Economics Prize

Crunching Numbers, Mincing Words

Since 2000 a prize for the best work by a French economist under 40 years old has been jointly awarded by the Cercle des Economistes and the Economy section of the the French daily Le Monde. Besides a cultural fascination for early achievement and youthful genius, what does a look at laureates and finalists tell us about French economics (or about the prize)? According to Le Monde, in its presentation last month of this year’s edition of the Young Economist Prize, the "French touch" on display in the work of the four finalists is a matter not so much of method but of their ability to address societal concerns and to develop tools to understand "without a prioris" various problems and their likely solutions. A self-congratulatory mood develops as the article lauds the "pertinence and the freedom of choice of subjects" of the finalists’ publications, proving that such qualities do not constitute "a handicap for publication and international recognition" (i.e. publication in English-language journals).

It is interesting to note how little the young swashbuckling French economist who emerges from this text resembles the actual work of the four economists. The winner, Pierre-Olivier Gourinchas, is an international finance specialist who teaches at the University of California at Berkeley, and has done work and been interviewed on the current global financial crisis. He provides workmanlike technical analysis of the counter-intuitive attraction of the dollar. His doctoral thesis explored the relationship between exchange rate fluctuation and consumption. Not the stuff of limbs gone out on. Runner-up Philippe Choné is chief economist at the Fair Competition Council, an organ of the French state, and applies conventional, mathematically rigorous tools for analyzing competition and markets to various French issues (the regulatory framework for large retailers, for telecoms and other network operators, and so forth), reaching conventional technocratic conclusions.

The case of another runner-up, Yann Algan, is in some contrast to these two; although solidly-mathematically trained like the others, he has crawled out on a cultural-historical limb with a co-authored book on the need for confidence if an economy is going to work, a thesis which takes contemporary France as the paradigm of distrust (in one other, in institutions, in the market, in the future) in contrast with the Third Republic in the late 19th and early 20th centuries, presented as a paragon of confidence. The Society of Distrust: How the French social model is self-destructing won the 2008 Economic Book Prize (awarded by the French Senate) with its barrage of statistical tables and correlations, a frosting of French-history-for-dummies, and most importantly its contribution to the best-seller theme of France in decline, a favorite of the Senate Prize. (At least one commentator has pointed out that if Scandinavian countries are netted out of the authors’ data, France looks middle-of-the-pack, and the real puzzle to solve might be how do Nordic societies develop such high confidence in their institutions.) In any case, the book is unlikely to win a historical book prize, according to a historian who points up that the book’s comparative thesis — post-war erosion of confidence due to State-instituted inequalities versus the Third Republic as golden age of confidence due to its economic liberalism — owes more to ideology than historiography.

The final runner-up, Thibault Gadjos, appears to have slipped through the prize’s net, probably due to his disguise as yet another mathematical economist, but he puts his skills to use in no-holds-barred analyses of socio-economic inequality in France, which he says has "exploded". Asked about poverty indicators, he says "they’re simply statistical measures. You have to examine the underlying values which lead to their use. The economist’s role is to decode those choices." If this is declinism, the culprit in any case is new: laissez-faire elites instead of market-fearing masses.

At the end of the Le Monde presentation appears a curious phrase which seems to head in a different direction that the opening praise; "[the publications and] the curriculum vitae of the finalists prove that the scientific competence of the best French economists has become fully international". In other words, the strenuous attempt to detect a "French touch" is because the pool of candidates, like many of the members of the Cercle des Economistes, largely reflect Anglo-American training, methods and, to a large extent, ideologies. Past and present finalists read like a list of young French economists as assembled by the American Economic Review. There does, however, exist a fully stocked supply of French and European economists working from various perspectives, institutional, socio-economic, non-capitalist, applied-philosophical, de-growth, and others, suggesting perhaps that the "Cercle" (and friends), if not vicious, may be a little too closed. A few years ago economics students at some of France’s top training grounds started a movement to protest the over-modeled and insufficiently socio-politicized content of what they were being taught. The movement, which broadened, still lives, although not winning any prizes, and is now called Autisme-Economie, "because our discipline is totally closed to the world".

The good news is that the temperature of political economic debate does not seem to be in decline.

(c) Timothy Carlson

July/August/September 08