Not long ago, many political scientists suffered from economics envy. Some still do. They view economics as the queen of the social sciences, claiming that it is “scientific,” like physics. Physicists and other natural scientists spend most of their time trying to explain phenomena, but non-behavioral micro-economists spend most of their time on mathematical proofs and econometric tests of a priori theories based on intuitive plausibility or principles of “rational action.”Footnote ¹ Being “scientific” it was alleged, meant that economics could access objective knowledge, knowledge that was said to be true independent of time, place, and circumstance. Robert Bates called on political scientists to do the same by arguing that they should be in search of “lawful regularities which … must not be context bound” (Bates Reference Bates1997b).Footnote ²

Economics abruptly fell from grace somewhere between late 2007 and the fall of 2008, when the U.S. stock market crashed and the U.S. and European economies fell into the worst recession since the great depression of 1929 (Sum et al. Reference Sum, Khatiwada, McLaughlin and Palma2009).

Two of the high priests of market infallibility, Alan Greenspan and Eugene Fama, responded quite differently to the revelation that the emperor had no clothes. Greenspan, who served five terms over 18 years (1987–2006) as Chairman of the Federal Reserve Board and whom Bob Woodward had christened the “Maestro” for presiding over an 18-year boom economy (Woodward Reference Woodward2000), admitted in October 2008 testimony before Congress that he “found a flaw in the model … that defines how the world works” (PBS NewsHour 2008). He had, he said, put “too much faith in the self-correcting power of free markets” (Andrews Reference Andrews2008).

Eugene Fama, the other high priest of market infallibility, a professor in the University of Chicago's economics department and its business school, spoke for the “Chicago School” of economics founded by Milton Friedman. Fama's signature concept was the efficient market hypothesis, or “EMH.” Unlike Greenspan, Fama adamantly stuck to his guns in the face of the financial crisis. He told John Cassidy in an interview in the New Yorker that he didn't “know what a credit bubble means. I don't even know what a bubble means” (Cassidy Reference Cassidy2010). According to Fama's circular reasoning, bubbles do not exist because they are not predictable, but they cannot be predicted unless there is a consensus among investors that a bubble is in progress, a condition that would burst the bubble (Cassidy Reference Cassidy2010). Historically, voices that say there is a bubble have not been heard by investors.Footnote ³ For Fama, the credit and housing bubbles that preceded the 2008 recession were illusions. People who could not pay their mortgages and faced foreclosure were victims of the recession, not the credit and housing bubbles.

For many years, Keynes's view that financial markets were “casinos” where bets were made with other people's money had credence among economists, but by the new millennium, Fama's efficient market theory—which held that financial markets always get asset prices right—reigned supreme. When reminded by John Cassidy that his erstwhile University of Chicago colleague and federal judge Richard Posner said that the financial crisis and recession presented a serious challenge to Chicago School economics, Fama replied, “He's not an economist. He's an expert on law and economics. We are talking macroeconomics and finance. That is not his area” (Cassidy Reference Cassidy2010).

Comparing the two high priests of market infallibility, Alan Greenspan and Eugene Fama, we are reminded of a thought by Leo Tolstoy: “The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him” (qtd. in Lewis Reference Lewis2010).

We now turn to the science trope embedded in the economics trope that has beguiled political scientists. Deirdre McCloskey has shown how and the degree to which economists lack reflexivity. They are unaware of how much they rely on rhetorical devices—not the least of which is the ethos of “The Scientist”—to legitimize what they have to say (McCloskey Reference McCloskey1990, 57). “The Scientist” ethos justifies conceits such as the idea that scientific knowledge is the only form of knowledge, and that knowledge about human behavior is transparently accessible, unmediated, and unrepresented.

David Laitin, a leader of the effort among political scientists to create a surrogate for microeconomics in the field, rational choice, which was threatening to become hegemonic in political science publications, hiring, and promotion, assumed the mantle of “The Scientist” to discredit Perestroikans, whom he called “Luddites” because they were said to fear modern science.Footnote ⁴ Laitin dismissed a Perestroikan call for pluralism in forms of knowledge and methodologies that was framed as “let a hundred flowers bloom, let a hundred schools of thought contend” (Rudolph Reference Rudolph and Monroe2005) by claiming that the epistemologies of area studies in comparative politics, realism in international relations, and qualitative methods across the subfields were “threats to scientific progress” (Laitin Reference Laitin and Monroe2005, 131). According to Laitin, “A scientific frame would lead us to expect that [such fallacious theories] will become defunct … [and] should no longer be cultivated within the discipline” (Reference Laitin and Monroe2005, 130).Footnote ⁵

In a letter in the next issue of the University of Chicago Magazine, Roger Myerson, a professor of economics at the University of Chicago, sought to save his colleagues in the political science department from their Perestroikan folly by informing them that “great departments of political science like Chicago are increasingly requiring that their students must master the fundamentals of statistics and game theory” (Myerson Reference Myerson2003).

We close our account of economics' fall from grace by suggesting that political scientists who want to be “scientific” recognize that the Newtonian or physics model of science is not the only model of science. Indeed, Sven Steinmo recently argued that what political scientists study is not like physics, and that the social world does not work according to the same laws and principles as the physical world. Following a spurious idea of what “good science” is, “many political scientists have created models of politics and behavior as if politics and history were the product of discrete, stable and independent units [or variables] in interaction with other variables in stable and predictable ways” (Steinmo Reference Steinmo2009–10, 1).

Steinmo calls for an evolutionary approach to politics that is closer to the life sciences than to physics. Prediction based on linear causation is replaced by a recognition of the uncertainty, contingency, and open-endedness of complex causation. Pace Robert Bates, we should teach our students that context matters; they should learn “about people, places and events … because in an emergent and contingent world, these facts are themselves important”(Steinmo Reference Steinmo2009–10, 38, author's emphasis).