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Economists are horrible people

slo1
Posts: 4,329
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10/24/2013 8:42:58 PM
Posted: 3 years ago
http://www.globalpost.com...

BOSTON " Why does the invisible hand want to slap you across the face?

Because it belongs to a douchebag.

That's the conclusion, anyway, of a provocative blog post in Psychology Today by Wharton professor Adam Grant making the rounds across planet internet.

But before all you econ majors get your demand curves in a twist, hear what the good professor has to say.

Citing research by Cornell professor Robert Frank, Grant makes the compelling case that economists are neither generous, nor cooperative. And that's because they've swallowed one of Adam Smith's main tenets: people act out of rational self-interest.

Emphasis here on the self.

In short: economists don't feel bad about acting in their self-interest because " well " the economic theories tell them that they should be selfish.

To help make his case, Grant points to three key data points.

First, economics professors give less money to charity than those in other academic fields, such as literature, history, philosophy, psychology, sociology, anthropology, education, physics, chemistry and biology.

"More than twice as many economics professors gave zero dollars to charity than professors from the other fields," Grant adds.

Second, economics students are more likely to engage in deceptive behaviors when they believe they stand to gain, as this study in Germany shows.

Finally, economics majors " echoing that old Wall Street hero Gordon Gekko " are more likely to believe that greed is good.

Grant makes several other keen observations in the piece, including the possibility that, as an area of study, selfish souls who want to associate with others just like them self-select for economics.

So, there you go, proof positive that economists are horrible, horrible people.

But since there's always another hand in economics (thank you very much, Harry S. Truman), let me suggest another set of evidence.

Adam Smith's famous quote about rational self-interest goes like this: "It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest."

And, sure, there's plenty of truth in that insight. The economy is a complex beast with countless individuals competing fiercely for scarce resources doing what they think will better their economic standing.

As the longeivity of Smith's idea attests, somehow this all works out for the greater good. Most of the time, anyway.

But not all the time.

And that's not all that surprising.

Smith's The Wealth of Nations was published in 1776. That's 83 years before Charles Darwin's Origin of Species, and like all brilliant and rightly famous theories, there's been some evolution in thinking since.

What's missing from this picture " and it's something that Grant points to as a possible solution to the problem " is the emergence of behavioral economics, which modified more traditional economic theories by adding in so-called social preferences like altruism, fairness and even cooperation.

In short, psychology was blended with all the charts and graphs in an attempt to paint a more accurate picture of how people really act, not how they're supposed to act.

These more complete theories are where all the action in economics is taking place these days. They also underlie some of the best work of this year's three Nobel Prize winners in Economics.

And you wouldn't call Robert Shiller, Eugene Fama or Lars Peter Hansen douchebags, would you?

That would be irrational.
slo1
Posts: 4,329
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10/24/2013 8:44:12 PM
Posted: 3 years ago
I have not looked at the study that found economists were stingy with their charitable giving. Are the reasons for that in the article spot on or something else going on?
DanT
Posts: 5,693
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10/25/2013 7:11:47 AM
Posted: 3 years ago
At 10/24/2013 8:42:58 PM, slo1 wrote:
http://www.globalpost.com...

BOSTON " Why does the invisible hand want to slap you across the face?

Because it belongs to a douchebag.

That's the conclusion, anyway, of a provocative blog post in Psychology Today by Wharton professor Adam Grant making the rounds across planet internet.

But before all you econ majors get your demand curves in a twist, hear what the good professor has to say.

Citing research by Cornell professor Robert Frank, Grant makes the compelling case that economists are neither generous, nor cooperative. And that's because they've swallowed one of Adam Smith's main tenets: people act out of rational self-interest.

Emphasis here on the self.

In short: economists don't feel bad about acting in their self-interest because " well " the economic theories tell them that they should be selfish.

To help make his case, Grant points to three key data points.

First, economics professors give less money to charity than those in other academic fields, such as literature, history, philosophy, psychology, sociology, anthropology, education, physics, chemistry and biology.

"More than twice as many economics professors gave zero dollars to charity than professors from the other fields," Grant adds.

