Written by John Lounsbury
Blair Fix is a social scientist with a “fixation” on economics. (Yes, that pun is terrible). One of his interests is trying to understand why (and how) the connection between productivity and worker income has been broken for several decades. His postulate is that an individual’s “power” in a social environment has a more significant influence on income than does productivity In other words, income is more determined by what an individual can “take” than by what he can “earn”.
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Fix describes his approach to research as “economics from the top down”, which also the name of his blog. From Economics from the Top Down:
You might be wondering about the name of this blog. What is ‘economics from the top down’? Let’s begin with what it’s not. It’s not about supply-side economics, which is sometimes called ‘top-down’ economics.
Instead, I use the phrase ‘economics from the top down’ to mean two things. First, it’s a philosophical approach to studying human society. It’s an alternative to the ‘bottom-up’ approach that’s most common in economics. In the bottom-up approach, you first postulate simple principles of human behavior. You then use these ‘microfoundations’ to explain the behavior of groups of people.
I think this approach is misguided. It’s the equivalent of trying to explain individual behavior using postulates about how cells behave. It’s not that the bottom-up approach is impossible – clearly individuals interact to create group behavior (just as human cells interact to create individual behavior). The problem is that this bottom-up approach is far beyond our present abilities. We have no universal theory of human behavior (just as we have no universal theory of how cells behave).
The alternative – what I call the ‘top-down’ approach – is to treat groups as a unit of analysis. We study the behavior of human groups as important in its own right. If you follow the work of David Sloan Wilson, you’ll know that biologists are starting to think this way. Mainstream economists, however, have yet to catch on.
The second meaning of ‘economics from the top down’ has to do with hierarchy. When you look inside human groups, you inevitably find that they use hierarchy as an organizing principle. In a hierarchy, power flows from the ‘top down’. How humans organize into hierarchies is a major theme of this blog.
The approach Blair Fix is taking is one that I have been thinking about and discussing informally with a few friends. The approach of many economists is to seek to build macroeconomic understanding by formulating extensions from microeconomic principles and theories to create models of macroeconomic systems. This is the so-called concept of “microeconomic foundations” for macroecomic understanding. Blair Fix questions the usefulness of such an approach. He rejects that idea and studies “the behavior of human groups as important in its own right” (quote from above).
To use my own words, the approach is to empirically characterize macroeconomic systems based on group observables and then try to understand how individuals fit within the defined group characteristics. Thus, a correct approach is to understand how microeconomic structures fit within the observable confines of the macroeconomy in which they exist, rather than to try to describe the macroeconomy by collectively considering the microeconomic elements within.
To try to extend this discussion here would detract from the specific topic that is the subject of this week’s documentary, so I will cut myself off here and get right to the video.
What is unusual about this presentation is the detail into which Blair Fix goes about how he is constructing his “sausage”. He reveals his thought processes in great detail. It is a refreshing approach. In this way you feel involved in the progression of his research and should recognize that he is describing a work in progress, not a finished thesis.
The presentation starts at approximately 3 minutes on the video and ends about 87 minutes. The final 26 minutes ia an audience Q&A. I got the impression that the questions were coming mostly from faculty rather than students.
Source: YouTube
For more information about Blair Fix:
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