The Five Types of Economist

Yes, its been done many times before. I just had an early morning urge.

1. The Mathematical Economist

"[The mathematical economist] has 30 pages of mathematics, and at the end there emerge the assumptions he put in at the beginning."
- Voprosy Economiki 1948.

The Mathematical Economist should have been a mathematician, but he knew that he would end up teaching community college if he went that route. He also knew how to write down his assumptions (name his variables) at the top of his paper, and repeat them at the end, having done some simple calculus in between. Therefore he knew he could get a top teaching position at a good research university as an economist. The Mathematical Economist has no friends, a wife, two or three children and a bland, pasta-filled life. But he is happy, and has absolutely no idea how the economy works, which makes him smirk whenever he admits it to himself, which is rarely.

2. The Clever Tear-Down Artist

The Clever Tear-Down Artist is the loudest, if not also the most common, kind of economist. The best ones teach at Harvard and win Nobel Prizes. The Clever Tear-Down Artist spends his days writing "one-liner papers" (which are about 10-20 pages) that illustrate cleverly that (if you make certain absurd assumptions) water runs uphill, the Sun actually revolves around the Earth, and Bill Clinton was a faithful husband.

Well established facts are cleverly whisked aside to make room for much more important econospeak and charts and models. Every paper is exciting and pathbreaking, and does it all in just 12 pages! They are great for cocktail parties because they can be explained so easily and they wow the girls. This is important because the Clever Tear-Down Artist is always on a conference loop or book tour, so he finds himself at a lot of cocktail parties.

3. The Whiz-Bang Kid

The Whiz-Bang Kid is a fun breed. He isn't really an economist as much as a clever flame thrower. Unlike the Clever Tear-Down Artist, he means no harm (unless he wants to start a revolution). He isn't interested in poking holes in theory, he is interested in re-writing language. For the Whiz-Bang Kid, 10 pages should be enough to explain the origin of life, and still have space for an homage to his favorite poet. Any one of his papers would win him the Nobel Prize, except that none of them have any content. Although he is brilliant the first time you hear him, and he is clearly smart, after a while it becomes clear that he isn't really saying anything. Probably first in his class, The Whiz-Bang Kid is always chipper and has a beautiful wife. A little quirky, he works hard and everyone likes him. He goes on book tours and possibly becomes a talking head* if he strays too far into policy.

4. The Small Contributor

This breed is excruciatingly boring, which means that they could possibly die off, which would be a great relief. The Small Contributor writes 25-50 page papers offering an extremely well proven argument defending the (already accepted) theory that firms in southeast rural Thailand had seen lower demand for dyed cloth in the 1994-1998 period than in the 1998-2002 period... or at least accepted theory believes that is what this kind of economist writes about, as nobody has actually managed to stay awake through to the end of the title, let alone read a whole paper. It is well established fact that papers written by these economists are tagged "BioHazard" when they reach the peer review office, and quietly passed through without another glance. These economists are either unmarried, or have an equally dull wife, if such a thing is possible for a woman.

5. The Good Economist

...usually either is, or should be, in another department

*I have not included the Policy Wonk, but they are pretty self-explanatory. They wonk.

The Efficient Muffin Hypothesis

During this financial "crisis" and subsequent bailout, some Austrian economists have surprised me with their optimism. Essentially, they argued that the market will pull through. Even if stupidity got us into the mess, and stupidity was going to compound the mess, so long as the market is allowed to chug along we will always ultimately "grow our way out." In the end, these Austrians argued, we would end up better off after the crisis and bailouts are all over (say, a few years hence) than we were before the whole thing started. We might have been even better off had we not passed some of the stupid policies, but we would only lose growth, we would not shrink in real terms.

Austrians also talk a lot about inflationary policy, or other kinds of foolish policies that governments engage in for a short term fix, despite having bad longer term consequences, as being like a drinking binge. They then argue that you can't cure a hangover with more drinking.

Now, if original hedonistic policy is like the binge drinking of a wild night, then the morning is the time for recovery. And if, in fact, if a semblance of protection for private property rights is all it takes to "grow our way out" then we can pretty much use whatever hangover cure we want, and be alright.

We can call this the "efficient muffin hypothesis," because the muffin we eat for breakfast manages, as it breaks down, to metabolize away the worst of the negative effects of our night of drinking. This theory says that we will make it through the hangover and to complete recovery fairly quickly. We can even have a mimosa with the muffin to take the edge off.

The inefficient muffin hypothesis, then, would state that in fact any old hangover cure may not work, the effects of these policies may compound each other, and we may never recover. In this scenario, the muffin cannot purge the poison, nor can time alone, and permanent damage may have been done.

Now, if the efficient muffin hypothesis is true this has significant implications. If, so long as the market is not completely banned, the wee market left can always "grow us out" of any idiocy of government policy, then we might have to take a second look at whether these policies are so bad. A night of drinking ain't a bad thing, sometimes.