## The politics of economic and statistical models

Following up on our recent discussion of the problems of considering utility theory as a foundation for economic analysis (which in turn was a reprise of this post from last September), somebody named Mark pointed me to a 2007 article by Luigino Bruni and Robert Sugden, “The road not taken: How psychology was removed from economics, and how it might be brought back,” which begins:

This article explores parallels between the debate prompted by Pareto’s reformulation of choice theory at the beginning of the twentieth century and current controversies about the status of behavioural economics. Before Pareto’s reformulation, neoclassical economics was based on theoretical and experimental psychology, as behavioural economics now is. Current discovered preference defences of rational-choice theory echo arguments made by Pareto. Both treat economics as a separate science of rational choice, independent of psychology. Both confront two fundamental problems: to find a defensible definition of the domain of economics, and to justify the assumption that preferences are consistent and stable.

Bruni and Sugden explain it all very clearly. To put it another way, basing economics on a science of rational choice, independent of psychology, makes about as much sense as basing chemistry on a science of chemical bonding, independent of physics.

At the same time, I don’t think economics is a subset of psychology, any more than psychology is a subset of biology, or chemistry a subset of physics. Supply and demand, prices, inflation, unemployment, and all the rest: these can be usefully studied without direct relevance to psychology research. At some point, the psychology does have to come in—just as the physics comes in to chemistry—but a lot of econ can be done at a more direct level, which is fine.

The political angle

What I want to write about here, though, is the connection between political views and attitudes toward economic foundations.

Many of the foundationalists and supporters of utility theory are politically conservative while its opponents tend to be on the left. Center-left economists such as Paul Krugman and Mark Thoma, along with economists further to the left such as John Quiggin and Peter Dorman, are skeptical of utility-based microfoundations (and, in the case of Dorman, this skepticism is long-standing, predating current economic debates by decades). On the other side, right-leaning economists such as Gary Becker rely heavily on utility theory and typically are negative about the use in economics of psychological measurements such as in happiness research. (See also this summary by Noah Smith.) And it goes back earlier than that: John von Neumann, axiomatizer of utility theory, was conservative too (and stood out from among most of his peers in this way).

This correlation between political attitude and intellectual orientation makes sense: rational choice is related to the idea that people are making the best choices for themselves, which in turn is related to the conservative ideas of minimal taxation and redistribution. This is not a strict logical relation—it could well be that redistribution could improve the outcomes from individuals’ rational decisions—but I see the connection. The liberal argues that the government should do X (for example, provide free preschool), the conservative retorts that parents who don’t send their kids to preschool are making an informed choice and the government shouldn’t interfere. Etc.

This all seems natural—but I could also imagine the correlation going the other way. A key theme of conservative thinking, now and in the past, is skepticism of systematizers, utopians, and “isms” in general. It would make a lot of sense to me if a liberal such as Paul Krugman (following the example of his liberal and technocratic forebear, Paul Samuelson) to lean heavily on a rational-actor model (perhaps tweaked a bit via prospect theory etc), and conversely for a conservative to distrust the clean simplicity of utility theory and, as a conservative, feel more comfortable with the real-world ambiguities of decision making as revealed by psychology research. Similarly, I could well imagine a pragmatic conservative resisting the rationalists’ backstop claim that, even if people are not individually rational, in aggregate they act as if they are behaving according to a utility function.

Recall my favorite quote of G. K. Chesterton, from the very end of his celebrated book on George Bernard Shaw:

I know it is all very strange. From the height of eight hundred years ago, or of eight hundred years hence, our age must look incredibly odd. We call the twelfth century ascetic. We call our own time hedonist and full of praise and pleasure. But in the ascetic age the love of life was evident and enormous, so that it had to be restrained. In a hedonist age pleasure has always sunk low, so that it had to be encouraged. How high the sea of human happiness rose in the Middle Ages, we now only know by the colossal walls that that they built to keep it in bounds. How low human happiness sank in the twentieth century our children will only know by these extraordinary modern books, which tell people that it is a duty to be cheerful and that life is not so bad after all. Humanity never produces optimists till it has ceased to produce happy men. It is strange to be obliged to impose a holiday like a fast, and to drive men to a banquet with spears. But this shall be written of our time: that when the spirit who denies beseiged the last citadel, blaspheming life itself, there were some, there was one especially, whose voice was heard and whose spear was never broken.

Chesterton was a Catholic conservative of the early 1900s, Shaw was a socialist, and both were famous for expressing their ideas in paradox.

