The microscope of economics

Economists like to study one relationship or one mechanism at a time.  We place that relationship under a kind of microscope, and examine the possible ins and outs.  At the same time we abstract from many — indeed most — other features of the real world.

The economic method therefore is frequently misunderstood.  The "collective wisdom" of economics is not found in any single model, article, or book.  All of these present very particular microscopic views.  Rather it is the body of economics, combined with the wisdom of the other social sciences, that represents the impressive achievement.

Sadly, the microscope method opens up economics for criticism.  It is easy to look at any single model or study and find much wanting.  Economics appears unrealistic, excessively abstract, ahistorical, or simply implausible, occasionally verging on the insane.

Yes, there is much wrong with contemporary economics.  I’ll grant plenty of concessions.  Anthropology is important, economists don’t read enough, there should be more economic ethnography, and Becker’s "rotten kid theorem" is not a good model of the family. 

But at the end of the day, about half of all criticisms of economics boil down to failing to understand the microscope method. 

For the microscope analogy, I am indebted to some comments by Ben Friedman.


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