Remind Me Again — Why Do We Need Economists?

Robert A. Johnson, executive director of the Institute for New Economic Thinking, is greatly exercised by the failures of the economics profession. He believes that economists have performed a Great Disservice To Mankind (see below). He lays out his concerns in What About the Questions That Economics Can’t Answer?

Can economics be morally centered? And perhaps more importantly, should it be?

These are questions that society is grappling with in the face of the economics profession's failure to confront the global impact of exploding inequality within and between countries.

Limitations of the Dismal Science

Economists are very good at studying mechanisms for efficiently allocating things. But they are less effective at addressing more fundamental questions related to these things' social value. Indeed, economists typically leave values unexamined in their mathematical formulas. Social utility is simply not explored.

Take, for example, the so-called "Easterlin paradox," which teaches that when a person's income rises beyond what's necessary to meet their basic needs it does not increase their happiness. This doesn't match the standard capitalist economic assumption that rising personal wealth leads to increased individual fulfillment. Yet it's been proven time and again. And economics ignores this. Our textbook models remain unchanged.

On a broader level, this helps explain why orthodox economics has clung to the illusion that economic growth inexorably leads to progress, even in advanced industrial countries where plenty of wealth already exists.

This belief has led to a profound moral judgment: that those who lose in the march toward economic progress do not matter when compared to what will be achieved by greater growth. It's all part of a trade off between economic equality and economic growth. Economists assume that more economic equality comes at the price of reduced economic growth, yet Nobel laureate Joseph Stiglitz picked apart this presumption in his recent book The Price of Inequality...

We didn't find out just now about great wealth & income inequality in the United States because an economist (Joe Stiglitz) finally figured out what's going on, and then wrote a book about it... Who needs Joe Stiglitz anyway?

So even in the wake of the 2008 crisis, many economists haven't engaged in a needed reevaluation of economic values. What is a meaningful life? What do we aspire to? What, in the end, should those who influence the technocratic mechanisms of the economy be trying to create? Does the financial system serve society or mainly prey upon it to extract wealth?

Economics has proven itself devoid of answers to these profoundly important questions...

This is all fine, as far it goes. I don't think it goes nearly far enough. What's the solution?

It is in this light that the Institute for New Economic Thinking (INET) recently engaged with Union Theological Seminary in New York City with the goal of creating a new conversation to delve into the human issues we must explore to have a truly meaningful economics. We begin with a conversation between economics and theology. Together, we've created a public forum where leading economists and theologians can discuss money and markets and how to get economics back to serving society — not the other way around.

Theology?

In a time of economic despair we cannot afford to place a premium on elegant mathematical models. It is more important to touch people's hearts and give them the hope and resolve that brings them to a place of action.

Those who understand the power of faith and hope and love as a way to persevere can make a big contribution to this conversation. And in our opening conversation at Union we saw this in action, with discussions ranging from GDP and inequality to the Bible, Gandhian tactics, the power of faith, and the importance of theology's deeper moral insights.

Stop right there! So the "solution" is to wed some voodoo to some more voodoo to "touch people's hearts and give them the  hope and resolve that brings them to a place of action." A place of action? Like what? A way to persevere? As we're taking it up the ass? Sounds good!

OK, let me make sure I've got this right. Let's take some bullshit (economics), and through the magical power of addition, let's pile on some more bullshit (theology), and, if successful, we will end up with the Biggest Pile of Bullshit the world has ever seen. Here in America, that's what I thought we already had, and life does not seem to be getting any better. The dissemination of huge amounts of bullshit is the most effective method by which Power asserts and maintains itself.

For all intents and purposes, Economists are Theologians.

Since all of our current answers to these Deep Questions about the Good Life are utter bullshit, and can not be anything other than utter bullshit because humans are operating in the dark about who they are and why they do what they do, then it makes a kind of perverse sense to believe that the more bullshit we pile up, the better things will be. That's what Robert Johnson seems to be proposing. And what about this Great Disservice To Mankind? Here's Johnson speaking at the start of the video below—

I think the economics profession was making tremendous money, tremendous money, consulting for the financial sector. And many of the theories were not what you might call investigation and illumination of how financial markets work. They were portraits painted like a marketing document for how finance needed to be unshackled, so the powerful could make even more money, and I think they did a great disservice to mankind, and we're cleaning up after that right now.

Marketing! Of course. No surprise there. Secular theologians conducting services at the Altars of Power.

Remind me again — why do we need economists? Why couldn't they be smoothly replaced with a motley crew of soothsayers, charlatans, accountants, stat-keepers, lackeys, self-serving asskissers and the like? That's what we've got at present. The only difference would be that we ennoble these typical human fools with the label "economist" now, but could do without that fantasy after eliminating the entire profession.

We would no longer need to tolerate a bogus discipline within which fools like Paul Krugman hide behind a mask of legitimacy conferred by voodoo "economic models" disguised as science. Wouldn't that be refreshing?

I don't believe in the magical power of solving a problem by adding to it. More is not better. If you've got a bullshit problem—bogus theories, economists, their models—you can't possibly solve it by piling on more bullshit which promises to solve our problems through the "power of faith and hope and love." When some banker asshole rips you off, leaving you destitute, you can't eat Faith, Hope and Love. On a cold winter's day, when you're freezing to death, Faith, Hope and Love aren't going to keep you warm.

This new economics story is uncontaminated, 100% pure bullshit. It's the kind of thing you see in the movies. If you confront the Powerful with Faith, Hope and Love, they will laugh at you—all the way to the bank.

 

Comments

[Bill McDonald]

If you put 18th century Archbishop vestments on that guy in the video, he would look just like the one in the movie Amadeus.

I think I just found the new "spiritual" leader for the economics profession!

[John D]

Economists are too stupid to see that their solution to everything- 'growth', is in fact the problem itself.

I think we need to start creating 'economist jokes' along the lines of 'lawyer jokes'. That will knock them down to their rightful place in society. (Why does New Jersey have the most toxic waste sites and Washington DC the most economists? New Jersey had first choice.)

[Anywhere But Here Is Better]

Hi Dave

I've awakened from my mums-the-word slumbers - although I have been reading your posts every day - and want to share a small anecdote regarding "economics". (I think we should always use quotation marks when referring to "economics", just as we do when we are referring to anything fake or suspicious.)

I took "economics" as one of my subjects at high school (we call it sixth form here in the yUK). I diligently studied the basics, such as the law of supply and demand, Adam laissez-faire Smith, Keynesian theory, monetarism, etc etc. By the time of the exams, I learned enough to fool the examiners into giving me a decent grade, which helped me get into university.

Buoyed by my apparent success in "economics", I started a degree course majoring in this apparent science. It was about 10 minutes into my very first lecture on the very first day that the 200-decibel klaxon sounded in my brain. It coincided with the tutor making the following announcement: 'Throw away everything you've learned at school about "economics", it's all wrong.'

To this day, I don't know if he was an undercover anarchist or an egocentric Krugman type. But I did decide to throw it all away - the whole subject. Within the week, I was no longer taking "economics". Rescued from the study of hogwash, I discovered that the cute gals frequented the philosophy department.

Regards, Oliver

[Wanooski]

Economists, can they be used as a low pollution fuel?

[Brian M]

Persevere? Perseverance is generally what the people who are sitting pretty tell the people in deep shit to have. "Hey buddy, rough situation. Still, you're tough. I know you'll endeavor to persevere."

http://www.youtube.com/watch?v=GF8ETyOcDCE&feature=related