The Primacy of Economics: An Explanation of the Comparative Success of Economics in the Social Sciences

Demsetz, Harold, Economic Inquiry

I

The strong export surplus economics maintains in its trade in ideas and methods with the other social sciences is an important indicator of the success of economics. Not much has been said about the source of this success, but it has been attributed largely to advantages offered to other social sciences by the economics tool kit. Thus, Gary Becker, who has earned Commander-in-Chief ranking in the EEF (Economics Expeditionary Forces), attributes the interdisciplinary influence of economics to our relentless and unflinching application of "The combined assumptions of maximizing behavior, market equilibrium, and stable preferences..." (Becker [1976]). This view, but with a different emphasis, is shared in by Hirshleifer [1985], my distinguished colleague, who leads an active EEF group now reconnoitering sociobiology:

What gives economics its imperialist invasive power is that our analytical categories - scarcity, cost, preferences, opportunities, etc. - are truly universal in applicability. Even more important is our structured organization of these concepts into the distinct yet intertwined processes of optimization on the individual decision level and equilibrium on the social level of analysis. (p. 53)

The emphasis here is on the broad scope of phenomena that can be explained with our tool kit. Such breadth suggests the possibility of unifying the social sciences in an economics-led hegemony.

Brief statements such as these cannot be taken as adequate representations of full views, but there is a disposition among most economists to accept the interdisciplinary influence of economics as a measure of its success and to identify its tool kit as the source in this success. The most important exception is R. H. Coase [1977], who doubts that the interdisciplinary influence of economics will continue. He believes the economics tool kit is easily mastered by practitioners of other social sciences when they find it useful. As Coase judges the situation, a sustained influence from economics requires that economics and the other social sciences share interests in the same problems.

The nub of the disagreement between Coase and those, like Becker and Hirshleifer, who remain optimistic about a continuing strong influence from economics, turns on two issues that are not discussed explicitly. One relates to the definition of a "problem." Those who are optimistic seem to be distinguishing between problems according to whether their solutions do or do not depend importantly on scarcity and maximizing behavior. Interpreted this way, many problems across the social sciences are of the same type. Coase, on the other hand, distinguishes between problems according to differences in the factual knowledge needed to understand them. For Coase, understanding the firm is a different problem from understanding the marriage relationship because factual knowledge about one does not transfer to the other. For Becker, the essential similarity between these problems rests in utility maximization subject to constraints.

This difference in interpretation raises a second issue, one that is more substantive. Coase's view is that the tools of one social science discipline, in this case economics, are easily learned by practitioners of another, but that factual knowledge is not. Those optimistic about the interdisciplinary influence of economics implicitly have the view that mastering the tools of economics is more difficult than Coase presumes; repeated practice in their use is needed to become their master. It is difficult to judge which side has the best case. I am even puzzled as to how to define a researcher's discipline if he or she is trained in the tools of one social science and applies them to problems in another. One possibility is to determine whether the researcher's work appears in economics journals or in the journals of other social science disciplines. I am most familiar with interactive work between law and economics. Persons working in this interdisciplinary area but who were trained initially in economics seem to be publishing disproportionately in law journals. This would seem to mean that they are mastering the facts of rules of law and of the cases that help determine these; if true, this would seem to support the view of optimists rather than that of Coase. On the other hand, economists in law schools are being replaced rapidly by the increasing number of law professors who have been trained in the tools of economics, and this supports Coase's view.

The disagreement we have been discussing is relevant to the success of economics if this is measured by the interdisciplinary influence. The criterion of success adopted by the present paper differs from this. Economics may be judged the more successful social science because it has explained phenomena within its traditional boundaries better than the other social sciences have explained phenomena within their respective traditional boundaries. The primacy of economics may be established in this sense even if economics had never influenced other social sciences.

The relevance of this second notion of success can be illustrated by referring again to the question of interdisciplinary influence. There is undeniable truth in Becker's notion that we economists are much more prone to use our tools to reformulate and investigate problems in other disciplines than practitioners in these disciplines are prone to extend the use of their tools to economics, but why are we more confident than other social scientists? The answer, I believe, is that economists have been more successful in dealing with the traditional problems of their own discipline than other social scientists have been with the problems in their own disciplines, and, so, we are led to a source of primacy different from interdisciplinary influence - success within the traditional boundaries of a discipline. Success breeds confidence, and sometimes over-confidence.

A similar question can be raised about Hirshleifer's explanation of the success of economics - that our analytical categories, scarcity, cost, preferences, opportunities, are truly universal in applicability. If this is so, why have these categories emerged from the study of economic behavior and not from the study of behavior in the other social sciences? Political science need not have waited for Buchanan and Tullock's Calculus of Consent [1962] before applying individualistic utility maximization to political problems. Becker's Treatise on the Family [1981] need not have preceded …

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Publication information: Article title: The Primacy of Economics: An Explanation of the Comparative Success of Economics in the Social Sciences. Contributors: Demsetz, Harold - Author. Journal title: Economic Inquiry. Volume: 35. Issue: 1 Publication date: January 1997. Page number: 1+. © 2003 Western Economic Association International. COPYRIGHT 1997 Gale Group.

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