Utility is maximized when an exchange is made at the equilibrium point. When one engages in charity the utility derived is below its potential, because the maximum benefit is not utilized.
Second, economics students are more likely to engage in deceptive behaviors when they believe they stand to gain, as this study in Germany shows.

I would like to read that study, because it sounds off. Furthermore, correlation does not equal causation.
Finally, economics majors " echoing that old Wall Street hero Gordon Gekko " are more likely to believe that greed is good.

Greed is good. Without greed this world would be less advanced and life would be much worse off.
Grant makes several other keen observations in the piece, including the possibility that, as an area of study, selfish souls who want to associate with others just like them self-select for economics.

So, there you go, proof positive that economists are horrible, horrible people.

But since there's always another hand in economics (thank you very much, Harry S. Truman), let me suggest another set of evidence.

Adam Smith's famous quote about rational self-interest goes like this: "It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest."

And, sure, there's plenty of truth in that insight. The economy is a complex beast with countless individuals competing fiercely for scarce resources doing what they think will better their economic standing.

As the longeivity of Smith's idea attests, somehow this all works out for the greater good. Most of the time, anyway.

But not all the time.

And that's not all that surprising.

Smith's The Wealth of Nations was published in 1776. That's 83 years before Charles Darwin's Origin of Species, and like all brilliant and rightly famous theories, there's been some evolution in thinking since.

What's missing from this picture " and it's something that Grant points to as a possible solution to the problem " is the emergence of behavioral economics, which modified more traditional economic theories by adding in so-called social preferences like altruism, fairness and even cooperation.

In short, psychology was blended with all the charts and graphs in an attempt to paint a more accurate picture of how people really act, not how they're supposed to act.

These more complete theories are where all the action in economics is taking place these days. They also underlie some of the best work of this year's three Nobel Prize winners in Economics.

And you wouldn't call Robert Shiller, Eugene Fama or Lars Peter Hansen douchebags, would you?

That would be irrational.


Wanna debate me on the merits of the invisible hand?
"Chemical weapons are no different than any other types of weapons."~Lordknukle
slo1
Posts: 4,329
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10/25/2013 8:51:11 AM
Posted: 3 years ago
At 10/25/2013 7:11:47 AM, DanT wrote:
At 10/24/2013 8:42:58 PM, slo1 wrote:
http://www.globalpost.com...

BOSTON " Why does the invisible hand want to slap you across the face?

Because it belongs to a douchebag.

That's the conclusion, anyway, of a provocative blog post in Psychology Today by Wharton professor Adam Grant making the rounds across planet internet.

But before all you econ majors get your demand curves in a twist, hear what the good professor has to say.

Citing research by Cornell professor Robert Frank, Grant makes the compelling case that economists are neither generous, nor cooperative. And that's because they've swallowed one of Adam Smith's main tenets: people act out of rational self-interest.

Emphasis here on the self.

In short: economists don't feel bad about acting in their self-interest because " well " the economic theories tell them that they should be selfish.

To help make his case, Grant points to three key data points.

First, economics professors give less money to charity than those in other academic fields, such as literature, history, philosophy, psychology, sociology, anthropology, education, physics, chemistry and biology.

"More than twice as many economics professors gave zero dollars to charity than professors from the other fields," Grant adds.

Utility is maximized when an exchange is made at the equilibrium point. When one engages in charity the utility derived is below its potential, because the maximum benefit is not utilized.
Second, economics students are more likely to engage in deceptive behaviors when they believe they stand to gain, as this study in Germany shows.

I would like to read that study, because it sounds off. Furthermore, correlation does not equal causation.
Finally, economics majors " echoing that old Wall Street hero Gordon Gekko " are more likely to believe that greed is good.

Greed is good. Without greed this world would be less advanced and life would be much worse off.
Grant makes several other keen observations in the piece, including the possibility that, as an area of study, selfish souls who want to associate with others just like them self-select for economics.

So, there you go, proof positive that economists are horrible, horrible people.

But since there's always another hand in economics (thank you very much, Harry S. Truman), let me suggest another set of evidence.

