This above-linked editorial by Edward Hadas appeared on Reuters this week. Hadas calls for economists to admit that they’re “stumped” and that ignorance reigns in the field of economics.
Rather than repeat myself, the following was my reply (which you’ll find several comments down):
Good article, but the whole focus on financial machinations is illustrative of the problem with the field of economics. It focuses all of its attention there while maintaining its self-imposed ban on considering the effects of what is, by far, the biggest driving force behind economic trends today – population growth. If economists ever did consider the full range of effects – beyond mere resource issues – they might come to recognize the inverse relationship between population density and per capita consumption and its role in driving unemployment and global trade imbalances.
As rising population density chokes the life out of per capita consumption (which is inextricably linked to per capita employment), governments are becoming increasingly dependent upon deficit spending to maintain an illusion of prosperity. And even that tactic is rapidly becoming more impotent.
In conclusion, Hadas says:
Economists who can answer any of these questions deserve Nobel prizes. There is a generation’s worth to be won. Unfortunately, while the prizes can wait, policy has to be made now, in confusion and ignorance.
Can the field of economics, so bent on defending its precious mathematical models, ever wake up to reality? I wonder. They’re much more likely to resort to a tactic that we in the engineering world used to jokingly suggest as a solution to difficult problems: multiply by zero and add the answer. The Nobel prizes will likely go to economists who develop “fudge factors” that make all seem right with their models.
Perhaps only after the field of economics finds the mocking and insults that’s heaped upon them because of their ignorance greater than the derision they endured over Malthus’ theory will they decide to open their minds a little. In the meantime, they will continue to wallow in ignorance and our political leaders, under their advisement, will continue to serve up ignorant economic policy.