not only are economists as a group not humble enough, what lay people are presented as economist’s policy recommendations are often the policy recommendations of the least humble economist. In summary, my argument is that lack of humility in conveying the limitations of their results is the most serious ethical problem facing economists; it played a much larger role in causing the recent financial crisis than did the type of payments highlighted by Inside Job. Thus, and any new code of ethics for economists should deal with that humility problem.
Pointer from Tyler Cowen. To say that I agree would be an understatement.
The article goes on to draw an analogy between economics and engineering, which I might quarrel with. The way I think of engineering, at some point the engineer knows whether the system or product works, in the sense of doing what is supposed to do. In economics, I doubt that we obtain comparably reliable knowledge about whether a policy or economic model works.
READER COMMENTS
Patrick R. Sullivan
Jan 24 2012 at 1:16pm
Your argument is made even stronger by the previous post, ‘Antitrust Kills’. There’s clearly a case of hubris by economists–the underlying theory of the case was ‘path dependence’, promoted initially by a couple of prominent Stanford economists (and also Paul Krugman), which turned out to be bogus.
Greg
Jan 24 2012 at 1:22pm
I need to tell you why you are wrong. (note that i am on a graduate program so I have some understanding of the technical aspects of economics as well as related issues):
1) No one EVER listens to economists. really in all sorts of ways politicians and the public totally miss, ignore or just don’t know what economists are saying. Most politicians are trained as lawyers and most of them have been separated from any kind of academic environment for so long that they simply do not comprehend even how economists talk to each other (in terms of papers and presentations and seminars etc.)
the public is worse. while a politician can be forced to sit for a couple of hours and actually listen to an economist trying to explain Euler equations, the public can’t be forced. the public can only think of a single issue, in a one dimensional way with a thought chain which consists of only 1 step: regulate banks? banks are bad => regulate banks…next issue
2) Economics does not have the answers NOT because its not a science or something like that but because honestly economics has had very little time to come to grips with anything really. we only have data for the last 20 years (honestly i have never seen anyone do any kind of serious work on data older than 20 years). the data we do have is of terrible quality. mostly we do not have data on most things.
there is A LOT of work to be done in areas like behavioural economics and well pretty much in all areas. i have come across soooo many papers and ideas which were clearly only beginning to scratch the surface its not even funny.
3) most economists are actually very ignorant of economics. they mostly concentrate on an extremely narrow area and totally ignore everything else. very few economists have any interest in broader study of humanity: history, jurisprudence, political philosophy, history.
for example i work as a student assistant for a macroeconomics institute. they are VERY good at doing very interesting models of business cycles and include things like expectations and inequality constraints etc etc but they have ZERO knowledge of public choice issues, never mind jurisprudence or history.
so i think you are totally misunderstanding the economics field. you claim that economists think they know everything while in reality they actually know very little and real economists (i.e. economists who actually regularly publish research and do not write for any newspapers) would admit that. there is still a lot of work to be done. and remember, no one really ever listens to economists.
kio
Jan 24 2012 at 1:28pm
Thank you for the link to the paper. I do understand better now why economists are not scientists and even not engineers. It is hard to have a more comic description of the difference between science and engineering. All engineering methods are a subset of scientifically justfied relationships with well defined uncertainties. There is no engineering method which contradicts current scientific knowledge and is not based on it. Perpetuum mobile does not exists not because engineers failed to design it but because it contradicts the laws of thermodymics.
In economics, there is no scientific knowledge in terms of the hard sciences and thus one can not compare economists with engineers.
Chris T
Jan 24 2012 at 1:33pm
Greg – Sometimes I think economists believe the world came into existence during the industrial revolution.
Add ignorance of science and technology (particularly its iterative nature) to the list as well as culture.
David N
Jan 24 2012 at 2:20pm
Economics is a social science because it models human behavior, which can deviate, even in aggregate, in non-random ways. No matter what you try to do with economics, there is always a failure of statistics waiting around some dark corner; your model may work until the day when it doesn’t. Few problems in engineering are like this. I don’t think the analogy is a good one.