Adam Smith's famous quote about rational self-interest goes like this: "It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest."

And, sure, there's plenty of truth in that insight. The economy is a complex beast with countless individuals competing fiercely for scarce resources doing what they think will better their economic standing.

As the longeivity of Smith's idea attests, somehow this all works out for the greater good. Most of the time, anyway.

But not all the time.

And that's not all that surprising.

Smith's The Wealth of Nations was published in 1776. That's 83 years before Charles Darwin's Origin of Species, and like all brilliant and rightly famous theories, there's been some evolution in thinking since.

What's missing from this picture " and it's something that Grant points to as a possible solution to the problem " is the emergence of behavioral economics, which modified more traditional economic theories by adding in so-called social preferences like altruism, fairness and even cooperation.

In short, psychology was blended with all the charts and graphs in an attempt to paint a more accurate picture of how people really act, not how they're supposed to act.

These more complete theories are where all the action in economics is taking place these days. They also underlie some of the best work of this year's three Nobel Prize winners in Economics.

And you wouldn't call Robert Shiller, Eugene Fama or Lars Peter Hansen douchebags, would you?

That would be irrational.


Wanna debate me on the merits of the invisible hand?

Entire premise of the invisible hand is that people looking for his or her self interest is the most efficient method to promote society. It relies on a rather intuitive human behavior premise that we tend to be the most productive when looking for our own interests versus others.

In a general sense it is fundamentally correct because we are not wired to be honey bees. In a targeted sense where specific goals are required to be executed it is not effective. Try using the invisible hand to maintain an army while developing new technologies so the army is not decimated.

The only reason one could argue the invisible hand did quite well organizing the colonies and milita to drive back the dirty Brits was that a guy grabbing his hunting musket by the door and heading to fight the British knew he could give a good fight. Try grabbing the hunting rifle by the door and going up against Syria's army and one quickly learns, you don't bring a gun to a WMD fight.

You see how I think about the invisible hand. Like a good moderate, I see its purpose and value but limitations. If you see a debate, offer it up and I'm sure that we can come to one. Just leave a little meat on the bone because I can't argue that humans should function like bees that operate as a collective, although that could be a fun debate.
darkkermit
Posts: 11,204
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10/25/2013 12:47:07 PM
Posted: 3 years ago
At 10/24/2013 8:42:58 PM, slo1 wrote:

First, economics professors give less money to charity than those in other academic fields, such as literature, history, philosophy, psychology, sociology, anthropology, education, physics, chemistry and biology.


Well it would be pretty damn remarkable if they were listed as number one. Although this doesn't actually say they donate the least, so I'm curious how they actually rank. Otherwise this isn't too convincing.
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darkkermit
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10/25/2013 12:54:35 PM
Posted: 3 years ago
At 10/25/2013 12:47:07 PM, darkkermit wrote:
At 10/24/2013 8:42:58 PM, slo1 wrote:

First, economics professors give less money to charity than those in other academic fields, such as literature, history, philosophy, psychology, sociology, anthropology, education, physics, chemistry and biology.


Well it would be pretty damn remarkable if they were listed as number one. Although this doesn't actually say they donate the least, so I'm curious how they actually rank. Otherwise this isn't too convincing.

Yes, it is correct that they do donate the least. The methodology isn't super rigorous, in that it used very broad grouping of other discplines (ex: social science, natural science).

Although it should be noted that those that gave no money to charity is only at 9.3% so its still incorrect to say that economists are horrible people as a whole, but horrible people are more likely to be economist.
Open borders debate:
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Cermank
Posts: 3,773
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10/25/2013 12:59:03 PM
Posted: 3 years ago
I can believe them not being generous, but I'm not sure of their parameter of judgement regarding cooperation. that seems pretty abstract. And that doesn't equal to them being horrible people. Just that they don't like keeping up with social pretended.
suttichart.denpruektham
Posts: 1,115
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10/25/2013 11:10:12 PM
Posted: 3 years ago
if you want to know what would happen if you bring an economist out if the equation, look at China under Mao, a complete selfless paradise...