Signs economists haven’t the foggiest

19 Feb, 2016 at 08:56 | Posted in Economics | 3 Comments

Unlearning economics has a nice post up “outlining the major reasons why economists can be completely out of touch with their public image, as well as how they should do ‘science,’ and why their discipline is so ripe for criticism.” He presents a list of 18 common failings encountered time and time again in discussions with mainstream economists:

wpid-mmb9qajq9swpi8xxy76a1. They refer to the idea that “all models are simplifications” as if this somehow creates a fireguard against any criticism of methodology, internal inconsistency or empirical relevance.

2. They argue that the financial crisis is irrelevant to their discipline (and that predicting such events is impossible).

3. They think that behavioural, new institutional and even ‘Keynesian’ economics show the discipline is pluralistic, not neoclassical.

4. They think that the fact most economic papers are “empirical” shows economists are engaging in the scientific method.

5. They think ’neoclassical economics‘ doesn’t exist and is just a swear word used by their opponents.

6. When pushed, they collapse their theories and assumptions into ridiculously weak, virtually unfalsifiable claims (such as revealed preference, the Efficient Markets Hypothesis, or rationality).

7. They dismiss ideas from the past or comprehensive study of previous thinkers and texts as “not science”.

8. They think positive and normative economics are 100% separable, and their discipline is “value free“.

9. They simply cannot think of any other approach to ‘economics’ than theirs.

10. They believe in an erroneous history that sits well with their pet theories, such as the myths of barter and free trade.

11. They think that microfoundations are a necessary and sufficient modelling technique for dealing with the Lucas Critique.

12. They think economics is separable from politics, and that the political role and application of economic ideas in the real world is irrelevant for academic discussion (examples: Friedman and Pinochet, central bank independence).

13. They think their discipline is going through a calm, fruitful period (based on their self-absorbed bubble).

14. They think that endorsing cap & trade or carbon taxes is “dealing with the environment”.

15. They think making an unrealistic model consistent with one or two observed phenomena makes it sound or worthwhile (DSGE and other models are characterised by this “frictions” approach).

16. They think their discipline is an adequate, even superior, method for analysing problems in other social sciences such as politics, history and sociology.

17. They think that the world behaves as if their assumptions are true (or close enough).

18. They think that their discipline’s use of mathematics shows that it is “rigorous” and scientific.


  1. Since economist will not discuss economic ideas without formal models, why not either address the formal models that economists learn in the respective leading graduate schools or list the main economic models that most economics cling too and move from there to criticism?

  2. You can bet on the response:

    “Nobody has come up with a better theory than neo-classical theory, so we should stay with what we have”;


    “to replace ‘the model’ we need ‘another model’. ”


    “The world is flat is the best explanation we have, so we should keep it and carry on with Model”.

    • “A Flat World Model is tractable, and everyone who is anyone surely knows the limitations, so we will keep using it to draw all Policy Maps. Flat World Models explain many critical Facts, when properly stylized as Stylized Flat Facts, showing how empirical Our Discipline has become. If someone using our maps falls off the Edge, it isn’t our fault, because falling off the Edge is clearly accounted for by our Flat World Model. Occasional reports of navigational errors using Flat Earth Maps will be addressed in future research; several intriguing and innovative lines of research have opened on how to add curves to existing, well-tested models. Very exciting stuff. So, you see, we economists know all about it.”

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