Monday, January 23, 2012

Economists at Sea

Economists at sea...

Fourth, we must acknowledge the intimate, inseparable relationship between politics and economics. Modern debates about who caused the financial crisis—­government or the private financial sector—are almost ­nonsensical. We are living in an era of money politics and large powerful interests that influence the laws and regulations and their enforcement. In order to catalyze the evolution of economics, research teams would benefit from multidisciplinary interaction with politics, psychology, anthropology, sociology and history.

This makes sense to me. But then I was never a good enough economist to get a job as an economist...


Gerardo said...

It's too bad economists have never put any attention toward the money & politics nexus. I guess this must be some sort of new thing. Who knew?

Meanwhile, a student just sent me a 2011 piece in Foreign Policy where Lester Brown predicts a global food crisis. I believe he has been making that same prediction since about 1974.

Eric said...

Pardon me, but Queen Elizabeth and a bunch of students in an introductory economics course at Harvard don't represent "rebellion from above and below." Whatever "rebellion" might exist in that extremely limited sample of humanity is confined strictly to the "above."

Johnson goes on to claim that the protest in Mankiw's class was over the teaching of "mechanistic bare-bones models." The protesters left before the macro section of the course even began. They were protesting thinking that Greg Mankiw--of all people--preferred Smith to Keynes!

It's misleading to identify two groups of essentially very rich and naive people as somehow representative of those critical of the economist's role in the current financial mess.

"Today, economics is a discipline in disrepute. It’s as if our ship of state broke from its stable mooring and unexpectedly slammed into the rocks. How could things have gone so spectacularly wrong?"

Saying that economics is in disrepute because the "ship of state" hit the reef is like saying hammers are in disrepute because your house burned down!

Grand appeals to reorganize an entire profession sound beautiful and romantic, and it is convenient to dismiss controversy over what caused the downturn as "almost nonsensical" especially when you claim economics can't offer any answers until it does what you tell it to do. Johnson is barking up the wrong tree. The right tree is "democracy" and the raccoon in it is called "concentrated benefits and disbursed costs." In this tree the very definition of policy prescriptions is "concentrated...interests". The "money politics" he refers to are but one part of an entire system corrupted to its core by the allure of the taxpayer's wallet.

I don't know how Johnson makes it from "a bunch of rich people missing the bus counts as valid criticism of the economic profession" and "economics=the ship of state" to "economics should tone down the abstraction and tone up the interdisciplinary exchange," but I'm glad he did!

Anonymous said...

Okay, so what we need are for all researchers to be knowledgeable about all fields. Riiiiiight. If only economists spent 12 years in grad school taking courses in every single social science field, they would've seen the crisis coming. Hey, isn't a crisis by definition, y'know, unpredictable? And if you saw it coming you'd adjust and it wouldn't be a crisis?

What a fool. But I do like his suggestion of requiring an economic history course or two. I think it's a shame that requirement has been dropped from econ PhD programs. Johnson doesn't say, however, whether he means economic history or history of economic thought. Both are useful, but you can't have it all.