Sunday, September 27, 2009

Horn, Karen. "The Serendipity of Genius." STANDPOINT (October 2009).

What is economics? Is it a science? Haven't all its failures of prediction and political guidance proved its lack of respectability? The current financial crisis also reveals a deep crisis of economics. We seem to be witnessing the dismantling of an approach that, at least in its shallow mainstream version, has to make a series of absurd assumptions in order to reach any conclusion — with both the assumptions and the conclusions being astonishingly out of touch with reality. Its scholars have come to use mathematical logic as some sort of l'art pour l'art, falling into the trap of technicality rather than aiming at the wider horizon of an all-encompassing social science.
Competent economists are the rarest of birds. . . . The master-economist must possess a rare combination of gifts...He must be mathematician, historian, statesman, philosopher — in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man's nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.
We owe this job description to John Maynard Keynes and the situation hasn't changed since he wrote it nearly a century ago. The scarcity of good economists has indeed been a constant plague of humankind. This is not to say that all economists are by nature technocrats who fail to recognise the relevant questions. This would just not be true. The verdict of narrowness and non-scientific shallowness cannot be directed against those economists who have made their career outside the mainstream, the so-called "orthodoxy" — in institutional economics, for example, or in public choice, in law and economics, game theory and behavioural finance. In these relatively new and innovative fields, scholars have been endeavouring to fill the gaps in mainstream theory, hoping to contribute to what should one day be a better and more fruitful mainstream. The goal is a body of theory that would be able to answer more relevant questions about how mankind can peacefully live together in society, granting personal autonomy and economic progress for all, building on the institutional achievements of Western civilisation, such as individual liberty, the free market and the rule of law. . . . Read the rest here:

No comments:

Post a Comment