Shaw, the leftist, associated progress with material happiness, while Chesterton, the rightist, said things were better in the Middle Ages. Nowadays, the debates usually go in the other directions, with people on the left being less positive about material progress and people on the right being more likely to be techno-optimists (setting aside politically-loaded topics such as the theory of evolution).

On to statistics

The other funny thing to me is that, in statistics, it seems to be considered conservative to be skeptical of models, to go for approaches that make minimal assumptions. And the hard-line econometricians hate models and want to go nonparametric all the way—even though, from my perspective, they give out the same vibe as the hard-line economic theorists who defend utility theory.

1. Chris says:

I think that Yes Minister showed conclusively the nature of the rationality assumption:

http://www.imdb.com/character/ch0030015/quotes
“That’s one of those irregular verbs, isn’t it. I have an independent mind, you are an eccentric, he is round the twist.”

liberals believe financiers to be clouded with irrationality; conservatives believe the poor to be.

• Chris says:

ie — it’s always the other party’s supporters that are irredeemably irrational.

2. Jonathan says:

Look, if we assume that the rational-choice model is not correct, how do you correct for that. The issue isn’t that it has not been refuted (to a substantial degree). The problem is how do you correct for that. Has there been a science that has reached that sort of identity crisis on a large scale? You can’t exactly prevent the momentum of graduating PhD learning this theory, so it perpetuates itself.

• Andrew says:

Jonathan:

My recommendation is that economists proceed using a two-pronged strategy: first, they can continue doing what they’ve always been doing with models of supply, demand, prices, unemployment, inflation, exchange rates, etc. Second, if they are interested in studying motivation they can work with the latest models from psychology rather than isolating themselves and making silly claims saying that psychology doesn’t matter once money comes into play.

One difficulty here is that economists have high status so there’s not so much motivation for them to be flexible. One advantage of being in the relatively low-status fields of statistics and political science is that I don’t have to apologize for using ideas from other fields.

3. John Quiggin says:

As Corey Robin pointed out recently (in my interpretation, anyway) there’s nothing conservative about “conservative” politics. Most political “conservatives”, like Chesterton are reactionaries of one kind or another. Chicago-school economics are rationalists, deriving their political views on the basis of deduction from “self-evident” axioms.

• Andrew says:

John:

I’m using “conservative” and “liberal” in the current U.S. context (and I’m focusing on attitudes on economics rather than on social or foreign policy).

4. Manoel Galdino says:

Hayek fits your idea of “the correlation going the other way”. He didn’t believe in rational microfoundation and turned to psychology later on in his career. His argument, among others, was that the market is the result of a complex process and individuals have only local knowledge of things and the market help them to make better decisions. That’s why the government shouldn’t intervene in general: they don’t have the local knowledge that individuals have and will make bad decisions (inefficient ones).

best,
Manoel

5. John Mashey says:

Nice to see John Q show up, it is a small world.
So, I have a question for all of you folks, which considers economists, political scientists, (sociologists, psychologists.)

I have tentative anecdotal observations, and would love to know if there any good studies:

1) Some social scientists seem interested in studying how things really work and publishing them.

2) Some find things that lead them to advocacy and wanting to affect policy.

3) Some seem mostly to want to drive policy as though they were political decision makers, and somehow any studies support their views.

I assume that people who mostly publish in peer-reviewed journals lean towards 1) and those who mostly write OpEds, etc more in 3), but maybe that’s wrong.

6. A. Zarkov says:

“John von Neumann, axiomatizer of utility theory, was conservative too (and stood out from among most of his peers in this way).”

Yes he stood out. With the possible exception of Kurt Godel, von Neumann had no peers. Eugene Wigner said,

“I have known a great many intelligent people in my life. I knew Planck, von Laue and Heisenberg. Paul Dirac was my brother in law; Leo Szilard and Edward Teller have been among my closest friends; and Albert Einstein was a good friend, too. But none of them had a mind as quick and acute as Jansci [John] von Neumann. I have often remarked this in the presence of those men and no one ever disputed me.” … “Only he was fully awake” (ht to Steve Hsu).

Edward Teller (a man not given to compliments) said something like, “There was only one real genius at Los Alamos, von Neumann.”

Von Nuemann’s famous paper “A Model of General Economic Equilibrium” (The Review of Economic Studies, Vol. 13 No. 1 pp 1-9) is perhaps the most penetrating, insightful, and fundamental paper in modern economics.

