Monday, July 11, 2011

Should economists be good, or be good Libertarians?

The world's largest association of economists is considering ethics guidelines after outrage about undisclosed conflicts of interest, but only a handful of its 18,000 members have bothered to offer any input.

The American Economic Association earlier this year charged a five-person panel with looking into ethics and economics -- in part a response to the 2010 documentary "Inside Job" that vilified a number of big-name economists for arguing in favor of deregulation while on Wall Street's payroll.

The film also notably skewered former Federal Reserve Governor Frederic Mishkin, who wrote a glowing paper about Iceland's financial system in 2006 -- for which he was paid by the Icelandic Chamber of Commerce. Two years later, the country's financial system collapsed.
So what is the consensus among the economists? Turns out that they don't want to violate their Libertarian principles.
Card said it is possible the AEA's conflict of interest guidelines will be written along similar lines but said any code would be difficult to enforce.
"We are very modest about the possibility of actually policing badly-intended people," he said. "How can you figure out who got paid by who if they don't want you to know?"
Card added that the committee is reluctant to be too prescriptive."
"Economists have lots of flaws, but there is a general belief that economists don't like to tell other people what to do. This particular committee is made up of a broad group of people but no one who is a tell-other-people-what-to-do type of person."


Anonymous said...

Awesome, they don't like telling people what to do, but at the same time almost every single public and private institution take decisions on what they say.

Dismal science strikes back. Maybe they should drop their argument from authority and drop this so-called 'social science' altogether and be done with it. While you're at it, burn economy books from people who got all the current crisis totally wrong and these who, by following their prescriptions, made economy actually go worse, not better.

P.S: Probably anyone who was in favour of the euro in its current system, too.

Anonymous said...

You mean, good liberals? The kind that rant about global warming and use private planes or perhaps the ones that decry school choice but send their kids to private schools?

Anonymous said...

The Coyote nails it:

Anonymous said...

Use the Argentinian solution for economists the state doesn't care for.