Nobel Prize winning economist Gary Becker on the difficulty of sociology

The authors of Freakonomics and SuperFreakonomics are primarily interested in economics but they do make occasional mention of sociology. Here is one example involving the Nobel Prize winning economist Gary Becker describing his own life (page 15 of the deluxe edition):

“I began to lost interest in economics during my senior (third) year because it did not seem to deal with important social problems. I contemplated transferring to sociology but found that subject too difficult Fortunately, I decided to go to the University of Chicago for graduate work in economics. My first encounter in 1951 with Milton Friedman’s course on microeconomics renewed my excitement.”

Two things stand out:

1. Sociology is about social problems. This is a long-standing part of the discipline and the reason many introductory level college classes in sociology are about social problems. At the same time, this tends to portray sociology as more as an activist discipline – which it may be, depending on who you talk to – and less of a scientific enterprise.

2. Though he doesn’t say why, Becker suggests sociology was “too difficult.” From a smart guy, this is a nice hint that sociology isn’t just common sense. Society, groups, interactions, and individuals influencing each other leads to a complex set of theories and methods.

Don’t blame Black Friday and Thanksgiving shopping; they just expose the consumerist system

As crowds gathered to shop on Thanksgiving and into Black Friday, there has been plenty of backlash from those who think this violates a sacred family holiday to those who don’t like that relatively low-paid retail workers have to work another day to those who bemoan the lengths Americans will go to fight over some doorbusters. All of this might be true but I think it misses the point: these two days simply lay bare American consumerism. In a similar way that Walmart and McDonald’s tend to take the brunt of complaints about big box stores and fast food restaurants, Black Friday and shopping on Thanksgiving share a similar fate: they simply make real what is true about Americans and what they want.

There is a whole system at work here. It involves buying single-family homes, talk about the American Dream (equated with acquiring certain items), dreams about scientific progress and mechanical abilities such that life will be easier, liking having choices more than enjoying the goods themselves, acquiring stuff, and an economy and financial system dependent on average citizens continuing to buy beyond subsistence items. This system involves some great advances put to interesting uses, things like the assembly line, the internal combustion engine, transistors and semiconductors, the mass production of houses, the rise of marketing, and mass media.

The lesson is that hardly any day all year long is sacrosanct any longer; more than family togetherness, more than patriotism, perhaps more than the Super Bowl (which combines all of these things in a different way), Americans enjoy shopping, good deals, and consumption. It is competitive and alluring and our collective retirement accounts may all very well depend on this behavior.

Krugman: prediction problems in economics due to the “sociology of economics”

Looking at the predictive abilities of macroeconomics, Paul Krugman suggests there is an issue with the “sociology of economics”:

So, let’s grant that economics as practiced doesn’t look like a science. But that’s not because the subject is inherently unsuited to the scientific method. Sure, it’s highly imperfect — it’s a complex area, and our understanding is in its early stages. And sure, the economy itself changes over time, so that what was true 75 years ago may not be true today — although what really impresses you if you study macro, in particular, is the continuity, so that Bagehot and Wicksell and Irving Fisher and, of course, Keynes remain quite relevant today.

No, the problem lies not in the inherent unsuitability of economics for scientific thinking as in the sociology of the economics profession — a profession that somehow, at least in macro, has ceased rewarding research that produces successful predictions and rewards research that fits preconceptions and uses hard math instead.

Why has the sociology of economics gone so wrong? I’m not completely sure — and I’ll reserve my random thoughts for another occasion.

This is an occasional discussion in social sciences like economics or sociology: how much are they really like a science in the sense of making testable predictions (not about the natural world but for social behavior) versus whether they are more interpretive. I’m not surprised Krugman takes this stance but it is interesting that he says the issue is within the discipline itself for rewarding the wrong things. If this is the case, what could be done to reward successful predictions? At this point, Krugman is suggesting a problem without offering much of a solution. As a number of people, like Nassim Taleb and Nate Silver, have noted in recent years, making predictions is quite difficult, requires a more humble approach, and requires particular methodological and statistical approaches.

Freakonomics.com readers vote to eliminate sociology

Responding to the question “Which social science should die?”, the readers of Freakonomics.com voted out sociology:

As you can see from the chart below, nearly 50 percent believed that college/university presidents should eliminate sociology. Nearly 30 percent thought poli sci should be shuttered. [Editor’s note: it is perhaps not surprising that Freakonomics readers wouldn’t vote to eliminate economics.]