As Steve Keen points out, neoclassical economics suffers from fundamental contradictions that most academic economists simply ignore. They think private debt doesn’t matter because one man’s debt is another man’s asset. Keen shows that the secondary derivative of total debt drives demand. Krugman and other neoclassical adherents failed to see the Great Recession and the international banking crisis coming. Only 12 out of some 12,000 professional economists predicted what was obvious if your brain isn’t addled by neoclassical thinking. Keen predicted the crisis in 2005, and saw it coming in the mid 1990s. How often do guys like Krugman have to be proved wrong, before we hit the mute button? All this applies to the conservatives as well including the Austrian School.

I personally saw what was coming. I sold my house at the peak and went out of the market at the end of 2007. If you regularly read Krugman and others of his ilk and believed his crap, you would have lost a lot of money, as many people did.

7. DavidN says:

Andrew,

I think you need to distinguish between micro and macroeconomics. There may be an ideological bias for/against microfoundations at the macro level but that is not the case at micro level. Don’t quote me on this but I would hazard a guess all the economists you’ve listed find utility based microeconomics as foundational.

8. “On the other side, right-leaning economists such as Gary Becker rely heavily on utility theory and typically are negative about the use in economics of psychological measurements such as in happiness research.”

Maybe that’s changed. Here’s Becker in 2007, talking about the pink elephant of economics, positional/context/prestige externalities:

The connection between income and happiness is by no means trivial, however. Two critical factors come into play. First, beyond subsistence level, the positive effect of a permanent change
in income tends to be short lived. We rapidly become accustomed to a more expensive lifestyle.
A common name for this feature is habit formation. Second, the satisfaction derived from
a given level of income is sharply dependent on how it compares to the income of peers. See,
for example, Andrew B. Abel (1990), Becker (1996), and William A. Brock and Steven
N. Durlauf (2001) for a demonstration of the influence of habits and peer comparisons over
behavior and see Shane Frederick and George Loewenstein (1999) for a review of the underlying psychology.

– “Habits, Peers, and Happiness: An Evolutionary Perspective”, at: http://www.jstor.org/stable/30034500

“Formally, we argue that a happiness function that combines strong habits with strong peer comparisons can help account for several empirical findings and, simultaneously, has a biological foundation.”

“Traditionally, utility functions were assumed to depend on only the absolute level of current consumption, with no reference to past and peer levels. However, a large body of work now shows that our tastes are strongly influenced by our personal histories and social environment (e.g., Robert H. Frank 1985; Abel 1990; Becker 1996; and Brock and Durlauf 2001). Indeed, the explanatory power of economic models is greatly enhanced when including simple forms of per-sonal and social capital in the utility function. In this way, otherwise puzzling phenomena-such as social influences on price, persistent habitual behavior, and neighborhood segregation-can be better accounted for.

Consistent with these conclusions, the anal-ysis of happiness surveys has delivered two systematic results concerning the relationship between income and self-reported happiness (for a detailed review, see Andrew E. Clark, Paul Frijters, and Michael A. Shields 2006). First, as suggested by common wisdom, income is strongly habit forming. While changes in income have a reliable impact on reported hap-piness, this impact is mostly, if not entirely, short lived. Second, subjects also exhibit strong positional concerns. Their reports of happiness are highly dependent on the difference between their current income and the average income of an appropriately defined reference group (e.g., individuals with similar demographic characteristics).”

• Andrew says:

That’s good news if Becker is backing off. First, because he has prestige, second because I think these scientific debates might go better if they weren’t so entangled with left/right politics.

9. AssociationHabits, Peers, and Happiness: An Evolutionary PerspectiveAuthor(s): Luis Rayo and Gary S. BeckerReviewed work(s):Source: The American Economic Review, Vol. 97, No. 2 (May, 2007), pp. 487-491

10. Antonio Pedro says:

“hard-line econometricians hate models and want to go nonparametric all the way” I am curious about these people: I rarely see them in political science and I would love to see some examples of this position. Cheers, Antonio.

• Andrew says:

Antonio:

See the P.S. here, for example.

11. Is there any decent evidence for this amazing assertion that life was far happier (although certainly shorter) in the middle ages?

• Andrew says:

I dunno. Any Chesterton scholars out there??

• Roberto says:

I’m not a scholar, but I’m a big GKC fan, so I’ll take a shot.

