Sep 3, 2013

Coase on Entrepreneurship and more: An Interview

Excerpts from this interesting interview with Ronald Coase, by Siri Terjesen & Ning Wang:

Blackboard Economics
He has consistently criticized economists for practicing ‘‘blackboard economics,’’ which has turned economics into a theory-driven subject, detached from the ordinary business of life . . .
Playing Chess against himself
As the only child of his parents, Coase remembers entertaining himself, for example, playing chess himself with his left hand against his right hand. Coase was always interested in academic learning, and was largely left alone in pursuing his own avid curiosity about the world, with little guidance or pressure from his parents . . .
Going to the field
I spent the academic year 1931–32 on my Cassel Travelling Scholarship in the United States studying the structure of American industries, with the aim of discovering why industries were organized in different ways . . . 
What is the most important character
I also think kindness is a most important character. There are a lot of people in the world who are not so kind, so it is important to be kind. . .
What should we teach students
I don’t think we should impose ideas onto them. I think the best way to teach students is to teach them how to educate themselves . . . 
On quantitative research 
When I started my career, economics was a small profession, at least in Britain. Almost all of us knew each other. One result of this close and small academic community is that scholars’ contribution to the field was not mainly judged by their publications. The push for publications did not come close to what it is now. There were not many academic journals at the time so that everyone could be well informed of what was going on in the whole field by reading the few journals available. Today, there are hundreds of academic journals and no one can possibly read all the articles even if he confines himself to the few leading journals. The field is expanded, and the professional community is much enlarged. But I doubt whether that enormous quantitative growth has translated into a better understanding of how the economy works. Another significant change is that research has become almost exclusively quantitative. If you look at any journal in economics today, it is hard to find a single empirical article without some statistical analysis. With increasing access to computing power and aggregated statistical data, economists can easily mine data to find statistical results that fit in their theory. As I said many years ago, nature will always confess if you torture data enough. Things have become worse since then. Today, empirical research is not driven by interesting problems, but by the availability of data. Articles are judged first and foremost by technical sophistication.
Professor Coase died yesterday at 102

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