, a Harvard economist who served as chairman of President Bush's Council of Economic Advisers and got into hot water with the administration by declaring that the outsourcing of jobs overseas was a form of free trade ultimately beneficial to the United States. Back in the classroom, Mr. Mankiw explains to undergraduates why free trade is good policy. "I am teaching the next generation of voters," he said. "In graduate school, however, we are training the students to use the tools of economic research." Those tools rarely tell the whole story. Mr. Levitt's explanation of the falling crime rate, for example, also factored in the rising prison population, but not the impact of television or culture or the aging of the baby boomers. The mathematical models plug rational behavior into their equations, but only some of the psychological quirks that behavioral economists increasingly catalog. The modeling of trade dynamics usually assumes that countries rationally trade the goods and services that each produces most proficiently ? despite mounting evidence that trade in the 21st century is not so straightforward. Moreover, the models and the increasingly popular empirical research rarely acknowledge altruism as an incentive, although Adam Smith stressed its importance, in addition to self-interest. Arjo Klamer also stresses the role of altruism. He trained in economics at Duke, taught at three universities in this country and then, discouraged by the drift of academic economics in the United States, returned to his native Netherlands, where he teaches the impact of culture on economic behavior at the University of Erasmus. "Altruism is an incentive for all sorts of behavior," said Mr. Klamer, who participated in the panel discussion in Boston, having worked with Mr. Colander on a similar poll of graduate students in 1987. "Scientists cooperate with each other in their research," he noted as an example, "and soldiers go to Iraq because they are willing to sacrifice their lives for a common good." The latest poll involved graduate students at the University of Chicago, Columbia, Harvard, Princeton, Yale, Stanford and the Massachusetts Institute of Technology. Among its results were that 10 percent of the first-year students considered themselves politically conservative, but that percentage rose to 23 percent by the fourth or fifth year. Fifty percent considered economics the most scientific of the social sciences, almost double the percentage in 1987. Half embraced the assumption that behavior is essentially rational, the same percentage as before. And 30 percent said that empirical economics was very important, up from 16 percent in the 1987 poll. "More and more, 'freakonomics' is becoming mainstream economics," Mr. Colander said. "That is the research that young economists see themselves as doing." Mr. Levitt and his co-author, Stephen J. Dubner, a writer and noneconomist, correlated advertising slogans with real estate prices, for example, to determine which slogans are connected with higher sales prices. In the same vein, two empirical economists ? Alan B. Krueger at Princeton and David Card, now at the University of California, Berkeley ? determined that a modest increase in the minimum wage did not discourage employment, and Jonathan Gruber at M.I.T. found a relationship between regular churchgoing and higher incomes. But they did not take the next step, from research to advocacy. Explaining the reluctance to advocate, Mr. Colander said that the graduate students were better at mathematics than their counterparts 19 years ago, and that made them comfortable with this approach. Graduate schools rarely offer courses in the history of economic thought, the poll showed, and fewer students than in the 1980's have read the works of the giants in their field ? Adam Smith, for example, or David Ricardo, Alfred Marshall and John Maynard Keynes. These eminences painted the economy on a broad scale and were far more engaged than modern economists in political choice. "Keynes looked out the window and talked to people, and that fed his psychological insights," Mr. Klamer said. Research, theory, anecdotal observation and policy prescriptions were much more intertwined. That was also true of recent Nobel laureates like Milton Friedman, Paul Samuelson, the late James Tobin and Robert Solow, all of them young people during the Depression ? drawn to economics, as Mr. Solow put it, to repair the world through government intervention in a private sector that could not repair itself. "If you can control inflation this way," Mr. Solow said, describing a viewpoint that he considers too narrow, "then the economy will go back on its own in reasonably good time to as good a set of conditions as its institutions will permit." "We have lost our optimism that the tools of economics can be used to manage the economy," Mr. Levitt said, "and we have moved to a much more micro view of the world. We can tell you whether labor unions raise productivity or stifle innovation or raise wages, but we are reluctant to judge whether the tradeoffs are good or bad." * Copyright 2006 The New York Times Company * Home * Privacy Policy * Search * Corrections * XML * Help * Contact Us * Work for Us * Site Map * Back to Top <#top>