Segue entrevista com Dany Rodrik. Vale a pena ler e ter uma noção da visão desse grande economista.
1. How would you briefly state your perspective on economics?
I would say I am pretty conventional and mainstream on methods, but
generally much more heterodox on policy conclusions. I have never
thought of neoclassical economics as a hindrance to an understanding of
social and economic problems. To the contrary, I think there are
certain habits of mind that come with thinking about the world in
mainstream economic terms that are quite useful: you need to state your
ideas clearly, you need to ensure they are internally consistent, with
clear assumptions and causal links, and you need to be rigorous in your
use of empirical evidence.
Now, this does not mean that neoclassical economics has all the
answers or that it is all we need. Too often, people who work with
mainstream economic tools lack the ambition to ask broad questions and
the imagination to go outside the box they are used to working in. But
that is true of all “normal science.” Truly great economists use
neoclassical methods for leverage, to reach new heights of
understanding, not to dumb down our understanding. Economists such as
George Akerlof, Paul Krugman, and Joe Stiglitz are some of the names
that come to mind who exemplify this tradition. Each of them has
questioned conventional wisdom, but from within rather than from
outside.
A typical complaint against mainstream economics is that it is too
limiting in the conclusions it leads to. Mainstream economists are often
seen as ideologues of the market economy. I would concede that most of
my economist colleagues tend to view markets as inherently desirable and
government intervention as inherently unwelcome. But in reality what
we teach our students in the classroom – the advanced students if not
the undergraduates –and what we talk about in the seminar room are
typically much more about the myriad ways in which markets fail. I love
an old quote from Carlos Diaz-Alejandro who once said something along
the lines of “by now any graduate student can come up with any policy
conclusion he desires by building appropriate assumptions into his
model.” And that was some thirty years ago! We have plenty more models
that generate unorthodox conclusions now.
One reaction I get when I say this is the following: “how can
economics be useful if you have a model for every possible outcome?”
Well, the world is complicated, and we understand it by simplifying it. A
market behaves differently when there are many sellers than when there
are a few. Even when there are a few sellers, the outcomes differ
depending on the nature of strategic interactions among them. When we
add imperfect information, we get even more possibilities. The best we
can do is to understand the structure of behaviour in each one of these
cases, and then have an empirical method that helps us apply the right
model to the particular context we are interested in. So we have “one
economics, many recipes,” as the sub-title of one of my books puts it.
Unlike the natural sciences, I think economics advances not by newer
models superseding old ones, but through a richer set of models that
shed ever-brighter light at the variety of social experience.
However, contemporary economics in North America has one great
weakness, and that is the excessive focus on methods at the expense of
breadth in terms of social and historical perspective. PhD programs now
train applied mathematicians and statisticians rather than real
economists. To become a true economist, you need to do all sorts of
reading – from history, sociology, and political science among other
disciplines – that you are never required to do as a graduate student.
The best economists today find a way of filling this gap in their
education. I consider myself very lucky that I was a political science
major and did a master’s in public affairs (as it is called at
Princeton) before I turned to economics. I say lucky, because some of my
best work – by my judgement, at least – was stimulated by questions or
arguments I encountered outside of neoclassical economics.
2. How does this compare to the mainstream?
As I said, where I tend to part company with many of my colleagues is
with the policy conclusions I reach. Many of my colleagues think of me
as excessively dirigiste, or perhaps anti-market. A colleague at
Harvard’s Economics Department would greet me by saying “how is the
revolution going?” every time he saw me. A peculiar deformation of
mainstream economics is the tendency to pooh-pooh the real-world
relevance of all the theoretical reasons market fail and government
intervention is desirable.
This sometimes reaches comical proportions. You get trade theorists
who have built their entire careers on “anomalous” results who are at
the same time the greatest defenders of free trade. You get growth and
development economists whose stock in trade are models with
externalities of all kinds who are stern advocates of the Washington
Consensus. When you question these policy conclusions, you typically get
a lot of hand-waving. Well, the government is corrupt and in the
pockets of rent-seekers. It does not have enough information to
undertake the right kinds of interventions anyhow. Somehow, the minds of
these analytically sophisticated thinkers turn into mush when they are
forced to take seriously the policy implications of their own models.
