Are Economists Driven by Ideology or Evidence?


Mark Thoma in The Fiscal Times:

Which is more important in determining the policy positions of economists, ideology or evidence? Is economics, as some assert, little more than a means of dressing up ideological arguments in scientific clothing?

This certainly happens, especially among economists connected to politically driven think tanks – places like the Heritage Foundation come to mind. Economists who work for businesses also have a tendency to present evidence more like a lawyer advocating a particular position than a scientist trying to find out how the economy really works. But what about academic economists who are supposed to be searching for the truth no matter the political implications? Can we detect the same degree of bias in their research and policy positions?

Once again, it is certainly possible to find examples where this has occurred. But the vast majority of academic economists appear willing to abandon ideology when the evidence is clear. Take, for example, the highly charged political issue of whether deficit spending helps to stimulate the economy in recessions. A survey of top economists from both political parties asked, “Because of the American Recovery and Reinvestment Act of 2009, the U.S. unemployment rate was lower at the end of 2010 than it would have been without the stimulus bill.”

It produced a remarkable 97 percent agreement (only one economist disagreed). When asked in a follow up question if the costs exceeded the benefits, the disagreement rose to 6 percent, but even in this case an overwhelming number agreed (75 percent) or had no opinion (19 percent). A question on the use of dynamic scoring to evaluate legislative proposals, another highly contentious political issue, was supported by 100 percent of the respondents. Similarly, support for infrastructure spending was 98 percent, no disagreement, and 2 percent uncertain.

The panel does not always agree. Take another politically charged question, “If the federal minimum wage is raised gradually to $15-per-hour by 2020, the employment rate for low-wage US workers will be substantially lower than it would be under the status quo.” In this case, 34 percent agree, 29 percent disagree, and 37 percent are uncertain. Does ideology explain the different outcome in this case?

More here.