• Diminishing returns to research. A core economic principle is the Law of Diminishing Returns. If you add more resources, such as labor, to fixed quantities of another resource, such as land, output eventually rises by smaller and smaller amounts. That applies — with a vengeance — to academic research. Teaching loads have fallen dramatically (although the Education Department, which probably can tell you how many Hispanic female anthropologists there are teaching in Arkansas, does not publish regular teaching-load statistics), ostensibly to allow more research. But the 50th paper on a topic seldom adds as much understanding as the first or second. Emory University’s Mark Bauerlein once showed that scholarly papers on Shakespeare averaged about 1,000 a year — three a day. Who reads them? How much does a typical paper add at the margin to the insights that Shakespeare gave us 400 years ago?
• Economics as ideology in camouflage. Economists who achieve fame for genuine intellectual insights, like Paul Krugman, sometimes then morph into ideologues — predominantly although not exclusively on the left. The leftish domination of American academia is partly explained by economics. Federal student-loan programs, state appropriations, special tax preferences and federal research-overhead funds have underwritten academic prosperity, even at so-called private schools. The leftish agenda today is one of big government; academics are rent-seekers who generally don’t bite the hand that feeds them. The problem is even worse in other “social sciences.”
• A disconnect between economic reality and public policy. Three examples come to mind. First, the Keynesian orthodoxy of fiscal stimulus of the 1950s and 1960s, with its Phillips curves and the like, was shown to be spectacularly wrongheaded. The U.S. experience of the 1970s and the Japanese “lost decade” of the 1990s are two demonstrations. Second, centrally planned authoritarian states with no private property or free markets (e.g., the former Soviet Union or North Korea) have been shown to be monumentally inefficient and not permanently sustainable. Third, nations with some free-enterprise capitalism but with growing redistributionist welfare states start stagnating economically — Europe beginning after 1970, the U.S. after 2000. Yet many economists (including at the Federal Reserve) still champion Keynesian policies and welfare-state expansions such as ObamaCare.