Comments on: Why economists should engage with ReThink UvA Staff for a New University Wed, 10 Feb 2016 23:45:11 +0000 hourly 1 By: Chris Fri, 24 Apr 2015 07:11:43 +0000 Toby,

Ok I think we can come to an agreement on the relation between economics and reform. Do you agree with these conclusions:

1. It is from the perspective of economic theory not technically necessary that we know exactly what our normative standard(s) is/are, or to agree on them, as long as we can agree on the costs and benefits that flow from it/them.
2. However, if we want to formulate costs and benefits, it is practically inescapable not to explicitly formulate some normative standard, or a number of normative standards that agree at least for the most part on those costs and benefits, simply because there are so many different people involved with so many different views. Therefore reformers should take initiative in formulating a coherent normative goal, rather than merely a negative rejection of the status quo, and a vision for the university that stems from it.
3. Economic theory cannot tell you what to do without an (implicit) normative standard.
4. There nevertheless seem to be some normative ends that people generally agree on (and we have to discuss these), and these tend to cause problems of externalities for a profit-driven university.
5. On a more general level, and assuming some common sense normative standards: democratization is not problem-free: E.g. it may cause faculty to be less prone to critical outside discipline, can cause collusive behavior among faculty at the cost of the general public and possibly the students, etc. Pseudo-scientific research could possibly get a free pass.

We talked about a number of things that is not directly related to the relation between economic theory and the reforms:

Firstly, I think you misunderstood me with regards to the economist-physicist analogy. I am not denying that factual knowledge about comets or supply and demand can result in oughts, without some normative standard. I am saying that economists like any other academic, have a responsibility to use their knowledge in public discourse about important problems such as the current. I am saying that the fact that economists have generally not engaged with ReThink, shows a lack of critical public engagement, precisely because their theories are so relevant to the problems. Of course this assumes a normative standard, but I am not denying that.

Economists are not just paid to produce value-free theories about how the economy works. They are also paid in my opinion to evaluate the state of society and to give advice on problems, using their moral compass and generally accepted normative goals. In this sense I don’t make the clear separation between economists as theory-builders, and economists as citizens. I think that to make this separation so strictly is impractical and makes it too easy for economists to work for arbitrary normative goals without having to justify this, because they can always say that “as economists” they don’t follow a normative goal. I think this is more or less the point Moritz was making, if I got it correctly.
But as far as I’m concerned, this point is secondary to the discussion, so if you don’t agree, we should probably leave it to rest.



By: Toby Thu, 23 Apr 2015 09:43:28 +0000 Chris,

1. The physicist as physicist cannot say whether deflecting the asteroid is desirable. Nothing what she knows about asteroid deflecting can tell her, as a matter of logic, whether that is desirable. For that conclusion to follow a normative premise needs to be added.

2. I did not mean to say that you need to know which normative standard is the best. If you can think of several normative standards and the same conclusion follows, then that’s great. What you need to define first, before you can identify a social benefit, however, is at least one normative standard. Whether you can identify one or you can identify several, you still need to identify a normative standard from which to evaluate the consequences in terms of costs and benefits.

3. I would argue that the fact that as a reformer you need to argue against an asymmetric burden of proof is evidence for the assertion that it is a fact of life. I also think that you implicitly agree with me here when you state that reformers have to first justify themselves. This seems to me to point to an asymmetry already.

4. I think it’s important to know who benefits and who is hurt, before taking an action. There is, of course, a limit to how precise we need to know this, I’d never deny this. There is a trade-off between acquiring this information and acting in one way or another. Inaction also being a form of action.

5. Regarding the two points made:

a. I think we do need to agree on why it is beneficial or at least not disagree when making trade-offs if it’s just you and I who should agree. With many people I don’t think it can be escaped explaining why something is beneficial and why it’s worth what’s given up.

b. I don’t think that Economics as a science can identify the problems the protestors identify without first identifying some explicit normative standard that motivates these protestors. For all we know the protestors can consciously or subconsciously be motivated not by correcting externalities, even though they derive a benefit from thinking that they do, but instead be motivated by all together different goals. Let’s not forget what Public Choice has to teach us.

6. As for various disciplines dealing with problems important to human welfare, call me sceptical, but (psuedo)scientific knowledge has been used to do things that are both good and bad depending on where you stand. Sexism, racism, (in)equality have been justified using (psuedo)scientific knowledge and a carefully hidden normative premise. Many highly educated individuals have had awful (political) views.

I am, therefore, not sure that weakening the external discipline that is imposed by having to publish is necessarily a good thing. That is after all what democratic decision-making within a university will do. It facilitates collusive behavior and allows individuals with similar political views to indulge more in that because they will be less penalized by not being able to publish for an audience of more diverse views. One might even think that this is somewhat motivates those teachers within such a seemingly relatively ideological homogenous university.