I think his point was that people in the Middle Ages had greater zest for life, whereas for his contemporaries it was only too easy to feel bored and unsatisfied for vague reasons. This is still a preety strong assertion, but one that seems easier to back up — eg. by recourse to popular poetry, drama and music — than “life was happier in the Middle Ages.”

I’d also take issue with Andrew’s characterization of GKC as a reactionary plain and simple, but I’ll leave that for another time.

• Andrew says:

Hey—where did I characterize Chesterton as “a reactionary plain and simple”?

• Roberto says:

Sorry, my bad. I could swear that you’d called him a reactionary in a comment, but apparently no one did. My mind is playing tricks on me…

12. I really don’t like the quote if there’s no evidence to back it up. It can be terribly misleading in a harmful direction. From what I’ve seen of the happiness research, happiness is much worse at or near the subsistence level, and improves greatly with basic and secure nutrition, health, and comforts.

• Andrew says:

RIchard:

Chesterton was an artist, journalist, and provocateur, not a social scientist. I wasn’t quoting him because I think he has any evidence; my point was that Chesterton represents an old-time strain of conservatism that favored spiritual over material progress, in contrast to the modern era in which conservatives tend to focus on GDP while liberals talk about there being something more than material values.

• Understood, plus I see that Chesterton lived 1874-1936, a very harsh time in the industrial revolution, sweat shops, very long hours, hard monotonous work. From there I could see thinking that people in the middle ages, with limited work they could do on their small plot of land, were happier.

basing economics on a science of rational choice, independent of psychology, makes about as much sense as basing chemistry on a science of chemical bonding, independent of physics.

This seems a strange thing to say, since chemistry was based on a theory of chemical bonds, independent of physics, until quantum mechanics was developed. And it still isn’t practical to predict complex chemical reactions by just cranking through the quantum mechanics.

So I think the big question is whether psychology is currently up to the task, or whether basing economics on present-day psychology would be like trying to base chemistry on Aristotelian physics.

• Andrew says:

I think it was fine to base chemistry on a theory of chemical bonds, way back before quantum mechanics was around. Similarly, I think it was fine for economists to work with the utility model in the 1940s and take it as far as they could go with it. Today, though, physics has advanced a lot and so has psychology. Meanwhile, even very good economists can waste their time on silliness such as risk aversion, where utility theorists have tied themselves into knots to try to explain that most people don’t like to gamble, even for stakes of $10 or$100 where any reasonable utility function would show essentially no curvature. Utility theory is playing the role of Aristotelian physics. As noted above, I think it doesn’t help that these scientific debates get lined up with political disagreements.

14. Anon says:

“Many of the foundationalists and supporters of utility theory are politically conservative while its opponents tend to be on the left.” I’m surprised John Q. didn’t point how grossly inaccurate this is. For example, in a 1980 paper in the AMERICAN ECONOMIC REVIEW titled ‘Scale Economies, Product Differentiation, and the Pattern of Trade,’ one sees the following representative consumer setup around equation (1) on p. 950: ‘There are assumed to be a large number of potential goods, all of which enter symmetrically into demand. Specifically, we assume that all individuals in the economy have the same utility function,

(1) U = sum_i c_i^\theta,

where c_i is consumption of the ith good.’ Looks pretty ‘foundationalist,’ yes? So who’s paper is this? The non-politically conservative Paul Krugman; this paper was noted in the Nobel Prize committee’s ‘Scientific Background’ statement.

• Andrew says:

Anon:

Yah, but that was the old, centrist Democrat Paul Krugman, not the more recent radicalized version. The within-Krugman correlation between political attitude and position on microfoundation is entirely consistent with my story.

• Anon says:

Andrew:

Do you mean to imply that today’s PK would disavow his 1980 AER piece, all else equal, because of its reliance on ‘utility theory’? Really?

To get to the ‘recent radicalized version,’ consider the Krugman & Wells principles text. Their treatment of ‘supply and demand’ is standard meat & potatoes stuff. And where do you think all of those demand curves come from? It’s elementary econ, but in case you don’t know: (1) the market demand curve is obtained by aggregating across the individual consumer demand curves; and (2) and the individual consumer demand curves are derived from ‘utility maximization.’ So the modern lefty Krugman peddles ‘utility theory’ in his undergraduate textbook. All of this is consistent with what DavidN wrote above.

