Economics as a vaccine against economists?

On Friday a quote from the great Cambridge economist Joan Robinson was circulating on Twitter:

Purpose of studying economics – to learn how to avoid being deceived by economists

In fact, the full quote is:

The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.

This pretty much sums up the spirit in which I teach economics to policy students, so I thought it was worth a Retweet.

But it triggered a bit of deeper reflection.

In particular, one tweeter queried whether it could be the case. Studying economics, runs the argument, required embracing the values of economics in order to understand the analysis. Through a process of socialisation one becomes colonised by the economic discourse and progressively blinded to the problematic nature of some of the underlying assumptions and values.

This brief Twitter exchange resonates with some of the great debates in the social sciences, anthropology, and the philosophy of science. Is it possible to understand and engage meaningfully with a paradigm/discourse/culture/ontology without complete immersion within it? Or is it possible to stand outside yet still critically engage with it?

This speaks to a major contemporary challenge – what has been termed the ‘economisation’ of politics and policy. Increasingly policy proposals are being forced on to the procrustean bed of a utilitarian economic calculus. The policy world is increasingly framed from within a mainstream economic perspective. Unless proposals can be couched in the language of market failure, externalities, property rights, information asymmetries and the like they are not to be taken seriously.

A tactic deployed by policy actors operating from within the perspective of neoclassical economics is to deny those outside the discipline the standing to comment on economic matters. You can’t have a view because you’re not an economist. You don’t understand.

Those outside the discipline often feel disempowered when policy debate is conducted on this economics-inflected territory. The arguments come across as complex, heavy-duty scientific stuff. It can often seem to offer the sort of ready-made answers that Robinson warned against:

We’ve run the proposals through the model. We’ve estimated that the policy will cost £300m. It will deliver £200m of benefits. We shouldn’t do it.

Those without any feel for what these statements mean may feel forced to accept them as representing something robust. A model sounds pretty scientific. Benefits don’t outweight costs. That’s got to be bad, right? They may not like the answer they are presented with. But they have no tools for prising apart the case being made. They are blinded by “science”.

Yet, there are plenty of threads that you can tug at if you know where they are. What’s the assumed discount rate? How are we valuing life? Valuing time? Are there intangibles that have been omitted? How have transfers been dealt with? What are the magnitudes of the elasticities being used? Are they evidence-based or simply conventional assumptions? How are distributional issues being treated, cross-sectionally and longitudinally? Does the model deal with only first round effects or secondary effects? Partial or general equilibrium? Are expectations important in driving market behaviour and how are they treated?   What assumptions are being made about rationality? Or information? Or market structure? Or the speed of market adjustment? How sensitive are the results to the key assumptions? And so it goes on.

Which threads are relevant depends on the precise nature of the analysis. But there will definitely be threads. Pulling on some of them can expose something implausible or deeply unpalatable embedded in the assumptions or the calibration that drives the conclusions. It may lead to the whole argument unravelling.

So that brings us back to Robinson. Economics is an art in science’s clothing. The frontiers of the discipline can be fearsomely technical. There is no doubt this excludes the non-expert. Yet, the social world the economist seeks to shed light upon is not unintelligible to the non-specialist. When economics is being applied to policy then it is dealing with real issues about which non-economists may well be better informed than the economists. They have standing to challenge the incautious application of inappropriate models.

The mathematical sophistication of economic models is often based upon some questionable foundations – a house built on sand.  And the foundations are not too complex. When applied to policy questions the economics needs to speak meaningfully to pressing real world issues. Policymakers are familiar with one half of that process – the issues – they need to assess whether the economic analysis connects plausibly to those issues.

Most people can develop a feel for the way an economic argument is constructed. There are usually a few key assumptions that drive the outcome. So it doesn’t require too much knowledge to start to ask intelligent questions to test the robustness of what you’re being presented with.

We can draw the analogy with learning a language. It isn’t so difficult to learn tourist French or to achieve a competent level for reading or writing. You can get a real sense of what is going on. But that doesn’t mean you’ve got the facility to write cutting edge literary fiction. Or even effective double entendre-laden limericks. To do that requires much greater immersion – and may be inaccessible to the non-native speaker.

It is the same with economics. It is not so hard to get a sense of how economic argumentation works. But that doesn’t mean you’re going to get a paper published in the American Economic Review.

So if economics is studied critically, examining the foundations upon which explanations are built and the grammar of the arguments, it is possible to develop understanding while declining to embrace the values and assumptions that underpin the discourse.  And getting a feel for the subject reduces the chances of being deceived. I’m with Joan on that.


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