Today’s the day – another book, by me, launched on the world.
Cogs and Monsters: What Economics Is and What It Should be is a reflection on how economics needs to change, with three main arguments.
One is that the profession is shockingly non-diverse, one of the worst academic disciplines for representation of women and people of colour, and this is intolerable in a social science: how can economists’ even know what questions to ask if there are so few with different experiences of life?
A second is that the long tradition of arguing that economics is like engineering, dentistry or plumbing, seeking objective answers to well-defined problems, so that ‘positive’ economics can be separated from value judgements about questions like inequality, is fundamentally incorrect. Economists’ concept of ‘efficiency’ is itself value-laden, and economists cannot stand outside the society they analyse – although of course seeking to be as objective as possible, using evidence, is to be welcomed. (Page 99 concerns the quality of evidence.)
The third argument is that the benchmark model from which economic reasoning starts is simply misleading in the modern economy of increasing returns, pervasive social influence on each others’ variable preferences, and network dynamics. Economic analysis should concern institutions and not focus on markets. The top academics know this and do outstanding work recognising these features of the world, but it has not changed the basics. For example, the instinct is to start with ‘the market’ and find ‘failures’; but it’s all failures out there and we should be starting with ‘institutions’. And the academic discipline concentrates on quantitative answers to narrow, well-defined problems, instead of tackling the big questions of today.
These are related issues. One reason the same kind of people keep selecting into studying economics is because it speaks to their experiences and preoccupations and not those of different groups. To caricature the top economics departments unfairly – because lots of great work is done by these academics – they have become like Silicon Valley bros. There are lots of parallels between the Econ and tech worlds, including His being coded as ‘homo economics’. But at least everyone is talking about AI ethics. This needs to happen in economics too, reviving political economy and rebooting welfare economics.
I expect critics of economics to agree and lots of economists to disagree. They will point to great papers about X, Y and Z, and will be correct. But the complacency troubles me, the failure to recognise that so few people want to study economics because of the way it is, and that so many blame it for the state of the world.
