Robert Johnson — Dancing in the Dark: Creating an Economics for the 21st Century

A key part of this problem – and one that hasn’t been adequately explored – is the economics profession.

Economics is for the most part a discipline that appears to lack awareness of its own purpose, which is to help guide people toward a more successful society. But in order to offer this guidance, economics must emerge from its own dark ages. It must get beyond merely technical questions and model tweaking. Means and ends must be envisioned together. If not, we will simply keep groping in the fog as has been the case in recent years.

Ask an economist a simple question such as “What is economics supposed to do?” and you likely will get back a blank stare or an absurdly technical response filled with meaningless jargon. Typically you also will be told economics is “value free.” Many economists believe that economics involves just this kind of analysis: objective, dispassionate, apolitical, and unbiased.
However, this is clearly not the case. Without any substantive debate, economists routinely make recommendations and decisions about what does and doesn’t count in the world. Without admitting it, or even worse, at times without even knowing it, economists make powerful value judgments about what matters in our society.

While doing arithmetic may not be a biased process, deciding what gets included in the equation can be. Yet economists use theories that freeze human values inside antiseptic and sterile notions like “utility” (a technical euphemism that replaces all the nuance of human psychology with a simple process of mental math) while pretending that they are speaking objectively about how to increase wellbeing. Working in this way, economists are simply avoiding the question rather than addressing it.

The point is that economics is supposed to serve society. But fulfilling this goal means having real discussions about controversial and at times politically contentious topics, instead of hiding in the monastery and substituting technocratic dances for debate.

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Dancing in the Dark: Creating an Economics for the 21st Century
Robert Johnson

Central to this issue is economic methodology and the fact that discussion of methodology is ruled out by the mainstream, which holds that the methodological issue has been resolved and there is now a normal or orthodox way of doing economics. Anyone not conforming to this approach and its methodological assumptions is summarily dismissed as heterodox or criticized for "not having a model" (aka not using the accepted methodology). Well, guess what? Keynes eschewed econometric models as non-representational, and Keynes was a mathematician that had the chops to create mathematical models if he thought they were appropriate.

The problem is not with the method but with the profession itself. The economics profession has been completely discredited by failure to foresee the crisis, to explain it in hindsight, and to recommend a successful way to repair the damage. If that were not enough, the solutions followed, in particular "expansionary fiscal austerity," have worsened the situation rather than improving it.

As Bill Mitchell has often said and continues to say, all these people should just resign and leave the rest of humanity alone before they do anymore damage. At the very least, no one in a positon of authority or decision making should be listening to these abject failures that haven't got the decency to admit their failures and resign.