Re: the primacy of economics

Tim Harford re-phrasing of the question:

Is it progressive to attack the very existence of mainstream economics?

is answered emphatically “No” by Simon Wren-Lewis in On criticising the existence of mainstream economics. Much of this “no” hinges on the premise that economics is a science, as well as a pretty thorough misunderstanding of the basis of political power. Put another way more briefly in reply to Mr. Harford’s re-phrasing:

yes, we absolutely should abdicate all policy decisions to an exalted priest class

As a practitioner of another art that sometimes has pretensions of science (software “engineering” and design), it’s painful to see others make similar errors. If you’re not making falsifiable predictions and conducting peer-reproducible experiments, you’re not doing science. If your art is dominated by personalities that apply influence via reputational fiat, you’re not involved in a science.

The fact that there are no practical consequences for economists or their theories or recommendations when spectacular failure is manifest only underscores the folly of advocating for economics as a science, nevermind the collateral damage done to actual science in the eyes of the general public.

Mr. Wren-Lewis refers briefly to the postulation that economics is an inexact science, which is supposed to free it from the various expectations of measurement and reproducability. The particulars of this science, not-a-science semantic argument actually aren’t essential; even by the relaxed metric of “is it a mode of collective inquiry that can manufacture knowledge applicable to future circumstances and decisions?”, it seems economics is wanting:

  1. Was the liberalization of trade a net positive for humanity?
  2. Was later globalization a net positive for humanity?
  3. Were American bailouts in the late aughts and their prioritization a net positive?
  4. Was British austerity a net positive?

The answer to all of these questions (and many more) is “Maybe? Economics can’t really tell us.” Economics simply cannot capture the panoply of criteria we might want to use to evaluate any given policy decision, with its narrow (mainstream) charter of tracking metrics like GDP, inflation, labor participation, and so on. Absent a metric for a criterion, economists will gleefully ignore it. Even in “positive” outcomes, economists are left saying “Who do you believe, me or your lying eyes?”

Sure, GDP is up; don’t worry that the drilling has made your water undrinkable. Yes, labor participation is great; don’t worry that the job you have now is worse than the one you had before. Absolutely, inflation is low; don’t worry that your hometown is literally dying off. Indeed, life expectancy is up; don’t worry that getting sick will mean you’ll have to declare bankruptcy.

Maintaining economics as the primary (often sole) basis upon which policy decisions are made is absolutely immoral at this point. What riled me the most about Mr. Wren-Lewis’ post illustrates exactly why:

Now imagine what would happen if there was no mainstream. Instead we had different schools of thought, each with their own models and favoured policies. There would be schools of thought that said austerity was bad, but there would be schools that said the opposite. I cannot see how that strengthens the argument against austerity, but I can see how it weakens it.
This is the mistake that progressives make. They think that by challenging mainstream economics they will somehow make the economic arguments for regressive policies go away. They will not go away. Instead all you have done is thrown away the chance of challenging those arguments on their own ground, using the strength of an objective empirical science.

The most potent exercise of political power is in setting the terms of debate; winning or losing the debates themselves is often inconsequential with regard to the gross direction of policy. By letting economics (and economists) dictate the basis of argument time after time, we have abdicated our self-interest in essential public policy decisions for generations.

Social Security was instituted to counter the suffering of the poor, unemployed, and elderly deeply exacerbated by the Great Depression — not to satisfy the recommendations of an economic model. Likewise, the National Health Service wasn’t motivated by economists, but by decades of disillusionment with an unjust medical establishment concerned with grift more than good medicine, and a sense of duty to care for a nation’s citizenry after years of grinding war. These programs were instituted not because of Science, or a “science”, but because of far greater concerns: a peoples’ moral sense in the face of suffering and injustice.

Meanwhile, nearly every economic recommendation I’ve heard in my lifetime, even from so-called “left” economists, has been geared to calibrate metrics fundamentally unconcerned with externalities that make those metrics absolutely irrelevant in the political sphere. Again, go ask a machinist watching daytime TV about GDP-boosting trade, ask a broke college kid about the S&P breaking records, ask a mother of a sick child about the cost of medicine.

Our best understanding of economics is an essential tool of management and implementation. Succumbing to it as a basis of ideology or debate is unethical political malpractice.

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