Is modern economics "too cute"? Would we, in aggregate, be making more progress on fundamental questions if we stuck to the core issues highlighted in any 1st year graduate sequence at a TOP 20 department?
My mother has called me a sociologist and I haven't been insulted by her implicit claim that my work's questions sometimes wander far from the standard fare served up in a 1st year graduate sequence.
The Scheiber article poses the rhetorical question of whether economics is tipping too far in the direction of being too clever. It hints that "real science" is a time intensive process where researchers work for years to become the master of one very small niche while modern applied micro economists feel no guilt positing theories on any subject even those far from our core training such as whether TV watching causes autism.
Permit me to fight back. Where is the real prestige in modern economics? Structural IO is not a "cute" field. Industrial Organization economists writing down structural models of different industries are being tenured with a single digit number of publications. They are in extremely high demand and the discrete choice tools in these fields have been successfully exported to urban economics and environmental economics.
More and more "cute economists" are moving to business schools where they are tenured in applied micro slots. Such individuals are "free to choose". They are smart enough to pursue structural IO if they had wanted to. It is true that "natural experiments" are fun and relatively easy to do but economists are patient people with rational expectations and have an incentive to recognize that there is a cost of pursuing the "easy path". The New Republic article hints that too many young economists are being "seduced by the dark side" of the easy path.
I wonder if this claim is true. If 25 year old PHD student economists want to become well respected academic economists, and they take a look at the skill set that leading economics departments are hiring in then they have every incentive to pursue the "hard stuff".
The article misses that there is comparative advantage in modern economics. Not everyone aspires to be a structural guy, this is part of the reason that this small elite crew is paid so well. Not everyone has the ability to compete with these guys.
What should become of such clever people who aren't cut out to be formal game theorists or structural IO people? Would Scheiber have them go into consulting? My own preference would be that well trained NBER style applied micro people go "interdisciplinary" and try to work with softer social scientists in other fields to help them estimate more convincing empirical designs for measuring treatment effects and establishing plausible causality results.
Economic theorists continue to command great respect in our field and earn some of
the highest paychecks in St. Louis and its greater vicinity. The incentives are
right in modern economics to keep working on hard problems.
Critics such as Scheiber would need to convince me that there has been a "misallocation" of talent as individual economists choose what problems to work on.
Steve Levitt has achieved the best of both worlds. He has generated new knowledge
on many different subjects and has been able to communicate his findings broadly.
Young people everywhere have an increased interest in economics due to Levitt. Some of these young people will opt into doing game theory and structural IO but only they will make this choice for themselves.
If Levitt had chosen to work on "serious" topics using "serious" methods, would he have made a bigger breakthrough? I can't answer that question but Scheiber seems to be saying that the answer is yes.
My bottom line is a chicago one; "what is the market failure here?" Why isn't the equilibrium in our field a pareto optimum?