Accordingly, your ‘Many of the foundationalists and supporters of utility theory are politically conservative while its opponents tend to be on the left’ phrasing is way off the mark. Perhaps you don’t quite understand what the ‘microfoundations of macro’ question is about. Let’s suppose, then, that you meant to say something like, ‘Those who support a microfoundations for macro approach are politically conservative while its opponents tend to be on the left.’ Empirically, this would also be highly inaccurate. Many of those who PK labels ‘freshwater’ economists (BTW, after the modeling movement led by your now Columbia colleague Michael Woodford, the late 1970s freshwater/saltwater distinction no longer has much meaning) are, politically, large “D” democrats. See, for example:

Sargent (then at Minnesota), along with Lucas (Chicago), was one of the original ‘freshwater’ economists. On his blog, Stephen Williamson has often described this large “D” democrat phenomenon among the modern macro tribe PK continuously ridicules.

• Andrew says:

Anon:

You write:

(1) the market demand curve is obtained by aggregating across the individual consumer demand curves; and (2) and the individual consumer demand curves are derived from ‘utility maximization.’

I buy (1) but not (2). Or, to be more precise, I think (1), or something like (1), is necessary—aggregate demand is indeed an aggregate of individual demand—but, no, it’s not necessary to set this up as utility maximization. You can do this in terms of utility maximization, sometimes this will work ok, sometimes not, but it’s not necessary.

Regarding Krugman, I don’t know how he feals about his 1980 AER piece, all I know is that the current, radical, Krugman is negative on microfoundations, whereas the earlier, centrist, Krugman was perhaps less bothered by them.

• Jonathan (a different one) says:

But if you don’t buy (2), then you can’t do any kind of welfare analysis. The integral under the demand curve (roughly) is consumer welfare, but only assuming 92). (Actually you have to assume some more, but Bobby Willig showed the reasonability of those assumptions 40 years ago.) Again, without stressing psychology here, in passing from X to X’ along a demand curve, we are tracing out the aggregate marginal willingness to pay, which, by (1) is the sum of individual’s marginal williness to pay. What underlies a marginal willingness to pay actual money which could be turned into any other thing which would satisfy the unlimited scope of human desires other than some kind of utility… even one defined self-referentially?

• Anon says:

Anon:

I would think Krugman feels quite fine about his 1980 AER piece; I don’t communicate with him, but casual empiricism is certainly consistent with this claim. It was one of the most important articles in international trade theory written in the post-WWII period, and one of the key reasons he received a Nobel prize.

My commenting has been based not on what you ‘buy’ regarding the role of utility theory, but has focused on (1) what PK thinks & does regarding it and (2) how you are misrepresenting this state of affairs. As an example, I referred you to the plane vanilla ‘consumer theory’ stuff in his principle text, written by the modern lefty PK. All those ‘market demand curves’ are based on utility theory; it’s really not an opinion. This demonstrates that PK 2.0 indeed uses ‘utility theory.’ But these ‘market demand curves’ are different creatures from what he and lots of others call an ‘aggregate demand curve.’ Your description of all this is way off; it suggests that you don’t understand what the ‘microfoundations of macro’ question is. If you did, it would seem you’d be more careful in what you write.

Further, for an empirical political scientist, your description of the ‘politics’ of economists (or just macroeconomists) is disturbingly inaccurate, and is consistent, e.g., with how lots of non-thinking conservative and libertarian types (e.g., Tyler Cowen) initially celebrated the recent Nobels given to Sargent and Sims as some sort of victory for the non-Keynesian camp; the NYT piece I linked to shows how silly all of this was. For that matter, it’s similar to how lots of liberals thought the economics Nobel committee was leaning left when they named Krugman (and plenty of cheerleaders thought it had to do with his NYT columns). The data are out there, but it seems you’re not familiar with what they say.

• Anon says:

Andrew: Sorry about the typo in my ‘March 9, 2012 at 12:53 pm’ comment, i.e., it should be addressed to ‘Andrew,’ not ‘Anon.’

• Anon says:

Andrew:

As a final note, please consider this 2010 paper by Eggertsson and Krugman:

In particular, check out the bottom of p. 4, i.e., the bit about the representative agents having log utility functions. Now go back and reconsider what you wrote about the ‘foundationalists,’ etc.

• Andrew says:

Anon:

Regarding the within-Krugman analysis, I’m talking about the correlation and you’re talking about the level. You’re arguing that Krugman was and remains supportive of microfoundations, I’m saying that Krugman’s support of microfoundations is lower than it used to be. Hence my point on the within-Krugman correlation, which is consistent with your point on Krugman’s general level.

15. [...] just wanted to point out this comment of mine which applies the principles of analysis of variance to an informal model of political [...]