The rationales varied. Many felt that sociology had become too insular and out of touch. Some argued that political science had become a sub-field of economics, and a good old-fashioned “M&A” could occur. Others said “market” discipline should be enforced: that is, save the departments that bring in the most cash to the university.  And many of you argued that the tradition of the disciplines was being ignored — e.g., sociology used to promote reform, but is no longer organized around such pragmatic tasks—and so it makes sense to close them for good.

One possible explanation: economists and sociologists don’t always get along.

I would be interested to see a larger poll of academics about this. Could this be related at all to the size of relative departments?

British economics writer: economics has failed but are the sociologists ready to step up?

This is an interesting viewpoint: “Mainstream economic models have been discredited. But why aren’t political scientists and sociologists offering an alternative view?” Here is some of the discussion about how sociology has failed to seize this opportunity:

Perhaps you have more faith in the sociologists. Take a peek at the website for the British Sociological Association. Scroll through thepress-released research, and you will not come across anything that deals with the banking crash. Instead in April 2010, amid the biggest sociological event in decades, the BSA put out a notice titled: “Older bodybuilders can change young people’s view of the over-60s, research says.”

Or why not do the experiment I tried this weekend: go to three of the main academic journals in sociology, where the most noteworthy research is collected, and search the abstracts for the terms “finance” or “economy” or “markets” since the start of the last decade.

Comb through the results for articles dealing with the financial crisis in even the most tangential sense. I found nine in the American Sociological Review, three in Sociology (“the UK’s premier sociology journal”), and one in the British Journal of Sociology. Look at those numbers, and remember that the BSA has 2,500 members – yet this is the best they could do…

It wasn’t always like this. One way of characterising what has happened in America and Britain over the past three decades is that people at the top have skimmed off increasing amounts of the money made by their corporations and societies. That’s a phenomenon well covered by earlier generations of sociologists, whether it’s Marx with his study of primitive accumulation, or the American C Wright Mills and his classic The Power Elite, or France’s Pierre Bourdieu…

Nor is there much encouragement to engage with public life. Because that’s what’s really missing from the other social sciences. When an entire discipline does what the sociologists did at their conference last week and devotes as much time to discussing the holistic massage industry (“using a Foucauldian lens”) as to analysing financiers, they’re never going to challenge the dominance of mainstream economics. And it’s hard to believe they really want to.

Ouch.

I can imagine some sociologists might argue that the world is much bigger than markets and economics. They would not be wrong. At this same time, this critique could be viewed as a call to action: does sociology offer a compelling alternative way to view the world? How can we account for both economic and social life?

I will say that there does appear to be growing interest in economic sociology. This may not be reflected in these particular journals but more sociologists are looking at the social and cultural dimensions of economics. As noted, this was a key concern of a number of foundational sociologists, observers who noticed that industrialization was changing the social world. I wonder how many sociologists would view studying the economic realm as something “dirty” (too many ties to capitalism, too messy, too close to economics, etc.) or “uninteresting” (not what really motivates them to research, teach, and engage in public life).

The role of emotions in buying a McMansion

“Financial journalist and author” Jean Chatzky discusses her rules about money and hints that buying a McMansion and working with money in general is complicated by emotions:

Have money rules changed with the recession?

I don’t know that the money rules have changed, but I think the recession has made people realize the importance of some of the money rules. For example, Money Rule #26 is “Just because someone will lend it to you, doesn’t mean you should borrow it.” I think it’s the lesson of the housing crisis. We over-borrowed. We took out bigger mortgages than we could truly afford because the banks were willing to give it to us. Every unfurnished McMansion proves that point. For everybody who’s ever felt house-poor or student-loan poor or credit-card poor, the recession has hammered that home.

Why do people tend to overcomplicate money?

It’s really emotional. If I had a bottle of champagne and I opened it with a group of friends, there would be this feeling that we should divvy it up fairly. But if I said, “I have some extra money,” people start making value judgments. There’s morality involved with how we divvy up the money.

Combined with that is the fact that we’re not taught about money as kids or in the schools. There’s not room for it in the curriculum. Getting financial literacy into every school in the country is a very important thing to do, but it’s an uphill battle. The combination of those two things makes many of us feel insecure when it comes to making the right decisions about our money, whether we’re spending it, saving it, or investing it.

