By Amol Agrawal

The economic turmoil in the world today, seven years after the great financial crash of 2008, has once again thrown the spotlight on the economics profession. After failing to foresee the crisis, economists seem to be struggling to find a way out of the morass in which the global economy has landed. As several commentators have argued, this period of economic crisis is also a crisis of economics itself. However, the crisis is also an opportunity to step back and ask what has gone wrong with economics, and if there are changes that can bring the discipline closer to reality and allow its practitioners to find more effective answers to economic problems.

At a recent debate on the role of history and math in economics at the London School of Economics, Keynesian economist Robert Skidelsky and heterodox Cambridge University economist Ha-Joon Chang persuasively argued that the neglect of economic history is one of the major failings of modern economics. Greater attention to economic history would have made economists recognize the many mistakes of economists and policymakers throughout the course of history, and made everyone aware of the unresolved debates and plurality of views within the discipline, the duo argued.

Apart from looking at history, the imperialistic economics should look at other fields as well.

History is, however, not the only important discipline that economists neglect, it turns out. A 2015 paper by researchers Marion Fourcade, Etienne Ollion and Yann Algan uses bibliometric data to show that economists are the most insular of all social scientists. In its quest to become the physics of the social sciences, the profession seems to have rewarded knowledge of mathematics much more than the knowledge of other social sciences, even though insights from those disciplines have a direct bearing on the subjects of economic enquiry.
The specialization of knowledge has made most social sciences insular, but the insularity of economics is markedly higher than any other discipline, Fourcade and her co-authors show. They point out that “articles in the American Political Science Review cite the top 25 economics journals more than five times as often as the articles in the American Economic Review cite the top 25 political science journals”. The asymmetry is even starker with regard to the American Sociological Review.
“From the vantage point of sociologists, geographers, historians, political scientists, or even psychologists, economists often resemble colonists settling on their land—an image reinforced by some economists’ proud claims of ‘economic imperialism’,” Fourcade and her co-authors wrote. “Lured by the prospect of a productive crop, economists are swift to probe the new grounds. They may ask for guidance upon arrival, even partner-up with the locals (with whom they now often share the same data). But they are unlikely to learn much from them, as they often prefer to deploy their own techniques. And in some cases, the purpose has been simply to set the other disciplines straight. Under the influence, notably, of Chicago price theory, the dominant economic paradigm has successfully conquered a segment of political science, law, accounting, and (for a while) sociology under the label of rational choice theory—thus explaining, in part, the directionality of the citation patterns observed above.”

Is economics merely a numbers game? | Photo Courtesy: Passel

Opinion surveys seem to point to the same trend: other social scientists and even business school professors value interdisciplinarity far more than economists. Fourcade and her co-authors show that citations in top economics journals are not just less interdisciplinary but also tend to be more concentrated. Pretty much nails the issues with economics and its modernity. Economics should become more ancient and less imperialistic.

Should become more ancient and less imperialistic.

There is one problem though. The discipline continues to be dominated by people who were part of this modernising game. Neither are we replacing them nor are they refusing to go. The discipline has to become more broad based and needs to move out from select people from select universities. They create the problems and then propose solutions as well.

Amol Agrawal is currently pursuing his PhD. in economics and has been actively engaged in research pertaining to Mumbai’s financial sector. 

This article was originally published on Mostly Economics.

Featured Image Source: Evan Kirby via Unsplash

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Posted by The Indian Economist