Thursday, July 24, 2014

The guy who beat Eric Cantor penned a scathing, seemingly unpublished book about the economics profession

David Brat. David Brat

House Majority Leader Eric Cantor just lost a historic primary race — to an economist. Prof. David Brat chairs the Department of Business and Economics at Randolph-Macon College, a liberal arts school in Ashland, Virginia. Vox read over some of his academic research, and it helps give you a sense of what the politician at the center of tonight's political earthquake believes.

Brat doesn't just have a PhD in economics; he also has a Master of Divinity in Theology from Princeton Theological Seminary. His academic interests are similarly eclectic; they range from the business climate in Virginia to test scores in Eastern Europe to Ayn Rand.

Two main themes emerged in Brat's work: why some countries are rich and others are poor, and the relationship between ethics and economics.

For instance, take Brat's paper "Economic Growth and Institutions: The Rise and Fall of the Protestant Ethic?" Here, Brat makes the argument (amusingly citing the liberal economist Brad DeLong) that the spread of Protestantism in Europe was a key cause of European nations being wealthier than other countries. "Give me a country in 1600 that had a Protestant led contest for religious and political power," he writes, "and I will show you a country that is rich today."

In "Cross-Country R&D and Growth: Variations on a Theme of Mankiw-Romer-Weil," Brat and a co-author argue that countries with stronger domestic research and development bases are likely to be wealthier (though research spilling over from one country to another can narrow the gap). In a second co-authored paper, he suggested that countries that remain democracies for longer periods of time tend to experience somewhat higher levels of economic growth.

His papers on ethics and economics are quite different. Take what appears to be an unpublished book (it's listed on his website, but not his CV) designed for students, The Philosophy of Economics: A History of Science, Method and Ethics. Gone are the mathematical formulas and specific theses about growth of his more classic economic papers.

Rather, Brat's ambition is more sweeping. "I do have an agenda," he writes. "To illustrate, by the internal logic of economics alone, that the dominant methodology in economics is in serious question, if not dead." By "dominant logic," Brat appears to be referring to the idea that economics is a science — one dominated by attempts to demonstrate and verify, using methods like statistical regression, theories that accurately predict how economies work.

Interestingly, that means harsh criticism of conservative icon Milton Friedman, who, for Brat, serves as the principal advocate of the idea that economics should be about theory construction. Brat counters that "the best way to understand economics is by asking economists to explain what they are doing and how they are doing it, and then examine their claims."

It's not one hundred percent clear what that means, but one thing Brat clearly wants to bring to bear is the role of "values" in economics. Brat seems to believe that most economists are motivated by philosophy rather than science: they're secretly utilitarians who believe that the goal of public policy is to produce the greatest good for the greatest number.

He thinks this leads them to wrongly assert that their preferred policies are "scientifically" the best policies, when in reality they're just the policies that a utilitarian would say are the best. "Economists from the beginning to the end, have engaged in normative, ethical and moral arguments which diverge greatly from the work of the 'true' science which they espouse," Brat writes.

This may be why he's interested in other ethical systems, like Ayn Rand's teachings. Brat told National Review's Betsy Woodruff that ""while he isn't a Randian, he has been influenced by Atlas Shrugged and appreciates Rand's case for human freedom and free markets." He may see these beliefs as alternative to a consensus in the economics profession he sees as dishonest and morally flawed.

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