Same goes for weakening the discipline of actually teaching students something useful. If money is less allocated based on degree awarded the cost from teaching badly in terms of both content and form is also lowered. Students switching to a better taught degree because of bad teaching no longer constrain teachers as much, because their department will still roughly have the same budget. It also means that there is less money for teachers in those degrees that students really want to pursue. If we care about that at all, then that’s an important draw back of more democratic decision-making within the UvA.

By: Chris Wed, 22 Apr 2015 20:58:26 +0000 Toby,

Firstly, you say: “An economist, in her role as an economist, can’t tell you whether you should minimize cost and maximize revenue anymore than that an engineer can tell you whether or not that you should build a bridge made out of cookie dough.”
Lets say an asteroid is about to hit earth, and physicists ignored this problem. If people criticize the physicists for ignoring the problem and not engaging in the debate about how to solve this, is it reasonable for the physicist to say: ‘AS a physicist I do not prefer the comet not to hit the earth.’ Surely in this scenario you would slap the physicist in the face and tell him to start working on a comet-deflecting spaceship?
I agree that economists can make instrumental statements (IF you want X, you should do Y). To be more blunt, we can criticize the physicists who worked on building a nuclear bomb for the Nazi’s. Whether we criticize them AS physicists, or as something else, seems to me to be nothing but semantics. Concretely, it is reasonable for David to assign to economists the responsibility to use their analysis for the social benefits that he implicitly considers well accepted, as I do, rather than some narrow purpose; Just as it was reasonable to assign to physicists the responsibility to build a nuclear bomb for the Allies, rather than for the Nazi’s.

Secondly, you say: “The moment that you say something about the social benefits, you are implicitly or explicitly using a normative standard.”
No. My point was that it is possible to say something about social benefits without first fixing a normative standard. In technical terms, it is possible that the social benefit of a certain institutional framework is invariant over a number of normative standards. In other words, it could be that a democratic university structure is socially valuable according to a wide variety of standards. If this is indeed true, then we don’t need to know which normative standard is the best in order to know which institutional structure is the best.

Let me make it plausible that a democratic university structure is indeed socially more valuable than the current, without fixing a normative standard. We know that there are disagreements over what constitutes a good society, in a number of ways. Some people think that the best thing we can do now to improve society is to tackle racism; others think we should focus on sexism; others think we should focus on poverty; others on conflict and war; others on inequality. We do not know which of these things is ultimately more important for human wellbeing and therefore we do not know, or at least do not agree, on what our normative goal in this sense should be. But we do know that the various disciplines like philosophy and sociology can deal with them, and that taking them into account into the decision making will be more effective than allocating funds on the basis of degrees per euro invested. Of course there are normative goals that such a system would not promote more effectively, such as the goal of maximizing university profits. The central point though is that we can draw conclusions about the social value of a form of government of the university, without first fixing our general normative end.

Thirdly, you say: “The existence of a social benefit that is not realized does not necessarily justify change.”
Obviously, yes. This is another way of saying we have to do a pro’s-con’s analysis. I’ll go into this.

Fourthly, you say: “the asymmetric burden of proof […] for me is a fact of life. […] I don’t see how it could be any other way. […] You’ll have to convince those who are quite content with the status quo.”
This asymmetric burden of proof is not a fact of life. Those people who are content with the status quo, their confidence in it should be shaken by the recognition that there is no good justification for the status quo, should it not? The asymmetric demand on reformers to justify themselves obfuscates, obscures the fact that the status quo has no good justification. I am willing to concede that reformers should make the first move in justifying themselves, if you at least acknowledge that this not be used as an excuse not to draw attention to the lack of a justification for the current system. This is what many have been doing, and what David has been trying to formulate using (neoclassical) economic concepts. It shouldn’t be a demand that we first propose something new, before criticizing the current system.

Fifthly, you say: “who should be the beneficiaries of the university. If you argue that “teaching people to think critically is a social benefit” then you have to answer the question as to whom it benefits.”
As a first sketch of an answer, I would say that the benefits of a society trained in critical thinking are too diffuse and indirect to list. Our political process will work more effectively at solving problems (generally); social dialogue is smoother and more effective. It is hard to single out a class of people who benefit from this, and to what extent. Why do you desire to know –who- benefits? Don’t we merely need to know whether it will likely benefit society as a whole? Is your demand not unreasonable? Please explain.

