Think Like An Economist?

Perhaps we are all asking too much. The burden is just too heavy a load. One point of entry too limited. A single, albeit determined, band of thinkers too narrow, too isolated, or too specialized to give us all that we want.

I am talking about economics of course.

We, that is society at large, want economists to deliver us from the great cycles and risks that seem to bedevil what we call the economy. This last crisis, the Great Recession, has plunged economics into a frenzy of introspection, self-analysis, and denial all at once. It has frozen the discipline into large well entrenched camps each holding ideas that appear to be economics, but which are often so contradictory that some of us are left believing the discipline no longer exists as a coherent body of thought. If ever it did so exist.

So do we ask too much?

Can one body of thought handle all the big questions that economies generate?

Is the system too complex? Too embedded in other social systems? Too inter-connected? Too laden with information? Too vibrant? Too historically contingent, yet so unhinged from that history that uncertainty swamps the past so frequently?

Is it just all too much for one group of people, using one general point of view, one perspective, and one method to investigate and deliver us the solutions we need?

Is an economy inscrutable to one such method?

Yes. Yes it is.

Which is why we need variety. But it must be a coherent variety and not perpetually mutually exclusive in its component analysis. And there ought, by now, to be one or two settled ideas. There ought to be a foundation broad enough to support different approaches. Collaborative, supportive, and independent approaches that can be deployed variously without fear of being declared apostate by true believers in some other approach.

This is not what economics is.

Thinking like an economist is, nowadays, understood by and large to be thinking like an automaton. It is to be cold. Calculating. Rational to a fault. Inhuman in any other discipline, but essential and lauded in economics.

I am reminded of this by the latest volume in the absurd “Freakonomics” family. It is a book designed to teach people to think like an economist. But the core ideas it promulgates are not exclusive to economics. Which is the problem. Calculation is not the exclusive province of economists. Nor is data collection. Nor is a reverence for fact. Nor is that skepticism we all need to avoid falling to much in love with our own ideas. Nor is pretty much anything else in the book. The technique is common. Indeed it is often more sophisticated and modern outside of economics.

I think those kinds of things can be generally called ‘scientific’. Doing those things is to do science. Science, that is, in a very catholic definition. Much of the study of history would qualify under such a rubric. I can imagine the authors of “Freakonomics” choking at the thought.

Somewhere along the way economists stopped pursuing big ideas. Indeed the authors of “freakonomics” warn us to avoid thinking expansively. They suggest taking small steps, thinking about little things, or studying the crumbs left after the big ideas have been chewed on by others. We are cautioned against tackling big problems because they tend to be too complicated. They are intractable to economist-style analysis. So we are advised to break things down and deal with the little bits that we can take a look at.

This is thinking like an economist.

Apparently.

What I glean from this advice is that economics has given up. That some part of it, at least, has decided that all the big questions are dealt with and that to be an economist is now, simply, to think clearly. Something that a vast number of other people do already.

Thinking like an economist within economics is too ignore the economy for all the reasons I gave earlier. It is just too much. The economist toolkit – as told to us by the authors of “Freakonomics” – can tackle a few small things. It can’t tackle the big stuff. Not without massively scrunching the big stuff up by locking it down inside such restrictive assumptions that is no longer recognizable as an economy.

And therein lies at least part of the problem with modern economics. Its orthodox wing has settled on a method it calls ‘thinking like an economist’. That method is insufficient to deal with the enormous complexity of real economies. So, along the way, the subject of study has been whittled down successively to make it tractable to the method. What is now defined as economics – by the orthodox – is whatever can be studied when one thinks like an economist. Which is to say little things, an endless stream of special cases, and an avoidance of the general case.

So we produce economists who are supremely gifted at being inhuman, and yet who purport to divine the workings of that most human of creations – an economy.

Yes. I think we are all asking too much. They are not up to the task. They have been trained downwards. They have been limited deliberately. They need help.

Lots of help.