economic theorist and economists' theorist

[Qingmin Liu]

I've encountered a diverse array of theorists, each with their own distinctive flavors. Whether it's the divide between applied versus pure, or high-brow versus low, the only universally agreeable distinctions seem to be between "good theorists" and "bad theorists" --- and naturally, most of us firmly plant ourselves in the former camp. But amidst this dichotomy lies another notable division: economic theorists v.s. economists’ theorists.

Economic theorists are the intellectual trailblazers, pioneering new concepts, methods, and models, all while engaging in spirited discourse with their fellow theorists. In contrast, economists’ theorists crafting theories, tools, and concepts tailored for consumption by non-theorists, and dare I say, even non-economists.

In an ideal world, these two categories of theorists would be one. Alas, in the true state of the world, this is not the case. While non-theorists may cheer on their theorists from the sidelines, they are unlikely to hire a theorist. Hence, the job market prospects for the latter camp are unfortunately not that as great as some would hope for. But things are changing, albeit slowly.

The value of purely intellectual exploration cannot be overstated. Economic theory concepts like Nash equilibrium, subgame perfection, and pairwise stability are the offspring of this exploration, born not from interactions with non-theorists but from the thought experiments of theorists (often non-economists in the early days of economic theory). 

The pursuit of pure intellectualism can sometimes lead to a detachment from the practical applications of economics—an applied discipline at its core. It would be useful to interact with non-theorists to ensure that our theories are not too far removed from being relevant and applicable. This mirrors the need for theoretical physicists to engage with empirical data, instead of developing a theory of everything from basic axioms.

Yet, excessive pandering to non-theorists risks diluting the kind of creativity needed for economic theory. There will be theories that fail in the long run and disappear from our memory. But some will surely survive. Only time will tell --- when theorists and non-theorists catch up with these ideas. Overemphasis on immediate appeal to non-theorists may transform theorists into mere technicians, killing the source for ideas that are ahead of our understanding --- akin to reducing the computer science department to an IT support for a university, ultimately stifling the discipline itself.

This is not to promote theories without applications. It is hard to imagine readers encountering concepts like Nash equilibrium, subgame perfection, and pairwise stability for the first time and not recognizing their applied potential despite their abstract nature.