Three Essays in the History of Economics
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2021
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Abstract
This dissertation looks at the interaction between economics and public policy. Contemporary public policy debates often rely on economic analysis and prognosis. Economists often seek to inform and reform public policy. In three chapters, I complicate the notion of the economist as a neutral expert insulated from political philosophy.The first chapter examines the role of economist Richard T. Ely and figures associated with his Institute for Research in Land Economics in residential housing research and policy during the interwar period. As part of this, it builds on the work of urban historians and planners to argue that Ely and his Institute played an important role in promoting policies that encouraged residential segregation. These aspects of Ely’s career are effectively missing from the contemporary history of economics literature despite the importance of the topic of residential segregation and the recent interest in the role of racial thinking in economics. Ely wrote and edited prominent textbooks which gave a justification for increased government involvement in land use based on his social theory of property. Ely’s Institute for Research in Land Economics in partnership with the National Association of Real Estate Boards provided academic training for all Realtors in the country. As part of this training, Realtors were taught about the role of deed restrictions and the role of race in real estate values. I examine Ely’s intellectual background, his academic work, and his foundational role in an academic network that helped establish a formal system of residential segregation that was grounded in their social scientific principles and findings.
The second chapter looks at the efforts of James Buchanan and others associated with the Virginia School of Political Economy to keep institutional analysis and political philosophy within the economic discipline. It was coauthored with Peter Boettke and was published in Public Choice (2020). Using archival material from the Thomas Jefferson Center for the Study of Political Economy and first-person recollections from relevant figures, we reconstruct James M. Buchanan’s mission (in partnership with G. Warren Nutter) to “save the books” in the related but distinct disciplines of economics and political economy. From his graduate days at the University of Chicago in the late 1940s, Buchanan was worried about dominant trends in mainstream economics which would carry the field away from its core. In particular, Buchanan was worried that political economy was becoming unmoored from the types of philosophic and institutional analysis which were previously central to the field. In its flight from reality, Buchanan feared economics was in danger of abandoning social-philosophic issues for exclusively technical questions. More than this, Buchanan feared that economists were asserting their authority as benevolent social planners. In response to these fears, Buchanan sought to (re)create an economics which would balance the science of economics and the art of political economy—an economics which began with an explicit commitment to democracy and would integrate philosophy, institutional thinking, and technical, price-theoretic economics, into a coherent working paradigm for research and graduate education.
The third chapter assesses the challenges to and opportunities for economics presented by developments in the philosophy and sociology of science literatures. It was coauthored with Jayme Lemke and is published in The Review of Austrian Economics (2020). The “science wars” are a contentious, ongoing series of debates about the nature of knowledge and the proper role of the scientific method. The participants take many forms, but always central to the controversy are postmodern ideas that challenge commonly accepted understandings of the objectivity of data, science, and sometimes even reality. In this chapter, we consider the relevance of these debates for the practice of economics. Ultimately, we propose that these debates present two opportunities and a significant challenge to the discipline of economics. The opportunities are: 1) to incorporate post-positivist philosophy of science as a way to better interpret the meanings that become attached to institutions, which is particularly important for studies of political hierarchy and oppression, and 2) to do better empirical work by robustly incorporating interpretation into the gathering and analysis of data. The challenge is to do this work without abandoning economic theory itself, preserving the critically important insights of the universal logic of human choice while abandoning the illusion of a single best scientific method.