Thursday, January 03, 2008

Should Economics Rule?

Whilst the short answer is clearly yes, this question was recently posed on Gristmill on the 10th December but in a way it is a follow up to the "400" post from 2 days ago.

It appears that Jerry Taylor a Senior fellow at the Cato Institute caused a bit of a stink when we was quoted as saying "scientists are in no position to intelligently guide public policy on climate change. Scientists can lay out scenarios, but it is up to economists to weigh the costs and benefits and many of them say the costs of cutting emissions are higher than the benefits".

As you might imagine this statement did not go down too well in certain circles.

Desmogblog (a good environmental blog) wrote in reply:

If you were told that you had a fatal disease and a Doctor told you how to get better, but then an economist came along and told you that the cost of treating you would be too high so it would be better not to do anything - would you sit there and wait to die?

Then Grist pile in:

Should economics rule? [Grist]

Economists, meanwhile, claim to have the key to rationality. Their claim is based in their own definition of their field, which is about "how people collectively make decisions", but they proceed very quickly from there to the marketplace via a number of dubious assumptions.

I like this positively Malthusian quote:
Is infinite growth of some meaningful quantity possible in a finite space? No scientist is inclined to think so, but economists habitually make this claim without bothering to defend it with anything but, "I'm, an economist and I say so", or perhaps more thoughtfully, "hey, it's worked until now".

This is almost flattery by insult. Finally,
I suggest that the core problem lies in our collective failure to consider what human decency means and to use that understanding to manage what money means. We don't have to listen to people who get that backwards.

I am not entirely sure I understand this last paragraph but it kind of sounds good.

The comments section of this post has some real gems. My favourite:

The economists think that we can somehow "buy" our way past climate change with their fictional money. The physical universe just doesn't work that way.

Rich Sweeny rides to the rescue with his post:
Can’t we all just get along? [Common Tragedies]

I’d like to point out that I certainly don’t believe that we should be categorically opposed to non-economic arguments. In fact interdisciplinary dialogue is imperative for solving most policy questions, including those related to the environment. At the end of the day, what matters is how good our answers are, not how we got there. Hopefully we can use this space to narrow some of the economist/ non-economist divide.

Good luck. He ends with the line:
Though the tools of economists may be imperfect, I don’t think we should abandon rational decision making and the pursuit of progress, however imperfectly defined, just yet.

What is interesting to note is that clearly economics still needs some serious PR. I suspect the general public just don't like what we have to say and throwing off our dismal image may take a few more decades (if of course the earth can sustain life that long) ;-)


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