With Tyson’s Appointment to Economic Chair, a Harvest of Sour Grapes

President Clinton’s appointment of Laura D’Andrea Tyson as chair of his Council of Economic Advisers has drawn scorn in the press over the past month. Since Tyson is a noted Berkeley economist, this carping and back-biting seems noteworthy. I find it offensive.

What gives?

The President’s Council of Economic Advisers has traditionally counseled the White House about the economy’s performance and the impact of government economic policies. Tyson’s appointment as chair was announced as part of President Clinton’s team of principal economic officials, including secretary of the Treasury, director of the Office of Management and Budget and head of the new National Economic Council at the White House.

The ink had scarcely dried on the press releases before many leading economists began airing their displeasure with Tyson’s surprise selection. The content and tone of a front-page “news” story in the New York Times gives the flavor of Tyson’s bad press.

The news peg was the unofficial report that Alan Blinder, a leading macroeconomist at Princeton, would also be named as a member of the CEA under Tyson. The bulk of the story referred not to Blinder, however, but to the relief that many economists would apparently feel if someone with Blinder’s reputation joined the Council.

“Some economists have criticized Ms. Tyson’s appointment,” the story noted in its second paragraph, “arguing that her specialty . . . has not given her the broad skills needed by a chairman of the council.” One leading economist was quoted as concluding that Blinder would “provide the necessary analytical skills that Laura Tyson lacks.”

Citing only economists critical of Tyson, the story further noted that “she was publicly criticized by other economists as not only lacking the necessary qualifications for the job but also as favoring managed trade and government support for key American industries. Neither view is popular among most mainstream academic economists, who generally prefer a minimal government role in the economy. This agreement has helped to fuel the criticism of Tyson,” several economists--who insisted that they not be named--said in interviews.

It would appear that there are four reasons for the bashing of Tyson, all of which strike me as suspect.

First, Tyson is criticized because she lacks “analytical skills.” In fact, her Ph.D. in economics comes from the Massachusetts Institute of Technology, probably the most prestigious and rigorous graduate school in economics in the world at the time she earned her degree. She can model mathematically, and she can estimate econometrically. She has “analytical skills.”

Rather, the real thrust of this criticism appears to involve a distaste for her methodological orientation. Among mainstream macroeconomists these days, there is virtually universal consensus that one should work with formal mathematical models of individuals’ economic behaviors--models relying on highly simplified assumptions about how individuals function in the economy and how the economy itself is constructed.

Many other economists, Tyson and myself among them, are skeptical of the usefulness of such modeling. Some important insights can be gleaned from this kind of analysis, we would argue, but other complementary methods are also useful and necessary. In this regard, Tyson’s critics are effectively asserting that the mainstream’s preferred methods should have hegemony over all others. It is not obvious that returns to their analytic strategy are so smashing as to warrant its axiomatic preeminence.

Second, as the above quotes from the New York Times story illustrate, Tyson is clearly out of favor because she does not subscribe to the mainstream’s dogged insistence on “free trade” policies in the international arena, believing instead that the government should occasionally--if not frequently--intervene to help firms and industries gain strategic advantage in international competition.

The mainstream’s insistence that all key economic policy advisers share their ideological commitment to free trade is outlandish.

In the modern world of many countries and fragmented international authority, no one actually practices “free trade” anymore. The United States has relied less than many other advanced economies on strategic government intervention, and it is not at all far-fetched to argue that our global competitive position has eroded in part precisely because the U.S. government has provided so little help to firms and industries.

Tyson and Robert Reich, another key Clinton economic adviser, have forcefully argued that the U.S. economy requires structural change and that the government should help promote it. If relative U.S. economic performance over the last 15 years to some degree represents a test of the prevailing bias toward free trade, then we should welcome Tyson’s interest in charting another course.

Third, Tyson’s appointment has been regarded not only with surprise but also with disapproval because she does not rank very high in the profession’s “pecking order,” as one critic in the New York Times story called it. But this strict hierarchy of prestige rankings--capped by those who have received the Nobel prize in economics--is not necessarily based on anything but conformity to the mainstream’s preferred perspectives. Galileo didn’t rank very high on the pre-Copernican pecking order. It is reasonable to argue that neither the mainstream’s methods nor its views are incontrovertibly superior to alternative approaches to economic analysis and policy. If so, we should be wary of letting the profession’s pecking order serve as a kind of screening filter for key government economic appointments.

Fourth, I cannot escape the suspicion that these recent criticisms are laced with a virulent strain of sexism. The mainstream of the economics profession operates like a men’s club, extremely wary of admitting women to its inner sanctums.

A recent survey of the 30 top economics departments in the country, ranked by the mainstream’s conventional rankings, found that only 19 of 572 full tenured professors in those departments were women, accounting for only 3% of the sample. The culture in economics values mathematical economics more highly than other tools, and I am convinced that there remains a prejudice among top male economists that women are not tough or sharp enough to differentiate and integrate with the best of them.

The criticisms of Tyson seem to bear out this prejudice. What the critics “really were saying,” one senior female economist told a New York Times reporter, “is that women are not as good at serious economics as men are.”

In short, as one top MIT professor candidly admitted in a recent interview, “economists think they have a God-given right to powerful positions in government.”

Personally, I don’t think that white male mainstream economists have such a great track record in helping chart government economic policy. I respect Laura Tyson as an economist, and I welcome her appointment as a breath of fresh air in the upper echelons of government economic policy-making.