Self Criticism in Economics

This is a bit of a rant. Please bear with me.

I rarely do this, but here’s a link to one of my favorite economics blogs:

Unlearning Economics:Economists Dissing Economics

The problem with all this self-criticism is that many of the people doing the dissing are responsible for the disarray they are criticizing. A different view is that none of them saw fit to make enough noise to change things.

This may unfair of me.

Notice also that much of this criticism is dated. The wheels have been coming off economics for a long time, yet inertia is sufficient to prevent change.

This may also be unfair of me.

But, ask yourself: where else in our economy could so much analytical ineptitude be tolerated for so long? Where else could repeated failure be fobbed off so easily? Where else could so much fraction, discord, and general incoherence be treated as a “profession”?

If some of the so-called heterodox alternatives to the dominant theories were so compelling surely they would have been more widely accepted. It is not enough to carp about other people’s evident failings – and believe me, as a relative outsider those failings are glaringly evident – because I believe those who complain have a responsibility to build the better alternative.

Instead we are confronted repeatedly by the same old stuff. The same old utopian nonsense, or the same old half complete theories. For sure, around the fringes there are signs of progress, but mostly they, too, suffer from incompleteness, over reliance on formalism, and, unfortunately too often, a highly naive interpretation of reality.

There is a mass of work going on within economics. Well intentioned work. Brilliant work no doubt. But it isn’t advancing us. It is not penetrating the fog of complexity or uncertainty that real world people working in the economy take for granted as the basic condition they must deal with.

I am talking about the basic stuff outsiders would consider to be economics.

There is an issue here we need to be clear about: lots of economists don’t work on the economy. They work in obscure sub-fields of economics, so they think of themselves as immune to the criticism, post-crisis, that economics is a failed enterprise. They regard themselves as making progress, albeit in largely irrelevant and purely academic domains that will have only marginal – if that – impact on society. These people are not economists in any popular or vernacular definition of the word. They are technicians adept at analysis. They could be mathematicians just as easily. Or computing theorists. Or quasi-physicists. Or whatever. By and large they’re good with numbers. That’s it. As if that’s economics.

The problem is that at the root of their knowledge sits the same profoundly unreal and naive vision of humanity that infects and thus incapacitates mainstream economics. They propagate it unwittingly. They tolerate it.

It is one thing to stylize, synthesize, or otherwise simplify in order to abstract from reality. It is entirely another matter to obliterate reality along the way. Modern economics – most of it – just isn’t about the economy. It is self-perpetuating and self-regarding. It values itself above its value to society. And when confronted by the complex uncertainties of the real world it sets about the performative task of altering reality to fit its theories.

Economics is about bending the world to fit the theory rather than the other way around.

How else can you explain the profoundly anti-democractic nature of new classical thought?

Anyway, enough of my complaining. It is disheartening to come across lists like that at Unlearning Economics.

I hope you all can prove me wrong about economics.

I really do.