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Introduction:
From “Economics as Engineering”
to “Economics and Engineering”
Pedro Garcia Duarte and Yann Giraud
Downloaded from http://read.dukeupress.edu/hope/article-pdf/52/S1/10/833953/0520010.pdf by guest on 11 October 2022
The Transformation of Economics
into an Engineering Science:
From Analogies to Interactions
In recent years, economists, who in the past had mostly insisted on their
discipline’s strength as a rigorous social science, have turned to its larger
role in transforming society. As early as 22, Alvin oth, the tan
fordeducated economist who received the oel memorial pri e in 22,
has claimed that memers of his community should thin of themselves
as engineers rather than scientists. y this he meant that they should not
e interested solely in the maing of theoretical models ut also in con
fronting these models with the compleities of reallife situations, which
is what engineering is allegedly aout. e pointed to the rise of the new
sufield of maret design, which he had helped develop, as characteristic
of an engineer’s stance and provided several eamples of engineering
practices applied to economics the design of laor clearinghouses—such
as the entrylevel laor maret for American physicians—and that of the
ederal ommunications ommission spectrum auctions oth 22.
e want to than the enter for the istory of Political conomy and Due niversity Press
for their support, as well as the many referees who helped us during the editorial process. Yann
Giraud wishes to point out that his research has een supported y the proect ae DII
A–2–. Pedro Duarte acnowledges the financial support of the Institute for
Advanced tudies, at the niversité de ergyPontoise, for visiting professorships 2¡, 2
that were critical for the shaping of this oint proect.
History of Political Economy 2 annual suppl. DI .222
opyright 22 y Due niversity Press
Introduction
ore recently, the development economist and I¢ scholar sther
Duflo, another recent oel awardee, uilt on oth’s 22 and Ahiit
aneree’s 2 chap. contriutions and reiterated the need for econo
mists to venture outside academe. ut she went further and introduced, in
addition to the engineer, a new character that of the plumer. or her,
while scientists attempt to see epistemic truths using theoretical models
and engineers design the machine through which these models can e
translated into policy devices, plumers are the ones who are responsile Downloaded from http://read.dukeupress.edu/hope/article-pdf/52/S1/10/833953/0520010.pdf by guest on 11 October 2022
for maing that machine wor. or instance, while economic scientists
have shown that school vouchers help improve the education level of a
population, it is the role of economic engineers to design a voucher system
and an incentive structure that helps encourage the use of vouchers. In their
turn, economic plumers are the ones who will wor with the population
in order to mae sure that those vouchers will e addressed to those, situ
ated in a particular environment, who need them the most Duflo 2.
or oth oth and Duflo, engineering is the practice of designing policy
interventions that re¤uires a certain degree of tinering in the application
of preeisting theoretical models in order to adapt them to reallife practi
calities. or them, the engineering and scientific aspects of economics
complement each other. y contrast, the macroeconomist Gregory aniw
2¡ 2 identifies a tension etween science and engineering, contrast
ing two depictions of economics that of a scientific endeavor, according to
which “economists formulate theories with mathematical precision, collect
huge data sets on individual and aggregate ehavior, and eploit the most
sophisticated statistical techni¤ues to reach empirical udgments that are
free of ias and ideology or so we lie to thin,” with that of engineering.
After all, “God put macroeconomists on earth not to propose and test ele
gant theories ut to solve practical prolems.” aniw uses this dichotomy
as a foil for him to appraise the development of macroeconomics and to
indict new classical macroeconomics as a science while praising the engi
neering stance of ew §eynesian macroeconomics. or him, while the
rational epectation theory and caliration techni¤ues conceived y oert
ucas, dward Prescott, and their allies ehiit the rigor of science, ew
§eynesian economics, while less accurate from a scientific standpoint, has
the advantage of eing easily amenale to policymaing. ¢o gain relevance
for policy purposes, therefore, economics as engineering needs to momen
tarily stray from scientific accuracy.
hile oth, Duflo, and aniw located the engineer’s attitude at the
policymaing level, other economists stationed it at the theoretical model
2 Pedro Garcia Duarte and Yann Giraud
uilding. peaing of his “neoclassical growth model,” the macroecono
mist oert olow told our colleague ¨erena alsmayer 2© 2© that it
could e considered engineering “in the design sense.” hat olow meant
was that this model could e conceived as a sort of prototype for more com
ple measuring devices, suect to simple manipulation, which enales “the
modelereconomist to enter a new, uneplored, world” 2©. In that case,
the engineering aspect is enhanced y the fact that olow’s own institution,
I¢, is an engineering school and that the model was partly intended as a Downloaded from http://read.dukeupress.edu/hope/article-pdf/52/S1/10/833953/0520010.pdf by guest on 11 October 2022
pedagogical device for the students, most of whom were future engineers.