16. AA says:

Becker has been interested in work that is in some sense behavioral economics since the 1960′s. See “Irrational Behavior and Economic Theory,” JPE, 1962 (http://www.jstor.org/stable/1827018). Among other things, he shows to derive the law of demand without assuming utility maximization. He still teaches this paper in his graduate microeconomics class.

I think it’s not correct to say that Becker is generally opposed to incorporating non-rational behavior into economic models, but he does believe that utility maximization is a useful tool (even if not perfectly accurate) in a wide range of microeconomic work. Which is a pretty mainstream position in the economics community.

17. Kevin says:

Perhaps above all else, microfoundations are a way to discipline the science. We care about causal relationships, and microfoundations are the best way to tease them out. Of course we should (and do) work on incorporating modern psychology into utility functions, but it is difficult because there are lots of pyschological ‘biases’ to choose from. Ergo, it is difficult to maintain discipline.

A great example of the usefulness of microfoundations is in the field of industrial organization (IO). A bunch of guys at Harvard had a paradigm of ‘structure-conduct-performance.’ They would craft a story whereby ‘structures’ (like number of sellers in a market, cost structure, etc) lead to varying firm behavior (conduct), which led to varying firm profits (performance). The problem is that the ‘structures’ are largely endogenous, so it was very difficult to make causal inferences. Sooo a bunch of guys at UChicago came along and insisted on modeling everything from microfoundations. Presto, we went from loose conjectures to precise causation where the assumptions are right in front of you.

Jean Tirole says it much better in the intro to his text on IO, but this is the main argument. Microfoundations force us to be disciplined.

18. [...] The politics of economic and statistical models – Andrew Gelman [...]

19. Rick in Chicago says:

I hope I understand you (or somebody) correctly. I am removed from foundational considerations of economics, so I don’t really understand the issue of “microfoundations.” So I understand you with a semi-analogy.
Aristotle’s physics, which is geocentric, explains that everything seeks its own place. For terrestrial objects, the proper place is down, and celestial objects the proper place is up. That is why things fall down. It is exactly the same as assuming that the rock maximizes, or seeks to maximize, its utility by seeking a lower place.
No one uses Aristotle’s physics anymore. It is more than slightly bizarre for moderns to assume that a rock has a utility function; it’s archaic, at best, to think that a rock acts to maximize its utility.
With humans, the science of psychology once assumed utility maximization (not sure when, maybe in the mid 19th century with JS Mill), and on that basis made some progress. But the science of psychology now incorporates much more than utility maximization. Economics, however, hasn’t moved much beyond the assumption of utility maximization.

20. Steve McFarlane says:

“I could also imagine the correlation going the other way. A key theme of conservative thinking, now and in the past, is skepticism of systematizers, utopians, and “isms” in general. It would make a lot of sense to me if a liberal such as Paul Krugman (following the example of his liberal and technocratic forebear, Paul Samuelson) to lean heavily on a rational-actor model (perhaps tweaked a bit via prospect theory etc), and conversely for a conservative to distrust the clean simplicity of utility theory and, as a conservative, feel more comfortable with the real-world ambiguities of decision making as revealed by psychology research.”

Not sure about this. I admit that Burkeans sometimes expound on such themes, but there is plenty of evidence that conservatives are repulsed by ambiguity and would prefer simplicity. For instance, Jost and co.: http://psycnet.apa.org/journals/bul/129/3/339/

21. ben says:

Just want to point out a bit of a misunderstanding. You cite Thoma, Krugman, and Sethi as agreeing with your basic point, but all three in the examples you cite are not talking about the same thing you are. They are questioning importance of microfoundations to macroeconomics. Whereas you are questioning the importance of standard economic theory to applied empirical economics.

Kevin above is right on the money in saying that microfoundations (or more accurately in terms of what you’re talking about, economic theory) are a way to discipline the science. This is a powerful thing, and I believe exactly why economics has high status as you point out and other fields- you mention poli sci and statistics but I think sociology is the more apt comparison here- have low status. Because their microfoundations are so flexible, the debates in these disciplines very often come down to people just shouting at each other. This is a lot less true in economics, where (almost) everyone is operating from the same starting point.

22. Haynes Goddard says:

Andrew said: “You can do this in terms of utility maximization, sometimes this will work ok, sometimes not . . .”

What do you have in mind about the “sometimes not”?

23. [...] The politics of economic and statistical models « Statistical Modeling, Causal Inference, and Socia… [...]