So ironically, I think my heterodox approach has stronger foundations
in mainstream economic methods than the views of many of the mainstream
economists themselves.
3. Do you think that a more pluralist approach might gain traction? What factors constrain and support such a development?
It depends on what you mean by pluralism. Pluralism on methods is much
harder, and I will come back to it. Pluralism on policy is already a
reality, even within the boundaries of the existing methods, as I
indicated. There are healthy debates in the profession today on the
minimum wage, fiscal policy, financial regulation, and many other areas
too. I think many critics of the economics profession overlook these
differences, or view them as the exception rather than the rule. And
there are certainly some areas, for example international trade, where
economists’ views are much less diverse than public opinion in general.
But economics today is not a discipline that is characterized by a whole
lot of unanimity.
Now that doesn’t mean that Economics is a pluralist paradise. There are
powerful forces having to do with the sociology of the profession and
the socialization process that tend to push economists to think alike.
Most economists start graduate school not having spent much time
thinking about social problems or having studied much else besides math
and economics. The incentive and hierarchy systems tend to reward those
with the technical skills rather than interesting questions or research
agendas. An in-group versus out-group mentality develops rather early
on that pits economists against other social scientists. All economists
tend to imbue a set of values that tends to glorify the market and
demonize public action.
What probably stands out with mainstream economists is their awe of
the power of markets and their belief that the market logic will
eventually vanquish whatever obstacle is placed on its path.
As a result, economists tend to look down on other social scientists, as
those distant, less competent cousins who may ask interesting questions
sometimes but never get the answers right. Or, if their answers are
right, they are so not for the methodologically correct reasons. Even
economists who come from different intellectual traditions are typically
treated as “not real economists” or “not serious economists.”
So the hurdles for the economists that want to depart from the
conventional path are pretty high. Above all, they must play by the
methodological rules of the profession. That means using the language
of mathematics, the standard optimizing, general-quilibrium frameworks,
and the established econometric tools. They must pay their dues and
demonstrate they remain card-carrying members in good standing.
For those who, like myself, find considerable value in these
methodological predilections, these dues are worth paying. I find that
these methods keep me intellectually honest; they are a way of
convincing myself that I know what I am talking about. My attachment to
these methods has not been for instrumental reasons – that is, for
acceptance within the mainstream (although it has presumably helped – my
intellectual opponents cannot so easily dismiss me by saying “he is not
a real economist...”). But I also understand those who find mainstream
methods too constraining or unhelpful. I think they offer something of
value too, in providing a critique from outside. I often find myself in
agreement with those critics on substantive grounds, but find a lot to
criticize in their work on methodological grounds.
The criticism of methodological uniformity in Economics can also be
taken too far. Surely, the use of mathematical and statistical
techniques is not a problem per se. Such techniques simply ensure our
arguments are conceptually and empirically coherent. Yes, excessive
focus on these techniques, or the use of math just for its own sake, are
a problem – but a problem against which there is already a
counter-movement from within. In the top journals of the profession, I
would say most math-heavy papers are driven by substantive questions
rather than methods-driven concerns.
And things change. The two most exciting developments in Economics in
the last two decades are the behavioural and experimental revolutions.
The first of these has made a significant dent in the rationality
postulate of neoclassical economics, while the latter has taken the
profession in a profoundly empirical and policy-oriented direction.
These are significant changes in how one does mainstream economics, and
the fact that they have happened suggests there is room for
methodological changes. Not plurality, perhaps, but some degree of
evolution in methods. I am not necessarily a great fan of either of
these methodological innovations, but they show the profession is able
to adapt and change. Note also that both sets of new methods came from
outside Economics -- psychology and medicine, respectively. Young
economists made these methods their own, and changed the discipline from
within.
4. What lessons, if any, have been learned from your experiences challenging the conventional wisdom?
If you want to be successful as a scholar, you have one of two paths.
Either you come up with a new technique or piece of evidence to shore up
conventional wisdom. Or you challenge the conventional wisdom. The
latter is a high risk, high return strategy. It is high risk for all the
reasons I have mentioned previously. But it is high return because
anything that has turned into conventional wisdom is almost by
definition wrong, or at least, overstated. So done right, challenging
conventional wisdom is a successful research strategy that is bound to
pay off.