Her rules seem meant to limit the emotional side of money. If you have rules to follow, you can sidestep the emotional aspects. While the rules may be helpful, this is a good reminder that economic activity is often emotional. We often talk as if humans make decisions purely for economic reasons when the real story is much more complicated. Stock trading and investing in stocks, purchasing consumer goods, and saving money are laden with emotions.

So what emotions lead to purchasing a McMansion? I haven’t seen an academic study that addresses this. However, critics of McMansions have made a number of arguments about why people buy McMansions: they want to impress other people, they have little sense of style or design, they have money to burn, they don’t realize they can get by with less space, they are unaware of how others might negatively view their home, and they are obsessed with getting a deal without thinking about quality. Critics generally argue that McMansions are attempts at displaying a particular status to others and this causes the buyer to overlook some concerns to which they should pay attention.

I’m guessing that McMansion purchasers wouldn’t give the reasons that critics suggest. At the same time, purchasing a home, usually the biggest purchase of someone’s life, is full of emotions. Buying a dwelling is one thing but when you add up a mortgage plus the idealization of a home in the American Dream and it becomes much more than that.

Glaeser argues “desegregation is unsung US success story”

Residential segregation is a persistent feature of American life (a few earlier posts here, here, and here). Yet, economist Edward Glaeser argues that things are improving on this front:

As the figure shows, as of 1970, almost 80 percent of either whites or blacks would have had to move neighborhoods in order to achieve an even distribution of whites and blacks within the average metropolitan area. By 1990, that dissimilarity measure had dropped to 66 percent; it is 54 percent today. We are very far from living in a perfectly integrated society, but our nation is far more integrated than it was 40 years ago.

The progress over the last decade has been particularly dramatic. Every one of the 10 largest metropolitan areas experienced drops in both dissimilarity and isolation of 3.6 points or more. The isolation index is below 45 percent in every one of those 10 largest areas, except for Chicago. Long among the most segregated places in America, the Windy City has experienced a particularly dramatic decline in segregation since 2000.

The general decline in segregation has also been accompanied by a change in its nature. Before 1968, segregation is best understood as the result of hard, if often informal, barriers against black mobility. There were neighborhoods that were simply off-limits. The effect was that blacks paid more for housing, especially in more segregated cities…

After 1970, however, that pricing pattern switched. By 1990, blacks were paying less for housing than whites, especially in more segregated metropolitan areas. This switch can be explained if segregation, post-1970, reflects white preferences rather than barriers preventing black mobility. If the segregation that remains is the result of whites liking to live in primarily white neighborhoods, then we should expect whites to pay a price for limiting their own choices, and that is exactly what the data show.

The decline in segregation hasn’t been uniform across the black population. Much of the decline reflects relatively well- educated black Americans moving into white districts. While that freedom is something to celebrate, the exodus of the more skilled left many urban neighborhoods behind, and the effect of growing up in a segregated community appears to have gotten worse over time.

A few things to note here:

1. Glaeser ends by suggesting this is a triumph for everyone. While the numbers overall may have improved, there is still a lot of work to do – as he notes, cities like Chicago still have higher levels of segregation and only certain segments of the black population have had the options to move to whiter areas. On one hand, you want to celebrate progress but on the other hand, you don’t want to minimize the fact that this is still a major issue. The issue of where people (can) live is tied to a lot of other concerns including school performance, wealth, and life chances.

2. Glaeser suggests the change in recent decades is due to white preferences rather than the presence of real barriers. Two thoughts on this:

a. Really? There are no barriers for lower-income or non-white residents to move into wealthier areas? Why do we still then have cases about exclusionary zoning (such as an example in Westchester County)? Why there are still big debates about constructing affordable housing (an example from Winnetka, Illinois)?

b. Glaeser seems to suggest these white preferences are okay since they pay for this privilege. This is the appropriate penalty for essentially restricting the abilities of others to live in certain places? I bet a lot of sociologists might have some complaints about this – this is the key difference between de jure and de facto segregation and both have negative outcomes.

Another story on Glaeser’s study has a response from a sociologist who suggests some caution:

“We’re nowhere near the end of segregation,” says Brown University sociologist John Logan, who was not involved in the study. “There are still no signs of whites moving into what were previously all-minority neighborhoods, and there is still considerable white abandonment of mixed areas.”

3. Glaeser also seems to be only looking at the black/white divide in where people live, the widest measure. I would be interested to hear his explanations for the differences between whites and other groups.