Posts tagged with: academia

In a recent Reuters opinion column, Mark Thoma faults academic economists for their failure to predict the housing crash. He says their failure can be attributed to the disconnect between academia and economic forecasters. I don’t agree with Thoma, but I do think he gets it right when he says the failure of modern day economics,

May have something to do with the desire among economists to become more of a science – a heavy focus on theory and math is the result.

During the classical period, economics was closely linked to psychology. In the early 20th century, neoclassical economics veered from the study of psychology as economists sought to reshape the discipline as a natural science.

Modern neoclassical economics draws influence dating back to René Descartes. According to Dr. Robert Nelson’s review of Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street by Tomas Sedlack, Cartesian thought encouraged a belief that mathematical equations are equivalent to religious truths. The economic man is seen as,

 ‘A mechanical construct that works on infallible mathematical principles, … and economists are [therefore] capable of explaining even his innermost motives’ through mathematical methods.

Philosophical implications suggest modern economics is essentially attempting to reduce individuals to numbers. Economic models that operate in a perfect abstract framework with absolute assumptions conflict with the unpredictable and sometimes irrational behavior of human nature. This may explain why data forecasting without a full picture of the human person is not sufficient in predicting major market failures like the housing crash.

Karen Ho takes an anthropological approach to the financial crisis in her 2008 book  Liquidated: An Ethnography of Wall Street. As an anthropology graduate from Princeton, Ho is hired to work at an investment bank and writes about the corporate culture on Wall Street prior to the housing collapse. Homogenous recruitment, constant downsizing, high risk/high reward job liquidity, short-sighted bonuses, and deception of shareholder value were among many behaviors she observed. Such irrational and risky behavior should have been a red flag for any economist, shedding light on a major incentive problem.

Though it can be argued that the separation between modern economics and behavioral economics is necessary for empirical data and analysis, some economists want to see the gap close. According to Sedlack, modern economics should deemphasize the role of mathematics. Math is only the tip of the ice berg; it is vital, but not sufficient in economics. Nelson quoted him saying,

‘Below the mathematics lie much more fundamental issues’ of institutions, culture, and basic belief — even of religion. These issues do not readily lend themselves to mathematical methods.

Some human desires simply cannot be fulfilled by economic objects. A price value cannot be placed on the community, family, knowledge of God and so on. It is impossible to commodify or quantify these desires into an economic model. Richard Neuhaus famously said,

To attribute everything to the economic factor is to perpetuate the terrible lie of the Marxists. In addition to the economic is the political and, most important, the cultural. At the heart of the cultural is the moral and spiritual.

The number one failure of modern economics is an understanding of the human person that is incomplete. Economists must draw on anthropology, sociology, psychology, philosophy, and theology to better understand what drives human behavior and decision making. Forecasters will never be able to predict the future the way they would like, but social studies coupled with empirical economic analysis may help economists better understand the why questions that numbers cannot explain.

Immigration is never a light topic to discuss, and even the proposition of a solution to the effects caused by immigration might well be considered radical. The idea of a harmonious multicultural society is idealistic, but in reality, is very difficult to achieve.

When looking at the advantages and disadvantages of immigration, relative to the nation receiving immigrants, the economy is a concern that often comes up. In a recent IEA (Institute of Economic Affairs) paper, Nobel Prize winner Professor Gary Becker proposes a way in which the economy and the government of the country receiving immigrants could benefit. He believes that governments should sell the right to immigrate. Becker says, “The government should set a price each year and anyone would be accepted, aside from obvious cases such as potential terrorists, criminals and people who are very sick and who would be immediately a big burden to the health system.”

Becker uses the United States as a model for how the solution might play out. The U.S. has been admitting about one million legal immigrants a year. He says, “At a price of $50,000 per immigrant, let’s suppose this would attract one million immigrants.” At a 5 per cent interest rate, it has a present value of roughly $1 trillion. Of course, different countries could charge different rates, and the option of offering loans to those who couldn’t pay the amount up-front is a possibility. Through this solution, Becker believes a country would get immigrants who are young, skilled, and have the greatest commitment to the country.