In my own case, every piece of conventional wisdom I challenged had
already become a caricature of what sounds economics teaches us. I
wasn’t doing anything more than reminding my colleagues about standard
economic theory and empirics. It was like pushing on an open door. I
wasn’t challenging the economics, but the sociology of the profession.
For example, when I first began to criticize the Washington Consensus, I
thought I was doing the obvious. The simple rules-of-thumb around which
the Consensus revolved had no counterpart in serious welfare economics.
Neither were they empirically well supported, in view of East Asia’s
experience with heterodox economic models. When you questioned
supporters closely, you first got some very partial economic arguments
as response, and then as a last resort some political hand-waving (e.g.,
“we need to get the government to stop doing such things, otherwise
rent-seeking will be rife…”). My argument was that we should take
economics (and political economy) more seriously than simply as rules of
thumb. Economics teaches us to think in conditional terms: different
remedies are required by different constraints. That way of thinking
naturally leads us to a contextual type of policy-making, a diagnostic
approach rather than a blueprint, kitchen-sink approach.
Similarly, when I questioned some of the excessive claims on the
benefits of globalization I was simply reminding the profession what
economics teaches. Take for example the relationship between the gains
from trade and the distributive implications of trade. To this day,
there is a tendency in the profession to overstate the first while
minimizing the second. This makes globalization look a lot better: it’s
all net gains and very little distributional costs. Yet look at the
basic models of trade theory and comparative advantage we teach in the
classroom and you can see that the net gains and the magnitudes of
redistribution are directly linked in most of these models. The larger
the net gains, the larger the redistribution. After all, the gains in
productive efficiency derive from structural change, which is a process
that inherently creates gainers (expanding sectors and the factors
employed therein) and losers (contracting sectors and the factors
employed therein). It is nonsensical to argue that the gains are large
while the amount of redistribution is small – at least in the context of
the standard models. Moreover, as trade becomes freer, the ratio of
redistribution to net gains rises. Ultimately, trying to reap the last
few dollars of efficiency gain comes at the “cost” of significant
redistribution of income. Again, standard economics.
Saying all this doesn’t necessarily make you very popular right away.
I remember well the reception I got when I presented my paper (with
Francisco Rodriguez) on the empirics of trade policy and growth. The
literature had filled up with extravagant claims about the effect of
trade liberalization on economic growth. What we showed in our paper is
that the research to date could not support those claims. Neither the
theoretical nor empirical literature indicated there is a robust,
predictable, and quantitatively large effect of trade liberalization on
growth. We were simply stating what any well-trained economist should
have known. Nevertheless, the paper was highly controversial. One of my
Harvard colleagues asked me in the Q&A session: “why are you doing
this?” It was a stunning question. It was as if knowledge of a certain
kind was dangerous.
Years earlier, when I wrote my monograph Has Globalization Gone Too
Far? I had been surprised at some of the reaction along similar lines. I
expected of course that many policy advocates would be hostile. But my
arguments were, or so I thought, based solidly on economic theory and
reasoning. A distinguished economist wrote back saying “you are giving
ammunition to the barbarians.” In other words, I had to exercise
self-censorship lest my arguments were used by protectionists! The
immediate qestion I had was why this economist thought barbarians were
only on one side of the debate. Was he unaware of how, for example,
multinational firms hijacked pro-free trade arguments to lobby for
agreements – such as intellectual property – that had nothing to do with
free trade? Why was it that the “barbarians” on one side of the issue
were inherently more dangerous than the “barbarians” on the other side?
But ultimately, the reward of challenging conventional wisdom that
has gone too far is that you are eventually proved right. The
Washington Consensus is essentially dead, replaced by a much more humble
approach that recognizes the importance of locally binding constraints.
And many of the arguments I made about the contingent nature of the
benefits from trade and financial globalization are much closer to the
intellectual mainstream today than they were at the time. I do not think
of this as a great achievement. These changes were bound to happen, and
I essentially rode the wave.
I suppose there is a lesson here for younger researchers: Identify an
intellectual consensus that has gone beyond what the theory and
empirics can support and chip away at it. But do so without departing
too much from the discipline’s accepted methods!
