Retooling the Mainstream

It is my charge to comment on the importance of tool building and on how tools have been integrated into the mainstream. Put less kindly, are we up the creek with an ornate paddle? It should come as no surprise if I claim that economics in general and agricultural economics, in particular, have become highly reliant on the use of fancy tools of analysis. Stigler saw the trend in 1963 when he wrote: "Less than a century ago a treatise on economics began with a sentence such as 'Economics is a study of mankind in the ordinary business of life.' Today it will often begin, 'This unavoidably lengthy treatise is devoted to an examination of an economy in which the second derivatives of the utility function possess a finite number of discontinuities. . . . Only elementary mathematical tools such as topology will be employed, incessantly.' "(p. 94). In a quick examination of the trend, I counted the primary tools of analysis in articles published in the national agricultural economics journals for the three years 1950, 1966, and 1983. The results appear as table 1. Contrast the respective totals for articles using only English (15, 8, and 2) with those for programming and simulation models (0, 7, and 18), and the trend is manifest. Further, within each group of technical tools, the level of sophistication of course has increased. Thus, dynamic and recursive programming occurred frequently in 1983, while linear programming was the dominant programming tool in 1966. There is a hint in table 1 that the use of regression has peaked. In contrast, the enthusiasm for large-scale simulation modeling may still be on the rise, as exemplified by the recent ERS development of a large-scale food and agricultural policy simulator (Edwards). In 1950, considerable attention was paid to survey research in Agricultural Economics Research, but very little interest in the topic was otherwise evident. McCloskey (pp. 485, 514) argues that there is a strong aversion to survey research among economists, generally; there is a tendency to accept only the externally observable behavior of economic actors, and to reject the results of questionnaires and other self-descriptions. Consequently, an important source of evidence remains untapped. How is the stress on the econometric and mathematical to be evaluated? From a market perspective, it might appear eminently successful. Practitioners of the technical and econometric crafts probably achieve betterthan-average returns in their professional careers. McCloskey (p. 500) points out that Samuelson's skill at mathematics is itself an important and persuasive argument for his being accepted as an authority, even if his use of the mathematics is often pointless. But McCloskey concludes that virtuosity is itself some evidence of virtue. More generally, a growing use of mathematical techniques in our work suggests a growing demand for such practice and a supply response by practitioners adept at reading the market. But there also seems a widespread expression of disenchantment with the market's results, as illustrated by the remarks of Cochrane and of Beneke, cited by Swanson. Are there market shortfalls or failures, or unmet extra-market goals? Let me explore that question. I find several overlapping complaints in the literature of disenchantment. Tool-oriented work: (a) is hard to read and difficult to understand; (b) is not oriented to industry and policy issues; (c) is overspecialized; (d) does not exhibit enough concern about data; (e) involves questionable practice, particularly in regression analysis; (f) is not problem oriented, to the, point of posing trivial or even nonexistent problems. On assuming the editorship of the AJAE in 1978, V. James Rhodes noted complaints subsumable under the first three headings (including reports by Smith et al. and Christensen). He responded: "Members of the profession . . . must be prepared to make some investment in understanding what has become a very diverse subject matter. . . . We will publish more papers on policy and on results of Irving Hoch is a Senior Fellow, Resources for the Future, Washington, D.C.