Listener 17 January, 1998.
Keywords: History of Ideas, Methodology & Philosophy;
The Anti Economist League (AEL) is an inevitable reaction to the state of New Zealand economics. Their objectives are (1) expose the invalidity of economists’ dogma, and (2) eliminate economists from public policy making. This columnist has no difficulty with the first aim but is understandably nervous about the second.
The problem becomes clear enough in the AEL monthly newsletter, whose serious material invariably involves using economic analysis to criticise economists. (There are also jokes about economists, but not any of the witty ones.) Therein is the inherently contradiction of their strategy. For a parallel, consider a movement which wanted to “eliminate” mathematicians. The number system, the rules of arithmetic, and so on would remain, although people might use them less, less effectively, and make more errors. The eradication of the profession which has thought most about mathematics would not erase mathematics, and non-mathematicians would not stop using it.
The same applies for economics. If there were no economists, individuals would still have views on the economy and public policy, still discuss it, and still make policy decisions. The economy is, of course, not quite as fundamental as mathematics. For instance the traditional Maori had no special word for economy, or for ecology which comes from the same Greek root. Theirs was a holistic life, in which the economy and the ecology were integrated. This also applies for early European development. The word “economy” first appears in 1530, as the set of activities it covers begins to separate from the rest of human life. As long as this separation is possible, we are stuck with economics.
But even if many of the fundamental concepts of economics are not universal, we are unable to escape them. The AEL certainly has not; its main criticisms of economists are couched in the language of economics. It is no different for other such critics.
For instance there is much public criticism of the national accounts (most notably GDP) for omitting non-market work and the environment. None of the critics show any indication of an understanding of the underlying theory, nor do they seem aware that their points were made by professional economists at least a generation earlier. But no-one has been able to extend the underlying theory to enable the wider scope (which incidentally economists would love to do, because it would give them an even wider involvement in public policy).
We are not going to eliminate economics from public life, from public debate, from public policy. At issue is the quality of the analysis. Because so many New Zealand economists are dogmatists, they do not present their economic analysis very well. Similarly most critics of economic theory underestimate the complexity of the theories, a subtlety which gets lost in the dogma of their presentation and refutation.
So what is the point of the AEL? Part of its interest is the way it presents economists: as thick as two short planks, but publicly powerful and doctrinal rather than scientific. Even if this were true for some economists, it is not true for all of them. Some are not dogmatic, some are powerless, and some’s intelligence is of the one short plank variety, some are three.
In fact there is considerable diversity within the economics profession. To misquote the great economist, Alfred Marshall: “all short generalizations about economists are wrong, with the possible exception of this one.” However I can understand why the public take this view. Lazy journalists constantly bombard us with statements of the form “economists say …”, even though they have interviewed only one or two, or perhaps their wordprocessor, and do not capture the diversity of opinion among economists.
Moreover since 1984 there has been an ongoing governmental strategy to suppress economists who dissent from the government’s views, a strategy which those economists on the inside have regrettably supported. The intellectual oppression has extended from the trivial – who gets invited to official Christmas parties – to the awarding of positions, status, and financial rewards only to those who proclaim the official line. No wonder economics is seen to be riddled by dogma, and why one hears so little dissent from economists. The costs of disagreeing openly are high.
From this perspective the AEL is misconceived. It position might be summed up as the government economists having eliminated those who disagree with them, the AEL wants to finish off the job by eliminating the rest. Ironically both want to keep economics going, albeit each’s economics is inferior compared to that which is possible.
What we need is better economics in public policy. That will come only come from a more tolerant debate, in which resources (including status) are shared around, rather accruing to those who unthinkingly back the official dogma.
I am not sure the AEL approach of eliminating all economists helps. Those who are sympathetic with its first objective, and perhaps want to change its second, may wish to subscribe to the newsletter. Membership is $15 (like Reserve Bank statements about interest rates, they dont state the period for which it applies), and the address is 161 Princes Drive, Nelson.