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Published by EH.NET (March 2000) 
 
Melvin W. Reder, _Economics: The Culture of a Controversial Science_. 
Chicago: University of Chicago Press, 1999. xii + 384 pp., $35.00 (cloth), 
ISBN: 0-226-70609-5. 
 
Reviewed for EH.Net by Ross B. Emmett, Department of Economics, Augustana 
University College, Canada. <[log in to unmask]> 
 
 
In the 1980s, it became common among management types to speak of 
"corporate culture" and its importance in understanding the work of an 
organization. Business analysts began to examine the institutional 
framework and practices of an organization in order to understand the way 
its underlying values were carried out. While "the bottom line" obviously 
remained important, the corporate culture gurus showed that every 
organization pursues profitability through different practices and 
institutional structures. "Successful" cultures were those which were able 
to create institutional structures which brought the practices of the 
organization's members in line with the organization's overall goals, 
including profitability. 
 
Melvin Reder has applied the same insight to the discipline of economics in 
this engaging book. For the scientist, "predictive accuracy" could serve as 
a proxy for the bottom line. Traditionally, the potential for prediction 
and control was the hallmark of a "true" science, and economics was either 
praised or vilified for its ability/failure to live up to that potential. 
Reder shows that the economics discipline, as an organization, has a set of 
institutionalized structures that shape the practices of its members. While 
these structures are possibly intended to assist the predictive accuracy of 
outcomes, they also create a "culture" in which adherence to a paradigm or 
the pursuit of status may be more important than prediction and control. 
Near the end of the book, Reder addresses the question of economics' 
"success." If its culture includes structures that impede prediction and 
control, what good is it to society? The tone of much of the book is 
carried in his answer, which is a paraphrase of Bob Solow: "I know the 
wheel is crooked, but economics is still the best game in town" (p. 362). 
 
The notion of "corporate culture" had another important role in the 
management literature: it suggested that the student of organizational 
behavior needed to act like the student of culture. The management 
specialist, in other words, needed to become an ethnographer. To understand 
the success of an organization, one needed to get "inside" it, to see how 
it functioned by its own rules and standards, rather than judge it solely 
by external criteria (even profitability). Here, too, Reder follows the 
organizational behaviorist. Part I explores the notion of culture in 
science, and several of the chapters in other parts of the book provide an 
inside guide to the practices of economists. Those who operate within the 
structures and practices of academia will find Reder's exploration 
familiar: editorial prescriptions, the quest for status among the elite of 
a profession, the role of prizes and honors, and the requirements of tenure 
and promotion. In fact, Reder's analysis of the culture of economics sounds 
suspiciously like the culture of American universities: a fact he 
recognizes near the beginning of the book, but focuses little attention on 
(we will return to this in a moment). 
 
The use of the term "controversial" in the sub-title of the book reveals 
another of Reder's themes. Some would argue, he claims, that the 
institutional structures and practices of economics render it unscientific. 
In Reder's view, they should instead simply remind us of the limitations of 
economic science (Reder's argument here is very similar to that developed 
by one of his predecessors at the University of Chicago, Frank Knight). The 
notion that economics' scientific reach is limited makes its claim to be a 
science controversial, giving Reder his title. But Reder's argument about 
the scientific status of economics seems to falter here. One could say that 
the focus on organizational culture was intended to remind us that 
organizations are artifices, and that looking at the culture of economics 
reminds us that it, too, is a human creation. But "science" is not supposed 
to be a human creation. Instead, it is created by adherence to a particular 
method, or by observation of reality (in other words, science's creator -- 
or at least its judge -- lies outside human artifice). 
 
The tension between his emphasis on economics as a form of human activity 
and the claim that economics is still a science permeates Reder's book. 
Recognizing this tension helps to explain a number of unusual features to 
the book. For example, the majority of the book (chapters 3 to 10) is an 
account of the scientific paradigms of economics (yes, Kuhn plays a 
prominent role in the book) for non-economists. And there is the obligatory 
chapter on the relation of the dominant scientific paradigm (Rational 
Allocation Paradigm - RAP for short - or what is commonly called 
neoclassical economics) to the ideology of laissez faire. Investigation of 
the "culture" of economics is surprisingly slim compared to the amount of 
space devoted to exposition of the scientific side of economics. As already 
indicated, most of the discussion of the culture of the economics 
disciplines depends upon the reader's prior appreciation for American 
academic life. There is no ethnographic examination of economists at work, 
no attempt to explain the human drama of RAP's rise to dominance, and only 
a glance at the roles of graduate education, foundation funding and 
non-North American economists in the discipline. 
 
In other words, Reder's book is a long way from a "science studies" 
approach to economics, and despite his use of "culture," is still rooted in 
the philosophy of science approaches common to the 1970s and 1980s. 
Nevertheless, in a discipline that still pursues the mantle of Science, 
Reder has provided an account that may help readers admit that economic 
science is fundamentally a human activity. 
 
 
Ross B. Emmett is editor of _The Selected Essays of Frank H. Knight_ (two 
volumes), recently published by the University of Chicago Press. 
 
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