I recently participated in a panel put together by Boise State’s Hazard and Climate Resilience Institute as part of their Resource Nexus for Sustainability Grand Challenge. Together with 3 other economists (including the moderator), we met virtually to talk about the role of economics as a discipline for advancing the social goal of sustainability put in the context of the climate crisis. The name of the event was “Can economics help save the world?” (I’ll add the link to the video when it’s available.)
The discussion was pleasant, I think. Although to be honest, I can’t say I truly remember what went on. It was very dynamic and “real-time” in the sense that we tried addressing participant’s questions as they appeared in the chat–thus serving for a kind of authentically and beautifully chaotic episode of collective consciousness.
In preparation for the event, a few questions were distributed for panelists to organize their ideas around central topics chosen by the moderator. These questions were not easy and my answers to them kept evolving through the couple of weeks we had to prepare for the event.
So much of what I wanted to say may not have come across the way I wanted to or may not have been said simply by the very non-curated nature of live events. I want to post my evolving thoughts around these questions because the process of discovering those answers was truly edifying and spurred what felt like a moment of self-actualization. I’ll post them one at a time to keep things tractable, but I’ll add links to other reflections at the bottom of each commentary.
Without further ado, please join me in the discovery of some quite provocative questions put together for us by someone who genuinely was seeking to find new ideas and host a fun but illuminating discussion.
Question 3: What are some of the things that economists have done right? Are there things you would consider failures?
What we have done right: I think people don’t understand that economics is hard, not because of maths and lingo, but the thing we focus on: human beings (although maybe we should focus on the economy…), and human beings have these things called “free will” and “culture.” What this means for us is that studying causes and effects is quite challenging: we have to account for human responses on the individual level but also as society—and when you look at complex systems, simply aggregating individual choices doesn’t really for predicting social responses.
So, having said that, because in economics everything is related to everything, and because we can’t study people in the lab the way physicists and chemists study material substances, we have had to develop pretty clever techniques to actually tease out what causes what. Some of us are getting pretty good, innovative, and versatile at borrowing tricks from statistics, computer science, and psychology (and even business, anthropology and sociology!) I think as a discipline we do push the empirical boundary when it comes to application of fancy things like Machine Learning, Bayesian methods, and Randomized Control Trial design.
What we have done wrong: I don’t want to spend too much time here, I can talk for DAYS AND DAYS at a time here. But I think the most important harm we consistently do is forget to question the foundational assumptions in our thinking–ideas that happen to be dangerously importantly in shaping political and social narratives. Mainly, I think we fail to question the assumptions that competition is the most important force of nature and that growth is the ultimate goal of a social organism. Competition is not the only force of nature: evolution happens as much through cooperation as it does through competition. Also, the word for a natural living organism that keeps growing is cancer. It’s not a good thing.
Why do I add “dangerously” above? Because we forget that economics has been very important as a story-telling force–maybe because of its “political” origins (it was “political economy” at the beginning). And historically, we have helped fuel this narrative that competition is the most important force of nature, and that growth is the ultimate goals for a social organism. And we haven’t really questioned those assumptions with enough scrutiny. We have forgotten how strong the stories we tell can be in shaping the political discourse and the social myths.
Economists need to be careful about the assumptions we take and how we go about pushing recommendations. I think we have misled much of the policy discussion and action simply by focusing on getting numbers when what is required is developing frameworks. I think economists need to be held to higher standards of responsibility for their conclusions. It really is a matter of “risk.” There’s a high risk of things getting weaponized (policy-makers are obsessed with numbers because they give them a sense of precision, validity, and confidence). We should be more responsible. Our papers should pass more than “peer revision.”
To summarize, our problem is with our theoretical foundations and perhaps our professional “misconduct*”. But when it comes to empirical work, we can be quite competent, innovative, and versatile.
laura villegas ortiz 