Tom Clark and Chris Giles, writing for the Financial Times, debate the big picture of the economics profession. A few other FT writers respond.
Here is the contribution from Diane Coyle, the Bennett Professor of Public Policy at the University of Cambridge:
The Discipline Suffers from its Lack of Diversity
The debate about the state of economics is a bit surreal, to an economist. Tom Clark says economics is “a profession in a defensive mood”. Only if it is defensive to point out that what some critics are describing bears scant resemblance to economics. I’d go so far as to say there is economics, which is what academics, consultants and many officials do; and something almost entirely different, “economics”, an ideological construct deployed by some politicians and polemicists. The critics are attacking “economics” and calling it economics (when they are not calling it neoliberalism).
This is deeply frustrating. Partly because it would be marvellous if critics could accept that areas of the discipline such as market design, behavioural economics, industrial organisation, auction theory, data and techniques for policy evaluation, institutional economics, construction of major historical data sets et cetera are not just the few useful contributions identifiable in “a far-fetched vision of omnipresent and flawless markets”. On the contrary, areas such as these form the bulk of the work economists do.
But it is frustrating as well because there are certainly valid criticisms of economics. My top concern is its social composition. It is a largely male, white and posh profession — not a foundation for good social science, whose questions, hypotheses and data need to be rooted in society. The male dominance reflects both culture and the unusually narrow criteria for advancement in the academic profession, where only five journals really count. Other people would highlight further weaknesses, but then economics is a living science, looking at a constantly changing society, and there is a lot to learn.
And here is a snippet from the contribution of Mariana Mazzucato, Professor of Innovation and Public Value at UCL:
[…] the assumption that price reflects value means that we end up constantly correcting gross domestic product for the priceless activities it ignores (caring services at home, environmental damage, quality of life). And similarly, those activities which do have a price, but are just moving things around rather than creating value, get included (eg. most of the financial sector).
My suggestion is that before we add happiness indicators, we first take out rents. This would cause the GDP of some countries to drop drastically and for new questions to be asked about the “direction” of growth, not only its rate.
By Guillaume Calafat & Éric Monnet, trans. Lucy Garnier.
The reasons behind the loss of influence of economic history are well known. However, for a long time, it held pride of place in both disciplines. In the nineteenth century, economics had a strong place in history departments because it was an integral part of the national narrative. Later, economic history was pursued in very different ways by both Marxist history and the Annales School. The economic dimension to the historical dynamic was considered essential in the Marxist tradition, because it was primary in all social relations, and among Annales historians, because it was a key element for analysing long-term changes (technical, commercial, entrepreneurial, etc.). Historians’ interest in economic history then waned due to a radical critique of the primary nature of economic relations and to greater focus on discourse and representations (of the world, the market, etc.). At the end of the 1970s, this was coupled with a critique of statistical tools and the lack of neutrality of quantitative approaches. In short, cultural history and the history of representations progressively came to replace economic history – paradoxically, just as the dissemination and progress of IT tools seemed to offer new measuring instruments and new possibilities for analysing economies of the past.
Full article here.
“Cents and Sensibility” is less a critique of economics than a critique of using “only” economics. It is especially relevant in the presence of ethical doubt. Should there be a limit to prescription drug prices? Is it right for universities to mislead the public about SAT scores, or about why they give financial aid? Such questions indeed require sensibility as well as cents. This is a bracing, original work, reminding us that economics was never supposed to be about the math but rather about the stories it tells about our lives.
Full review at The Washington Post.
Vector is pleased to invite proposals for short articles (2,000-4,000 words) exploring science fiction in relation to any and all themes related to economics, as well as economic history, economic sociology, economic anthropology, economic humanities, finance, political economy, IPE, and other adjacent disciplines and fields.
Please submit abstracts of 200-400 words to firstname.lastname@example.org by 31 March 2018. Full CfP here.
Economics in SFF
Economics for SF Researchers
A prose poem by Mairéad Byrne.
I haven’t spent some money for a while. It’s time ah I spent ah some money. I’ve paid the bills. I did that ah Monday. Early. I paid the bills. It’s not like money. It’s not cash and it’s not illicit. It’s just something you ah have to do. Like you’re doing the right thing when you pay the bills. You’re just doing what you have to do. No-one will thank you. Or know. Though if you don’t do it WHAM. In the slammer. Out. Cut off. Whatever. Guys in suits coming towards you with cold smiles. Yeah. So I pay the bills. But I haven’t spent some money for a while. The kind you spend on stuff you don’t so much need or can’t afford but you get it anyway. Because it’s there and you’re there. Though that’s kind of like the bills. It makes sense later on. The kind of spending I’m getting at is the opposite. You buy the thing. It’s beautiful. You want it. Or you just want it. PAM. You click. Snap down your card. You have it. Or you have it soon. It comes. But then the other part, the cost, is hanging out there somewhere, shelved like a big husk in a warehouse, until it gets swept up in your cycle and comes swinging in with the bills. And you deal with it. You deal with it. But there’s something about that part, when you have the thing but the cost is kind of out there, amputated, a hulk in wait. It’s not a sexual thrill but it is something. Kind of postmodern.
Listening to Robert Shiller’s online lectures, I’ve often half-written him an email in my head on some point. I distract myself and have to rewind. If you go to the “Drafts” folder in my brain, a third of them are to Robert Shiller.
Essentially, I wanted to tell him something about the humanities. I’m not sure what. Maybe just that the humanities exists. Professor Shiller can be quite perplexing. On the one hand, he’s a hugely influential figure in behavioral economics, and behavioral economics is the field with a great track record in confronting the more brutal absurdities of mainstream economics. On the other hand Shiller still is, frustratingly, very much an economist. Although behavioral economics may ameliorate some of the features of scientistic finance and economics which humanities scholars tend to find so frustrating, it never goes nearly far enough.
So I’m happy to see this article from him!
Behavioral economics was economics with an input from the psychology department. Every department has its own tool kit for approaching research; we were very much influenced by psychology. Maybe a little sociology, maybe a little anthropology, but nevertheless all social-science fields.
I’m starting now, with my more recent work, to think that we have to look at the humanities as well. There is something difficult to formalize about human beings, but something that we nonetheless have to understand, and I think one way to do that is with an approach that I’m calling “narrative economics”: taking economics and adding the study of the narratives that people transmit.
If Shiller is serious about narrative economics, he may want to give poststructuralism a whirl, and see if he can shake the set of intellectual habits that make “human instinct for storytelling” seem like an appropriate way of introducing an endeavor of this kind.
But it’s another step in the right direction …
See also: Shiller’s ‘Narrative Economics’ paper (2017).
- The gold and silver trees in C.S. Lewis’s The Magician’s Nephew (1955).
- Clifford D. Simak, ‘The Money Tree’ (1958).
- Leaf currency on primordial Earth in Douglas Adams’s The Restaurant at the End of the Universe (1980).
- The money tree in Nalo Hopkinson’s ‘Money Tree’ (1997).
- Leaf currency on the planet Rain in Adam Roberts’s Stone (2002).
You can read more about leafy and other organic currencies at Economic Science Fiction and Fantasy.
The not-for-profit organisation Positive Money have used the recent chatter about magic money trees as a teachable moment. Money does grow on branches: bank branches. More here.