Becker’s use of the United States as an example seems to suggest it is experiencing a revenue problem. But in fact, the government has a spending problem, not a revenue problem.

Immigration is not a new concept; it has been taking place since the dawn of time. Since the early days of Christianity, the welcoming of others has been encouraged.  In an interview with Thomas C. Oden in Religion & Liberty,” Oden notes, “Ancient Christian writers knew that all Christians were being called to receive strangers and travelers hospitably.” But this does not get to the question of whether the stranger is entering under lawful pretences. These two viewpoints often conflict. Oden goes on to say, “They conflict dramatically between those who would emphasize the hospitality in an absolute way, and those who would emphasize the moral requirement of following the law as a part of a just social order, including the duty to respect legal borders.” So even among late and present day Christians, there is great contrast in opinions regarding this issue.

But among Christians, policy makers, and all people for that matter, the key component to any decision should be based on human dignity. Becker’s proposal works to boost the revenue of countries, but seems to take lightly the rights of the immigrants themselves.  Sure, they will be accepted into the country and may eventually enjoy the same benefits as a natural-born citizen, but under the proposal, they are treated more as a commodity than a human being.

Although Becker’s proposal would work to moderate the illegal immigration problem, by offering a viable option for immigrants to enter legally, it does not address the cultural differences and religious factors that often play a large role in the discontent surrounding immigration. Germany, for example, has expressed great concern over the large influx of Muslim immigrants (coming mainly from Turkey) entering its borders. The predominant religion in Germany has long been Christianity, although church attendance rates have experienced a rather steady decline. The Turkish immigrants have proven to be very devout in their Islamic faith, which has made Germany question how strongly it wants to hold onto its Christian roots. These religious differences have fueled much of the debate which still continues.

The topic of immigration raises many questions about how it should be handled. Not every country holds the same stake in each issue surrounding immigration (culture, religion, economics, etc.), but each decision made should be premised on the dignity of the human person first. Becker’s proposal seemingly focuses on a solution based solely on revenue concerns. By doing this he fails to recognize immigrants who immigrate for humanitarian reasons (lack of resources, economic oppression, etc.)  For people yearning for freedom, having to pay a considerable amount to enter a county doesn’t exactly fit within the mantra of liberty. Use of the free market is in many cases a good thing, but when its use undermines the very freedom it attempts to foster, it is violating its own principles. This does not mean the immigration system should not be revised; restructuring the legal immigration system in the U.S. and other countries would help a great deal. But, in order for these changes to be truly positive, they should first and foremost be based on the dignity of the human person.


Just a brief note addition to Kevin’s post: the free article from May’s Touchstone magazine is Terence O. Moore’s feature, “Not Harvard Bound.”

A key quote:

The elite schools no longer command the reverence and deference of red-state America. The parents and students of “flyover country” are starting to put their money where their morals are or where they believe truth is.

There’s a discussion of Moore’s article at Touchstone‘s reader discussion site, Treaders.

HT: Mere Comments

In his New York Times column this week, Peter Steinfels has an insightful analysis of an intriguing and provocative new book by C. John Sommerville, The Decline of the Secular University.

Those who study the history of American academia are familiar with the story of the secularization of universities as recounted expertly by Christian scholars such as George Marsden (The Soul of the American University) and James Burtchaell (The Dying of the Light), who decry the shunting of religion from the corridors of intellectual influence. Sommerville, in contrast and in Steinfels’ apt description, “is less interested in any loss to religion than in the loss to the university.” In brief, Sommerville argues that the universities’ indifference or hostility to religion has rendered them increasingly marginal and ineffectual in a society that remains heavily religious.

HT: Rick Garnett at Mirror of Justice.