olow’s model is not the only macroeconomic device that was uilt using
engineering techni¤ues. In fact, as stheriram ent has shown,
all ranches of postwar macroeconomics have een using them. ew clas
sical macroeconomics emerged from the appropriation y ucas et al. of
ichard ellman’s dynamic programming and §álmán filtering «udy
§lein and arcel oumans, in this volume, develop and ¤ualify the history
of this appropriation. ¢hese economists may well elieve that they helped
their field ecome a science, yet they did so using engineering mathematics.
ot only practitioners ut also historians of the discipline have
addressed this engineering characteri ation of economics. riting for a
history of social science audience and uilding on the HOPE volume she
had coedited with alcolm utherford in , ary organ provided
an account of the development of twentiethcentury economics as that of
an engineering science, arguing that it implied two things first, that eco
nomics “came to rely on a certain precision of representation of the eco
nomic world, along with techni¤ues of ¤uantitative investigation and eact
analysis that were alien to the eperience of nineteenthcentury of eco
nomics”¬ second, that it is “est characteri ed as a science of applications
and implies a technical art, one that relies on tacit nowledge and decid
2
edly human input” organ 2 2¡.
ichel Armatte 2 epanded on organ’s argument and wrote a
oolength depiction of the transformation of political economy into an
. conomics was a compulsory suect for all I¢ undergraduates, even those who were
not enrolled in a social science program.
2. In fact, organ was not the first historian of economics to use the “economics as engi
neering” analogy. In his presidential address to the istory of conomics ociety, rau
furd Goodwin ¡, then editor of this ournal, wrote “If economists do insist on taing
models for the development of their suect from elsewhere rather than constructing new ones,
a closer analogy than the physical sciences may e engineering. uch of what economists do is
more comparale to the designing and faricating of structures for social use than to the lao
ratory wor of the physicist.”
Introduction
engineering science, covering several national eperiences and various
sufields—from econometrics to environmental economics. In his
account, “economics as engineering” is characteri ed y the development
of a unified ody of doctrine neoclassical economics, a new way of using
evidence ¤uantitative and mathematical, the inclusion of economic the
ory into a socioeconomic environment a new management of economic
activities, and the rise of a new ind of economic epertise in thin
tans and other institutions. Downloaded from http://read.dukeupress.edu/hope/article-pdf/52/S1/10/833953/0520010.pdf by guest on 11 October 2022
hile the economics as engineering analogy seems to wor well as a
acdrop to articulate a relatively cohesive narrative aout the disci
pline’s development, it also undermines some of the actual tensions that
have eisted etween economics and engineering in that period. In the
article mentioned aove, ent 2 summed it up y writing that
“while economists attempted to develop scientific nowledge . . . engi
neers are practical people who are concerned with getting specific os
done and who see satisfactory solutions in the face of compleities and
uncertainties. ngineers are nown to use trialanderror empiricisms
and ruleofthum techni¤ues that could not e generali ed to a wide
range of prolems.”
ost of these accounts of economics as engineering, whether written
from an economist’s or a historian’s perspective, share a numer of com
mon traits they point to the fact that the depiction of economics as a sci
ence leaves aside some important practical aspects involved in the appli
cation of economic nowledge to reallife situations¬ the necessity to have
recourse to tinering and trialanderror procedures, oth in modeling
practices and in the use of these models for policy purposes¬ the charac
teri ation of economic issues as necessitating comple computational pro
cesses¬ and, more generally, the characteri ation of the economy as a
machine. owever, there is room for deeper scrutiny. or instance, while
oth characteri es the transformation of economics into an engineering
science as a relatively recent—posts—feature of the discipline, or
gan and Armatte locate that transformation at the turn of the twentieth
century. Also, while oth and aniw circumscrie the engineering atti
tude to certain aspects of the discipline, that of policymaing and maret
design, others consider the analogy as a more general tae on economics.
ore important, what is more often left aside is the actual interaction
etween economists and engineers. ow did the latter react to econo
mists’ appropriation of their tools, and were they themselves interested in
taing into account economic nowledge as part of their professional
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