In the wake of INET’s conference in Berlin, Executive Director Robert Johnson poses a profound question duringthis interview with the German foundation Stiftverband. Who does the economist serve: powerful interests or society?
The answer seems clear-cut. Economists today primarily serve the needs of powerful interests at the expense of society in general.
To answer this, Johnson peals back the surface of overt corruption to explain how the problem goes far beyond that. It was not that economists were all on the take leading up to the global financial crisis, Johnson says, but that those whose visions aligned with powerful financial interests “were used as marketing vehicles, and they were not adequately skeptical as scientists of what the flaws in their vision might be.”
“The world is always uncertain,” Johnson continues, “so when people become anxious, they want the expert to tell them what is going to happen.” The problem is that these experts don’t shoulder much of the risk of being wrong – or of selling confidence when humility is called for - and it is society that ultimately pays the full price of their deception.
Yet many economists don’t even see the problem. They don’t know – or don’t want to know – that they are selling snake oil and that the abstract precision of their finely tuned mathematical models doesn’t hold up to the many contingencies of the real world.Read the rest at INET Blog
The problem is exemplified by David Collander’s study of the economics profession, Johnson says. Collander found that of economics Ph.D. students “85% say they need to know a lot about mathematics, while only 13% say they need to know anything about the economy in order to become an economist,“ Johnson notes.
To remedy this deficiency and prevent the influential and misguided advice of economists from helping to cause another financial crisis, Johnson calls for a change in the way economics is taught.Here's the video