Extras: David Henderson on Economists, Nobels, Obituaries, and More

Need to know about an important economist suddenly thrust into the public’s eye? Whether it is for winning the Nobel prize or dying, there’s someone you can call. Juliette Sellgren welcomes David Henderson back to the Great Antidote for a conversation on Henderson’s appreciation for many talented economists he has covered for the Wall Street Journal and one’s he has been personally influenced by. The two also discuss Henderson’s concerns about the current state of economics. Henderson, is a research fellow at Stanford University’s Hoover Institution and also a professor of economics at the Naval Postgraduate School in Monterey, California.

You can find the podcast here: David Henderson on Economists’ Nobels, Obituaries, and More

One economist that Henderson appreciates was Robert E. Lucas, who according to Henderson “reinvented macroeconomics.” Henderson touches on the dominance of Keynesianism in macroeconomics, and how Lucas’ contribution highlighted the ability of people to learn from government actions and utilize rational expectations to make decisions. 

Both Henderson and Sellgren are fans of Elinor Ostrom’s field study on the management of commons to prevent Garrett Hardin’s Tragedy of the Commons. Henderson also shares the amusing example of armchair economists trying to think like a horse instead of observing a horse in action to make economic conclusions. Henderson speaks of the work of William Vickrey in his predictive theory to reduce traffic on toll roads—developing transmitters that can be scanned and charged systematically. I found myself, like Sellgren, both impressed and surprised at this practical application of theory from Vickrey, the winner of the 1996 Nobel Prize in economic sciences with James Mirrlees. 

Building on Henderson’s point of the overvaluation of math in economics, he and Sellgren discuss observational economics as opposed to blackboard/armchair economics. In an argument for a more balanced economics, Henderson appreciated the lessons and corrections from Armen Alchian in the preciseness of language on graded assignments, which he found very important in developing as an economist. Henderson believes that the field of economics has been going in the wrong direction for around 40 years now, with many people being driven away from the math requirements of a PhD in economics, and his example of an individual holding their nose for years to get a PhD. Henderson believes in the value of observational economics and hopes that the discipline of economics pivots from the trend of its intense partnership with mathematics. 

 

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