Economics’ big bipolar problem

Warring economists are stuffing up the discipline’s scientific credibility

Author: David Orrell
July 10, 2015

Readers of this column, no doubt concerned for my wellbeing, have occasionally asked how my book Economyths – a critique of mainstream economics from the point of view of an applied mathematician – was received by economists.

The book, which also served as the basis for many Econoclast articles, did muster a number of positive reviews, from publications ranging from Bloomberg to Handelsblatt. The science writer Brian Clegg called it “probably one of the most important books I’ve ever read” (he’s not an economist, I just wanted to mention it, before we go on). Perhaps the strongest endorsement was from Czech economist Tomas Sedlacek, who co-wrote a subsequent book with me.

Not everyone was so complimentary. In an online discussion at the leading Canadian economics blog Worthwhile Canadian Initiative, a group of university economists, wrote off my book based on what they could find on Google, describing it variously as juvenile, idiotic, intellectually lazy, semi-articulated, ignorant, and “sort of like Malcolm Gladwell without the insight” (ouch). One poster even compared me to a climate change denier. They could have thrown a copy on a fire, if they’d bought one.

[A] common criticism of economics is that it is based more on theory or ideology than on empirical evidence

The site linked to a review, which a World Finance reader alerted me to, written by Christopher Auld from the University of Victoria in Canada. It displayed a similar lack of enthusiasm. According to this economics professor, Economyths is “a terrible, wilfully ignorant, deeply anti-intellectual book. The characterisation of economic thought presented is ridiculous. The level of scholarship is abysmal.”

Hmm. For context, compare this with the straightforward description of the same book from William White – former Deputy Governor of the Bank of Canada, and current chairman of the OECD’s Economic and Development Review Committee – who cited it as a Bloomberg Best Book of 2013: “Lists 10 crucial assumptions (the economy is simple, fair, stable, etc.) and argues both entertainingly and convincingly that each one is totally at odds with reality. Orrell also suggests that adopting the science of complex systems would radically improve economic policymaking.”

Get the kindling version
Of course everyone has a right to their own opinion, but the contrast between White’s “best book” recommendation and Auld’s “there is nothing an interested layman could possibly learn from this book” assessment seems extreme. So what is going on? Is the book – and by implication this column – total rubbish, suitable only for incineration, or does it have some redeeming features? And what does this tell us about how economics is developing now?

I would argue that this type of ill-tempered, get-the-matches-out response is symptomatic of a wider denial in economics – more prevalent among academics than practitioners – about the subject’s role in the crisis, and its need for reform. One of the themes of the book is that economics needs to bring in ideas from people such as complexity scientists or biologists. While some specialised centres, such as the Soros-funded Institute for New Economic Thinking, were designed to encourage such interactions, in many academic departments they are still largely perceived as a threat.

This defensiveness is illustrated, in a revealing way, by Professor Auld’s review. A common criticism of economics is that it is based more on theory or ideology than on empirical evidence, and that is certainly the case here, where the facts are twisted to fit the argument – though it appears he at least obtained a copy of the book, which is more than can be said for the Worthwhile reviewers.

The review claims for example that I spend “several chapters discussing the scandalous fact that economists oppose any and all government intervention to protect the environment” which would surprise most readers, especially since the book only has 10 chapters. It also takes remarks out of context – even turning a humorous question into a statement by omitting the question mark – and generally misrepresents the book.

Feedback is always useful, and no book is perfect. But even negative reviews should try to give an accurate sense of what a book is about – especially when they come from university professors who have a special role to play in society, as publicly funded arbitrators of knowledge. It seems more about angry denial than anything else – not so much about my book, I suspect, than about the changing status of economics.

Lighten it up
In the last year or so, the field of economics has come under increasing criticism for its rigidity and insularity. Student groups such as Rethinking Economics – with branches in seven countries – Manchester University’s Post-Crash Economics Society, and many others around the world, have sprung up to demand reforms in the way that economists work and teach. A consistent theme is that economics need to relax a little and adopt a more open, pluralistic style.

In Quebec, for example, a student petition noted that the field “isolates itself from criticism, leaving little room for ethical, epistemological, philosophical, political and historical reflection, which would allow the discipline to reflect on itself and renew continuously”. As Keith Harrington from the activist group Kick It Over told YES! Magazine earlier this year: “Despite its enormous failings in the face of the financial crash, the mainstream of the profession has by and large failed to embrace self-criticism or open itself up to different approaches.” From my own experience with the book, I can understand how hard it must be for a student to question their professors. At least they don’t grade me.

Auld maintains a list of “anti-economists” on his site, which also includes, apart from yours truly, the economist Steve Keen (author of Debunking Economics), the environmentalist David Suzuki, and the biologist David Sloan Wilson – all people from outside the mainstream establishment who have questioned the basic assumptions of economics. Keen, together with White, was among the few people credited with giving advance warning of the financial crisis.

Silence those voices, and what hope is there to predict the next one? Shut out the biologists and anyone with a different background, and how can economics reform? When these academics get out of book-burning mode and start listening to those other than critics and their own students, maybe the field can start to move forward.