We noted Krugman's attack (which didn't go far enough) on the "pseudo-science" (with apologies to Larry Laudan) of macroeconomics, but now one of his targets, John Cochrane, an economist in the Finance Department at the Business School here has responded, and in terms that are not wholly, shall we say, edifying. There is a useful overview of the debate here, which notes that, "Cochrane makes the same mistake he accuses Krugman of, by caricaturing and oversimplifying Krugman's argument, and, even worse, complaining that Krugman is only interested in making personal attacks on an ever-growing 'enemies list,' while engaging in his own litany of vicious slander." The only "personal" criticism I can find in Krugman's original piece is the suggestion that some free-market utopians are motivated by the financial rewards of touting the party line. Cochrane is far worse, but readers can decide for themselves. But from a philosophical point of view, the really remarkable aspect of the Cochrane reply is the start. As this observer notes:
I am trying to read John Cochrane's comments on Paul Krugman's article on why economists got it so wrong. I tend to get upset while reading. I have managed to get through the first paragraph in which Cochrane compares Krugman to someone who denies that HIV causes AIDS and compares developments in economics to progress in the natural sciences. Now in the natural sciences, there are counter intuitive models which are consistent with all available data and have withstood many tests. Also there are once mysterious facts which are explained by theories to the satisfaction of all people familiar with the theories.
Professor Cochrane even mentions the fake Nobel Prize in Economics as a way of legitimating the epistemic credentials of the field--which, of course, was precisely the objective of those who created it. Yet this works only if you think of that Prize as on a par with the prizes in Physics and Chemistry, rather than, say, Literature or Peace, the latter two being quite explicitly ideologically motivated more often than not.
I am curious to hear how the Krugman-Cochrane dispute looks to philosophers engaged with economics. (I am not inviting a free-for-all discussion of Krugman's or Cochrane's views, there are plenty of places on the Internet to rant and rave about that.)
UPDATE: Here's a more substantive, and calmer, response to Krugman by a Minnesota economist, which suggests that Krugman has misdescribed the state of macroeconomics among its leading young practitioners.