NormD
Jan 24 2012 at 2:22pm
What are we to make of people who give advice with absolute certainty but who never suffer any consequences if their advice is wrong. Who always have an excuse when things go badly.
In many ways it is evil, or at least despicable.
Ahhh to go back to the Middle Ages when if a seer’s advice turned out poorly….
Well, lets just say they never did it again.
Vadim
Jan 24 2012 at 2:42pm
Even if we could obtain the knowledge, ultimately whether something “works” in the economic policy arena is a subjective value judgment that depends on a given person’s policy preferences.
Becky Hargrove
Jan 24 2012 at 4:03pm
Greg,
It’s easy to say that no one is going to listen to economists anyway, that it’s an imperfect science and so forth. But I have to tell you as a non-economist who has thought about these things for years, economics is truly where the buck stops. It’s the place where society is going to have to find the majority of its most important solutions by virtue of the fact that money resides here. To be sure, many solutions that could turn things around are non-monetary, but they don’t stand a chance of either working or being understood if people do not figure out how wealth creation truly works. So this is no time to say, “we’re not responsible because no one wants us to be”. It’s time to engage in dialogue with all kinds of people to see how we can get through this.
Greg
Jan 24 2012 at 4:17pm
Chris T: search for “Property Rights, Warfare and the Neolithic Transition” by ROBERT ROWTHORN on GOOGLE SCHOLAR.
as you can see economists are beginning to look at humanity pre 1700. but you have to understand that the world we live in today (i like to summarise it with: 1)individual property rights 2)spirit entrepreneurship 3) science based on empiricism) is very different from pre 1700. so most economists are not that interested in it because any insight into for example stone age culture would be literally academic.
and lets not forget that this discussion revolves around interpretation of information and derivation of information, i.e. epistemology. epistemology is a very complicated thing. so its not right to totally dismiss economics as everyone LOVES to do and its wrong to try to naively to apply a very simple model to a complicated situation.
as i said, no one listens to economists. how many people in congress do you think have ever heard of paul krugman (the most famous economist today)???
now consider this: Paul Krugman has made no contribution to economics in the last 10 years (in terms of papers published in a good journal). how many people do you think in congress know of lets say Rabin (an author of a behavioural economics paper i’ve recently looked at) who is today at the forefront of economics….
Foobarista
Jan 24 2012 at 4:30pm
Part of the problem is you can always find an economist who’ll advocate just about any policy direction. If you’re a D and want to spend money like a drunken sailor on social stuff, just hook up with Krugman, who’ll say that everything will be fine. You can find R-leaning economists who are nearly Krugman-equivalents for R-friendly policies.
Politicians aren’t generally seeking “guidance” as much as they want cover for whatever they want to do.
Chris T
Jan 24 2012 at 5:42pm
so most economists are not that interested in it because any insight into for example stone age culture would be literally academic.
I would think studying how people behave with completely different incentives would be very useful to the field.
Daublin
Jan 24 2012 at 11:50pm
Members of a group are often good at measuring each other’s relative abilities. However, I don’t see how they are ever going to be good at measuring the objective ability of their best members in an absolute sense. Everyone in the group is going to say that their group is excellent.
The only way to measure a group as a whole will come from outside.
Daniel Kuehn
Jan 25 2012 at 8:52am
I agree with this too, but the problem is I think we all have different culprits in mind when we read something like this.
Navtechie
Jan 25 2012 at 9:09am
The problem with economists, in general, is that they never seem to take human nature and psychology into account when making their absolute statements of fact. *cough*krugman*cough*
Economics is part math, statistics, psychology and sociology. There are no absolutes, only damn good educated guesses.
[comment code edited to be visible–Econlib Ed.]
Yancey Ward
Jan 25 2012 at 11:24am
Wherever Science and Politics intersect, you get corruption of Science. Economics intersects with Politics more than any Science I know of.
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