Steve Levitt on the academic career path

interviewed by Jon Hartley; comparing my reactions

I started and finished grad school about 15 years before Steven Levitt. I had little academic success, and he had a lot, including the John Bates Clark Medal, which is as difficult to obtain as the Nobel Prize. But we have some similar concerns with academic economics, so as I excerpt his interview with Jon Hartley I will give my comments. Pointer from Timothy Taylor.

Steve Levitt says about his undergraduate experience at Harvard,

looking back on Ec 10, what a great course that was, because it was a mix of grad students really teaching you in a very sensible way, the introduction to economics, and then lectures by the most preeminent economists in the world, many of them from Harvard, where you got a taste of whatever they were thinking about. And it really is a wonderful design for course.

Even though I was in grad school at MIT, I ended up teaching a section of Ec 10. Because Harvard grad students had so much money thrown at them, not many of them had an incentive to teach while in grad school, so Harvard needed a few MIT grad students to help.

My main memory of teaching was how weak the students were in math. When I taught the consumption function, with a slope and an intercept, 8 out of the 25 students came up to me afterward as individuals and asked me to explain what I meant by the intercept. They could not transfer what they were taught in 8th-grade algebra to a concept in economics. In contrast, the following year I taught a section of freshman economics at MIT, and the students were quick to catch on to everything.

Levitt went to grad school at MIT. He says,

I loved being there, but I was completely unprepared. I didn't know what was going on. Everything was swirling around me, and my colleagues were just so phenomenal. I had... Honestly, I had been... used to being the smartest kid. I had always been the smartest kid or close to the smartest kid, but then I got to MIT and I realized my God these people are incredible.

Feeling intimidated by your classmates and professors was a common experience when I was there, also. But still I had a nagging feeling that both the students and faculty were over-rating mathematical methods and not studying economic reality.

at MIT, the highest status people were probably the theorists because we had great, we had Jean Tirole and Drew Fudenberg and Oliver Hart. We had incredible theorists. And so, the best students wanted to be theorists, okay? And if you weren't quite good enough to be a theorist, then you probably wanted to be a macroeconomist 'cause we had great macroeconomists. And it trickled down and honestly, the people who were doing what I was doing, we were at the bottom of the totem pole status wise.

When I was there, macro and theory were probably tied, with macro perhaps a bit ahead. Both were ridiculously mathematical, I think even more than in Levitt’s time. When I was at MIT, I thought that the abstraction was to the point of asking how many angels could dance on the head of a pin. Tirole, Fudenberg, and Hart, who came after my grad school years, were at least motivated to look at how firms are managed and compete in the real world, even if their papers relied less on simple intuition and more on math than would be to my taste.

when you're on the job market, when you're young academic, you have to convince the faculty who are hiring you, that you have, somehow the idea is that technique, knowing how to do hard things, technical skills is really valuable.

I did not understand this at all. I naively thought that the point of research, even as a grad student, was to look at important questions and come up with helpful answers. A question that mattered a lot at the time was how prices failed to adjust to maintain macroeconomic stability. I came up with an answer that I liked, but my thesis did nothing to show off my knowledge of any fashionable techniques. It was worthless on the job market, although the guy from Amherst who interviewed me stole the idea and published it in a good journal before I could.

Levitt, after seeing how his research got circulated in a political context, says,

It took me years and years to understand that, number one, usually nobody cares at all about your research. No matter how much you love it, it never gets any attention. Number two, the quality of my research had nothing to do with it being passed around. It was being passed around Washington because it was the only paper that supported the position that they had already chosen. Right, the policy outcome they want chosen first and then they went for papers. And I'm sure they were disappointed that the only article they could find that it all supported them was by some grad student, but they took what they could. And what I read, the real lesson I learned over time is that I don't actually think that my research or even my writing, more popular writing, has ever really fundamentally changed the way any politician thought about anything and that it's just, I've come to a different conclusion which is that it is incredibly hard to influence any policy or anyone's beliefs by doing research.

He wound up at the University of Chicago, which has a very different tradition from MIT.

I just absolutely got converted to the power of Chicago thinking. It really, as I heard people like Gary Becker and Kevin Murphy and everyone talking, it just made sense to me. It was a different version of the world. There's a more serious economic application. I wasn't an economist at MIT. I was a data scientist who was messing around with data….once I got to Chicago, I began writing completely different kinds of papers. And it was very influential and I never left

But

the movement in terms of textbooks and what people are taught is just so away from what I think of Chicago price theory, which is not as mathematical, it's more about how you take the simple tools the very old tools you know tools that go back to people like Marshall and how you use them. It's really the skill that I see in Chicago price theory (one that I don't have) is how do you look at a problem and understand it to the lens of the right tool. And it's not complicated. It's usually very simple. Once you can see it, it's usually not much more than intermediate micro is what gets applied. And it's more artistic. And I really feel like our field has moved towards technicality. Harder proofs.

I imagine that I would have liked Chicago more than MIT, but not by much. In my day, it was Chicago’s Robert Lucas who propelled macroeconomics into the angels-dancing-on-the-head-of-a-pin world of rational expectations stochastic calculus.

Then Levitt notices that his research papers are not being read.

So, these were four papers that I was really excited about and collectively they had zero impact. They didn't publish well by and large, nobody cared about them and I remember looking at one point at the citations and seeing that collectively they had six citations. I thought, my god, what am I doing? I just spent the last two years of my life and nobody cares about it. And I really think it's true that the way I approached economic problems, without a fashion, without a vogue, and for better or worse, probably the profession is better for having a different set of standards than I was used to meeting up with. And that was really discouraging to me.

In other words, he had what I think is the normal academic experience. Most academic research has no lasting presence.

so really the question is, why am I retiring now? The question I should ask myself is why didn't I retire a long time ago? It made no sense. I've just been, I've thought, I've known for years, it's the wrong place for me to be. And it just took me a long time to figure out how to extricate myself from academics.

Remember, this is someone who reached the pinnacle of the profession. And he is sorry that he did not extricate himself from academics sooner.

The only way I could have extricated myself from academics sooner than I did would have been to go to business school rather than economics graduate school. But that idea never occurred to me.

I wouldn't be that surprised if economics ends up going the way of anthropology or sociology, which works prominent and thought to be very promising and important disciplines, but have fallen dramatically in their stature because they ended up being more arcane and more focused inwardly. So, I have a really bad feeling about the future of economics, and I don't see an easy way to change it.”

I, too, have said that economics is on the road to sociology. And see Tyler’s post on non-binary gender economics.

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Episode 28. Steven D. Levitt (Freakonomics co-author and University of Chicago Economics Professor) on His Career And Decision To Retire From Academic Economics