Why we need our economists to try a lot harder
I noticed in The Psychologist magazine one of that profession's old hands advising newbies to 'think outside the box and question everything'. What? With economists, such heretical advice would be unthinkable.
In their profession, all the advice is to learn the orthodoxy and never question it. Why? Because it's the revealed truth.
The weird thing is, the great project for academic economists since the 1960s has been to make their discipline more scientific. Within their universities, economists get looked down on by the physical scientists, and they hate it.
They hate being regarded as one of the soft 'social' sciences, such as psychology, or worse, those lefty lightweight sociologists. So for decades they've been working to make their discipline more 'rigorous'. How? By expressing ideas about how the economy works in equations, not mere words.
Trouble is, there's more to science than maths. The hallmark of a scientist is that they're searching for the truth. They have a theory about how something works, but they're beavering away to improve it, get it a bit closer to the truth. So their best guess at the truth is slowly evolving and is significantly different today than what it was 50 years ago.
That's a million miles from academic economics. With most economists – practising as well as academic – their view of how the world works is virtually unchanged from one decade to the next. They've already found the truth, so nothing needs changing.
The forecasts in the federal budget which are given great attention on budget night are quite unreliable, but nobody does anything about it.
What do you call it when you know the unchanging truth? A religion. Economics is a secular religion, but a religion nonetheless. And when you know the truth, all that's left to do is convince the rest of the world of its truth.
It's true that a minority of leading academic economists have been working on new ideas about how the economy works. The annual Nobel Prize in 'economic sciences' – which is sponsored by the Swedish central bank – is awarded to academics (not all of them economists) who have important new thoughts on economic questions.
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Why we need our economists to try a lot harder
I noticed in The Psychologist magazine one of that profession's old hands advising newbies to 'think outside the box and question everything'. What? With economists, such heretical advice would be unthinkable. In their profession, all the advice is to learn the orthodoxy and never question it. Why? Because it's the revealed truth. The weird thing is, the great project for academic economists since the 1960s has been to make their discipline more scientific. Within their universities, economists get looked down on by the physical scientists, and they hate it. They hate being regarded as one of the soft 'social' sciences, such as psychology, or worse, those lefty lightweight sociologists. So for decades they've been working to make their discipline more 'rigorous'. How? By expressing ideas about how the economy works in equations, not mere words. Trouble is, there's more to science than maths. The hallmark of a scientist is that they're searching for the truth. They have a theory about how something works, but they're beavering away to improve it, get it a bit closer to the truth. So their best guess at the truth is slowly evolving and is significantly different today than what it was 50 years ago. That's a million miles from academic economics. With most economists – practising as well as academic – their view of how the world works is virtually unchanged from one decade to the next. They've already found the truth, so nothing needs changing. The forecasts in the federal budget which are given great attention on budget night are quite unreliable, but nobody does anything about it. What do you call it when you know the unchanging truth? A religion. Economics is a secular religion, but a religion nonetheless. And when you know the truth, all that's left to do is convince the rest of the world of its truth. It's true that a minority of leading academic economists have been working on new ideas about how the economy works. The annual Nobel Prize in 'economic sciences' – which is sponsored by the Swedish central bank – is awarded to academics (not all of them economists) who have important new thoughts on economic questions.
