On my twitter feed today, I stumbled across this very interesting (and depressing) post by Claudia Sahm. MIT's great Peter Temin wrote this piece about "culture" 20 years ago. He discusses Alberto Bisin's early work on culture. Here is a great Vox EU piece by Bisin on culture that poses some intellectual puzzles for comparative economists.
Dr. Sahm's piece raises a fascinating question; does academic economics have a bad culture? The goal of academic economics is to build up knowledge to provide a scientific method for judging the efficiency and equity consequences of different public policies and to train the next generation of economists. Does our culture further this goal? If not, how did we get into this equilibrium and if we are in a "bad equilibrium" where we are losing talent because of our bad culture, how do we switch equilibrium?
To even begin to think about this question requires delving into a tough-counter factual; who would enter our field (selection) and how would senior incumbents allocate their time and effort (treatment) if we had a different culture? Would junior incumbents in our field achieve more if we had a "better culture"?
Given that each economist has only 24 hours in a day and is competing for scarce resources such as slots at universities, great students, grants, journal pages, attention from the media, attention from our spouses, friends and children and parents, what should be our "rules of engagement"?
I remember reading Dubner of Freakonomics saying that economics is "cut throat". While we celebrate perfect competition in Econ 101, do we engage in perfect competition (pun intended)? Have you met economists who are charming in public but talk behind the back of colleagues? Of course. The anonymous web has simply taken those past private conversations and made them public so that everybody is next to the watercooler as the big talker talks. Perhaps the Web has also created a "learning effect" as others learn the dark art of bad mouthing other people.
In a "rat race", how much of one's progress is due to rising by merit vs. tearing down others?
In the TV Show the West Wing, a perfect President (who had a Nobel Prize in Economics!) led a organized respectful team. Most economics departments do not have this same feel. Younger faculty face tension over the tenure process. The senior faculty must choose whether to stay in the game or devote more time to consulting and leisure. Graduate students must choose who to work with and what problems to work on.
At USC Economics, we are thinking about what are a set of "rules of the game" so that PHD students, junior faculty and senior faculty all learn from showing up to the department. Mutual respect is a "two way street". Tom Sargent said that we are all students but differ with respect to our vintages.
The challenge in economics is "directed search". If a senior faculty member believes that he is unlikely to learn from interacting with a PHD student from a LRM (ha!) then he will focus his attention on the HRM PHD student. Given our finite time, this search strategy may be "individually rational" but it begins to create monopoly power that is re-enforced as that HRM PHD student takes a job at a MRM Assistant Professor job and is named to the NBER. Small differences in initial conditions do matter in a world of finite time and attention. If we add to this sexism and racism then this exacerbates the challenge.
I HAVE UPDATED this part of the blog post.
So yes, culture matters. I don't know what tax or subsidy to introduce here to rectify my market's failure. I don't know how far the CE is from the Pareto Optimum. I have benefited from the status quo rules. I don't know how much I have benefited from them.
Mutual respect takes time to implement. It is easy to state that we should abide by this but there are thousands of young PHD students. How do we "sort them" efficiently?
Relative to other fields, our culture has a few clear differences;
1. Researchers are very tough on each other in public seminars (the "Chicago seminar" style). At UCLA History seminars, the speaker reads from notes and at the end of the hour, polite listeners then ask questions.
2. People do not read each other's papers so the ability to speak and argue is even more important. Since people do not read, an endorsement from a very important person carries much weight.
Final Thoughts;
Is part of the problem that academic economics is a "non-profit sector"? Google as a for profit firm has the right incentives to have a good culture because shareholders will earn a higher rate of return if the good culture at Google allows this firm to hire and retain skilled workers at a relative low salary.
Since senior faculty have residual control of departments but do not have "equity" (i.e stock shares) in economics departments, do we have strong incentives to improve "the culture"? In economics, departments such as Berkeley and MIT have been ranked quite high because they have been known to have a great culture of hiring strong juniors and mentoring them so that they become tenured some then leave a Berkeley (think of Chetty while others remain think of Saez). Other schools such as Columbia in the 1990s suffered because they had "bad cultures".
So, this suggests that competition between schools and a desire to rise in the rankings should encourage departments to "compete on culture". At USC , we are trying to implement this but this is easier said than done.