Let me scramble these remarks, and formulate two general points.
Firstly, there is a cost-benefit analysis as you say. We don’t need to fully agree on a General Grand Purpose of the University (a normative end), in order to agree on the rough outline of these costs and benefits. The costs of universities are measured simply by the subsidies and tuition fees that we have to pay.
The benefits are difficult to measure (the world is complex), so we will not fully agree on them even if we have the same normative standards by which to judge them. Nevertheless we can say something about those benefits. We generally agree that university education has effects on society as a whole that go beyond the production of university degrees (I assume you agree at least that there are such benefits?). Among these benefits are the creation of a critically thinking citizenry, and a set of diverse perspectives (i.e. philosophers, anthropologists, etc,). Obviously, the word “benefit” is meaningless without some normative end. But we don’t need to agree on exactly why these are beneficial, as long as we agree on that they are beneficial. We can then weigh whether we think that these benefits are worth the possible decreased return on capital caused by a more democratic university.
This will inevitably be an ‘intuitive’ assessment, just as the utility-maximizing consumer’s decision to buy pizza rather than movies is an intuitive assessment.

Secondly, David’s original post seemed to me to –assume- a certain set of values, namely that we care about scientific progress, etc. His point was that “neoclassical economics” is not in tension with, does not contradict, the criticisms of the protesters. He criticized the idea that many people seem to have that economics, or economic language, intrinsically favors “rendementsdenken”/profit-seeking. David argued that neoclassical economics in fact identifies the problems with universities that the protesters identify, and that they wrongly sometimes attribute this to “economic thinking”. I’m sure you do agree with this point, leaving aside whether the proposed reforms would be an improvement?



By: Toby Tue, 21 Apr 2015 10:14:28 +0000 Lest I be misunderstood on #4: I am not in any way happy with the status quo of how universities are organized or how society more generally is organized. I just happen to see it as that the burden is on me to propose something different and convince others if I want matters to change. Part of that job is to clearly formulate a normative standard and convince others that this is the right standard to evaluate the status quo and propose a change.

Who should benefit? Are they benefiting as much as they could? Can we, and if so, how can we get more benefits to them? These are the questions that require an answer. Economists can only help with the answers to the second and third question. This is where economists can contribute as economists. I hope that this answers your question?

By: Toby Tue, 21 Apr 2015 09:49:07 +0000 Chris, let me just make a few points in response.

1. I don’t agree that economists, as economists, prefer one end to another. Economics can tell you something about whether a means is an appropriate means to the end that is sought, the same way that an engineer can tell you that a bridge made out of cookie dough to connect two motorways over water will collapse. An economist, in her role as an economist, can’t tell you whether you should minimize cost and maximize revenue anymore than that an engineer can tell you whether or not that you should build a bridge made out of cookie dough. Both can only inform you of the consequences in terms of what you value based on what their discipline teaches. The choice is all yours.

2. The moment that you say something about the social benefits, you are implicitly or explicitly using a normative standard. For example, if Alice takes a cookie from Bob and you say that Alice should have the cookie, then you are applying a normative standard. You prefer that the cookie is allocated to Alice instead of to Bob. Why you prefer that I don’t know, but all I ask for is that the standard that you use is made explicit.

See also #1: an economist cannot tell you whether a means is an appropriate one to achieve a certain end without knowing the end that you are aiming at.

3. The existence of a social benefit that is not realized does not necessarily justify change. It could very well be that the social benefit requires that we give up too much of the other things that we value. For example, there is a rock at the bottom of the ocean that I would be very happy to have. This, however, does not justify – to me – the expenditure I would have to incur to get that rock. I’d much rather use the same resources to travel to Paris and drink a coffee in front of the Opera there. This is also why it’s important to formulate or make explicit what normative end is pursued: it’s otherwise very difficult to figure out whether the benefits weigh up against what has to be given up.

4. You are quite right to recognize that there is no argument made for the asymmetric burden of proof. For me this is a fact of life as much as that the sun rises in the east and sets in the west. I don’t see how it could be any other way. The status quo is such, a statement is made that it should change, naturally the question arises as to why? Without there is just one side stating something without the other side knowing what to respond to. It seems to me to be a pre-condition for a dialogue.

As a purely practical matter if you want the status quo to change you’ll have to find some way to move from where we are today to where you want to be tomorrow. You’ll have to convince those who are quite content with the status quo or don’t know what alternatives there are to it. This, as far as I can tell, has always been the job of reformers everywhere. You can of course always ask the question, but as a reformer you’ll have to convince others to move to where you want to be tomorrow.

5. As a final point I’d like to return to the question that I asked earlier of who should be the benificiaries of the university. If you argue that “teaching people to think critically is a social benefit” then you have to answer the question as to whom it benefits. This goes towards formulating what your normative standard is. Who benefits from the “cookie” of critical thought? Once you have answered that question, then it becomes possible to analyze the inadequacies of the current system and figure out whether and where to move next.

By: Chris Tue, 21 Apr 2015 09:05:31 +0000 Nima, Hugo, K,

I agree that authority arguments should not be used, but I have not heard Toby use any. He criticised Nima for using incoherent and meaningless language.

