Columns: Economic Graffiti

Columns

India Today, January 25, 1999
Jan 25, 1999

ECONOMIC GRAFFITI
This is My World

Of charlatans, mathematicians--and other economists.

By Kaushik Basu

It is no doubt a consequence of this year's Nobel Prize that I got more queries from students in India these past two months than in the entire previous year about whether they should do economics and what it takes to be an economist. My immediate reaction was, unlike physics or history or literature, economics has room for a variety of talents. Someone with scant interest in the real world but with an obsession for logic and mathematics can be an economist, as can someone with a more limited mathematical skill but with a sense of markets and finance, even someone with neither of these but a passion for history.

Maybe it is because of this ample space that the profession of economics has come to harbour more charlatans than any other profession, with the exception of second-hand car dealers. As a consequence, being an economist in today's world is a mixed blessing.

One has to just browse the new website created by Calonline (www.calonline.com) to receive letters of congratulations for Amartya Sen to appreciate this. Some have asked the new Nobel laureate to solve the problem of poverty. Others have pleaded that he do something about onion prices. Pushing "naivete" to new frontiers is the NRI from New York who, after quickly getting over with niceties like congratulating Sen, goes on to implore him to "please do something for property in Calcutta especially real estate which is very down". Alas, for the economist who can not only lower the price of onions but raise that of property.

On the other hand, for some the word "economist" is enough to raise their antennae of suspicion. Recently, while travelling in Europe, I got chatting with an Indian gentleman from England. On learning that I was an economist he looked me up and down, asked a variety of questions to check my credentials (including how I got my visa to go to the US) and then, as a sort of acid test, asked, "Have you heard of the world-famous economist Amartya Sengupta?"

I fumbled over the answer because I had not heard of any economist by that name. Indeed I felt reasonably confident that there was none. On the other hand, I had heard of the economist who I thought he thought was called Amartya Sengupta. As I pondered what constituted a truthful answer -- yes or no -- he smiled knowingly, his suspicions confirmed, and moved on.

Within economics, there are tensions between those who can do mathematics and those who cannot. This tension is captured well in a story that Amartya Sen recounted from his days at the Delhi School of Economics. The Delhi School at that time had a formidable international reputation as a centre of excellence in economic theory and mathematical economics. This was well deserved. There was Jagdish Bhagwati doing seminal work on trade; A.L. Nagar, who had done path-breaking work in some very difficult fields of econometrics, was there; as was Sukhamoy Chakravarty, who was one of the first persons using Pontryagin's mathematical principles in economics.

It was therefore not surprising that when Alexander Eckstein, the China expert, came to give a lecture at the Delhi School, he was less than fully comfortable. Perhaps for this reason when Professor Naqvi asked a convoluted question at the seminar, Eckstein apologised for not following the question and asked him to repeat it. Naqvi thought that it was his name he had failed to follow and said loudly, "K.A. Naqvi."

The discovery that such a long question could be paraphrased into something quite as pithy as this must have had a withering effect on Eckstein, as he admitted that he still could not follow. Professor Naqvi, in his usual Lucknowi style, assured him that it was quite simple: "First you take N, then A, then Q, then V, then I." All Eckstein's prejudices about the Delhi School were now confirmed. He decided to put this rally to an end and assured Naqvi that though he still did not follow him he was sure that the "formula" was profound and would no doubt think about it later.

On a more serious note, the charge against economics that it is becoming increasingly mathematical is probably false. It is in fact the economics of the 1950s and '60s that was reliant on terse mathematics. In trying to model the entire economy as a general equilibrium, economists were drawing on topology and, in particular, fixed point theorems. Also a lot of our method involved plain and simple borrowing from mathematical physics.

With the rise of game theory, this has come to an end. Economists now have a tool of analysis which is almost entirely their creation. Indeed it is the other social sciences which are now beginning to borrow this powerful tool. Game theory does require a knack for abstract reasoning but it makes less demands on prior mathematical knowledge. As some economists at Stanford have shown, this is a method which can be used to analyse even historical information. This has led to a renewed interest in economic history.

So my immediate reaction to my aspiring economists is, even on cogitation, right. There is room for a variety of talents in economics. What is important -- and this is important for all research -- is an intense curiosity and an ability to love the work as an end in itself.

The author is C. Marks professor of economics, Cornell University

Issue Contents | Write to us | Subscriptions | Syndication