Oh my, oh my! The economists have gotten it wrong again, and they're catching it. But they've always gotten it wrong. So what's different this time? Well, even journals committed to the orthodox economic viewpoint are asking questions.
In July, The Economist published two pieces (The other-worldly philosophers, What went wrong with economics) which posed penetrating questions but then became mealy mouthed about them. Subsequently, the magazine published a guest article by Robert Lucas, the John Dewey Distinguished Service Professor of Economics at the University of Chicago, that attempted to rebut the criticisms. This article was then followed by a group of responses posted in the Lucas Roundtable. Since then numerous pieces have appeared in various places, and Richard A. Posner, an attorney whose views are much respected in matters of public policy, posted a piece titled, Will Economists Escape a Whipping?, which brought howls from economists who resented criticism from someone outside the profession, which, of course, is a form of an ad hominem argument.
Readers of this seemingly ending thread of posts who expect to learn something new will be disconcertingly disappointed. The content consists of the same old banal, hackneyed, and trite claims and counter-claims that economists have been making for more than a century. But that doesn't mean that the thread doesn't yield a valid conclusion.
The first thing a judicious reader notices is how much disagreement exists among economists on almost every, perhaps every, matter. Then it becomes clear that much of this disagreement is acrimonious. Some of these people appear to hate each other. Now ask yourselves, how likely would it have been that man would have stepped on the moon if as much disagreement had existed among physicists?
After noticing the extent of this disagreement, one begins to wonder just what these economists know. Apparently very little, if anything. For some time now, while reading posts on Economist's View, I have taken to counted verbs and their associated parts of speech, and I counted them in the Luca Roundtable. The results are enlightening. "Believe/belief" occurs 27 times. "Think/thought," used as "believe/belief" occurs 33 times. "View" in expressions such as "my view" occurs 15 times, and "opinion" in expressions such as "my opinion" occurs five times.
On the other hand, "know/known/knowledge" occur only ten times in the following contexts, none of which is substantive:
It is . . . possible . . . to know
It is not . . . possible to know
because of a lack of knowledge
even after it was known where the economy was headed
I don't know
when it is commonly known among all investors
each individual investor does not know
If Mr Lucas now says that Ben Bernanke and company know
I don't know
, you know,
What can be inferred from this is that economics, contrary to the claims of economists, is a mere creedology. So economists need to tell us why we ought to pay any more attention to their creeds than we do the creeds of Islam or Astrology. What credence can we have in these creeds in the face of the economic system's regular failures? Why is their creed any better than any other? ©2011 John Kozy