Nor, by the way, do I recognize that economists use authority arguments more so than other social scientists.

But let’s please focus this discussion. Please formulate the exact value laden assumptions that Toby makes, and engage with his argument.

By: Chris Tue, 21 Apr 2015 09:00:21 +0000 Nima,

The problem with your post as far as I’m concerned is that you took Toby’s words and transferred them to a completely different language game. In other words, you ascribed a meaning to Toby’s words that he did not remotely intend, and then you started a conversation about a topic and in a language game wholly unrelated to what Toby was talking about. Toby, like myself, also happens to consider this language to be unproductive. But even if you don’t agree with that, you have to concede that you were not engaging in any way with Toby’s arguments.

Toby and Moritz,

I think you are talking past each other, as there seem to me to be some subtle differences in interpretation. I also think the debate is moving too much away from the original question.

Let me try to pull the debate to the core issue.
The question as I see it is: How can economic analysis contribute to formulating the grievances of the protesters into a coherent vision for a governance structure of the university that is socially more valuable?

Toby’s question/critique about this is: We cannot derive an ought from an is; so 1) by what normative standard do we judge whether such a governance structure is socially more valuable? 2) given such a normative standard, how do we know that it actually achieves this? Without answering these questions, kicking against the doors of the CvB is purposeless.

Moritz’ criticism of this critique is: Conceding that we cannot derive an ought from an is, economists seem to be willing to accept the normative standards of managers (minimize expenditures, maximize revenues), while they seem to be neutral to the normative standards of sociologists, and philosophers, etc.
Toby argues that this still does not answer his original question/critique.

Let me address both of these points.
Again, the question is, how can economic analysis be used to formulate a vision for a governance structure that is socially more valuable than the current.
Firstly, in order to use economic analysis, we need not fully agree on our normative end before using economic tools; we need to merely be able to say – something – about the social benefits of universities that are not internalized, and make a case that these social benefits can be realized in the proposed governance structure (the more decentralized/democratized one), and assess to what extent this will create other costs.
In fact, one of the problems of universities is that it is difficult to know what exactly the benefits are, as I argued earlier, so to demand that we know the benefits beforehand is unreasonable.
In other words, Toby, you demand that we know beforehand what the normative end is, without arguing that knowing this is necessary for using economic analysis.

Secondly, we need to look at what is minimally necessary to apply economic theory to assess which governance structure produces the most social value. You demand that we formulate first – a single – normative end that we have to maximize. I don’t see at all how this is necessary to apply economic theory, or do I misunderstand you?
We can simply say that we want to maximize “social welfare”, and argue that there are a number of benefits of universities, many of which vague and unknown: for example, teaching people to think critically is a social benefit; having diverse perspectives on society from different disciplines is a social benefit; non-monetizable knowledge produced by sociologists and philosophers is a social benefit.
We don’t need to agree on a single normative end before knowing that these are social benefits. And ss long as we accept that they are social benefits, we can use economic analysis to evaluate the governance of the university.

Thirdly, I have to agree with an underlying point Moritz makes. Toby, you say that “Of course there is an asymmetric burden of proof placed on the reformers, otherwise it wouldn’t be called reform.” I have trouble recognizing an argument here, but I think you would agree there is none?
This really I think is a very problematic statement. You are implying that the proponents of the current system have no obligation to justify their system. Do you think that as soon as someone becomes the status quo, he loses this obligation?
What normative end does the current system have? Is that a good normative end? It seems to me that the end that the current system promotes is to produce as many graduates as possible at the lowest cost, and to increase the ranking of the university in the international lists. Where are the arguments that this is a good end?



By: K. Tue, 21 Apr 2015 08:59:33 +0000 Dear all, Dear Hugo,

I fully agree with Hugo. Economists should stop using authority arguments and do an effort to engage in an honest debate with people who do not subscribe to the value-laden assumptions which their theories are based upon. Thank you, Hugo, for pointing this out!

By: K. Tue, 21 Apr 2015 08:59:33 +0000 Dear all, Dear Hugo,

I fully agree with Hugo. Economists should stop using authority arguments and do an effort to engage in an honest debate with people who do not subscribe to the value-laden assumptions which their theories are based upon. Thank you, Hugo, for pointing this out!

By: Hugo Tue, 21 Apr 2015 08:38:02 +0000 Dear all,

Nima’s post seems fine to me, isn’t the problem that he’a arguining more from a meta-perspective, that is philosophy/sociology/political economy? If I’m right, could the neoclassical economists please stop using authority arguments and try to understand his position (and argue against it if they think it’s so wrong) as he has tried to understand your arguments and contribute to this debate?

All I’ve read so far is “wrong/incoherent/gibberish/lacking basic understanding of scientific concepts” without explicitly referring to his post. Doesn’t convince me.