It’s been a busy week around here, so I haven’t had time to write a proper note on Paul Krugman’s essay in the Times Mag­a­zine last week­end. Fortunately—for me, at least, and I hope for you—it turns out that back in Jan­u­ary I said what I would have wanted to say, which is that you should go read Dier­dre McCloskey’s Prickly Par­a­digm pam­phlet The Secret Sins of Eco­nom­ics (PDF). It’s short, smart, and offers a philo­soph­i­cally sturdy back­ground and con­text for some of the prob­lems that Krug­man dis­cusses in his essay. McCloskey’s pam­phlet is well writ­ten to boot, and clear enough that non-​economists should have no trou­ble with it.

This morn­ing Yves Smith asks:

Why is it that eco­nom­ics is a Teflon dis­ci­pline, seem­ingly unable to admit or rec­og­nize its errors?

After all, she notes,

We have just wit­nessed them make a mas­sive fail­ure in diag­no­sis. Despite the fact that there was ram­pant evi­dence of trou­ble on var­i­ous fronts – a hous­ing bubble in many coun­tries (the Econ­o­mist had a major story on it in June 2005 and as read­ers well know, prices rose at an accel­er­at­ing pace), rising levels of con­sumer debt, stag­nant aver­age worker wages, lack of cor­po­rate invest­ment, a gaping US trade deficit, insanely low spreads for risky cred­its – the author­i­ties took the “everything is for the best in this best of all pos­si­ble worlds” pos­ture until the wheels started coming off. And even when they did, the vast major­ity were con­sti­tu­tion­ally unable to call its trajectory.

Smith looks at sev­eral rea­sons why econ­o­mists were so bad at the job they were sup­posed to be doing. These include Robert Shiller’s “not-very-convincing defense” of group­think, the sug­ges­tion that econ­o­mists are “too close to the seat of power,” a con­gen­i­tal lack of intro­spec­tion, and a sense of com­pla­cency afforded by belief in the theory of the Great Moderation.

With­out dis­put­ing any of these, I’d like to pro­pose another, more fun­da­men­tal item for this list.

Buried under a head­line that rivals one in yesterday’s NYT for incom­pre­hen­si­bil­ity is an arti­cle by Nicholas Wade that struck me as inter­est­ing for all the wrong reasons.

Wade presents the work of Gre­gory Clark, an econ­o­mist whose research focuses on the changes that occurred in human pop­u­la­tions before, during, and after the Indus­trial Rev­o­lu­tion. Clark’s hypoth­e­sis is that genetic, and not merely cul­tural, changes are ulti­mately respon­si­ble for the increase in pro­duc­tion that allowed Euro­pean soci­eties to escape the so-​called “Malthusian trap.”

Clark’s book isn’t out yet, but Wade’s long arti­cle gives one good rea­sons to sus­pect that Clark’s hypoth­e­sis is at least untestable, if not wrong. (Most of the econ­o­mists quoted in Wade’s arti­cle praise Clark’s data gath­er­ing but are skep­ti­cal of his genetic claims.) But as a new episode in the long flir­ta­tion eco­nom­ics has kept up with biol­ogy, it’s worth paying atten­tion to.