"The more the economists, the worst the economy"
The disagreement in theories, model as well as methodology among economists and policymaker has been a subject of inquiry in recent time. The battle ground have been conference, seminars, and journal publications. certainly, it is normal for theories put forward during economic fluctuation to upturn during the time of stability. However, the disagreements in economics literature have call for urgent discussion...……..
Dear Olatunji A Shobande
Economists do not agree on the econometric methods and instruments to be used to assess Micro and Macroeconomics Theories and Models, since they ultimately depend on the ideology and policy to be followed and on which they base their arguments.
For example:
- The free market economy satisfies first world countries
- For some developing countries (depending on whether they have capitalist, democratic or autocratic governments), these econometric policies, instruments and methods suit them
- But to none of the third world countries; this approach suits them, since it only enriches the oligarchy and impoverishes to the extent of misery, a large part of the population.
regards
Jose Luis
Because they calculate things in a logic different from the others of the individuls.......they are very accurate
Dear Olatunji A Shobande
Economists do not agree on the econometric methods and instruments to be used to assess Micro and Macroeconomics Theories and Models, since they ultimately depend on the ideology and policy to be followed and on which they base their arguments.
For example:
- The free market economy satisfies first world countries
- For some developing countries (depending on whether they have capitalist, democratic or autocratic governments), these econometric policies, instruments and methods suit them
- But to none of the third world countries; this approach suits them, since it only enriches the oligarchy and impoverishes to the extent of misery, a large part of the population.
regards
Jose Luis
Very good topic for discussion, I am not Economist, hence following the discussion.
Only the reason for this situation is that the theories in economics are built on assumptions. Most of the times it is assumed some variables are constant (but they vary in reality) to establish the behavior of some other variables.
Good question. Many of them seem to believe in theory and not reality.
After all the disagreements, debate and discussion we are no better off when compared to outcome. What happen? Economic theories can explain past behavior but to predict the future is difficult. After each crisis, economists come out with a new explanation. The assumptions used in the model changes and human behavior is difficult to quantify, generalize and represented in a few theorems and equations.
يعتمد ذلك على طبيعة الظروف بين أطراف أصحاب الإقتصاد وحجم التخطيط ونوع الاستراتيجيات المعدة للحالة الإقتصادية
Mr. Olatunji A Shobande. This is really an unfair statement, unless it is meant as a joke, like saying " if two economists debate an issue, they end up with three strongly different views". They might often disagree on normative issues, like many people do, but on positive ones, ... if they are well trained academically I think they would most probably agree !
I like this. We are now seeing a fundamental shift in thinking globally. The world Bank in 2016 stressed focus was inclusive Development. For years we have been hired by monetarism, advocated by Friedman and Hayek, and taken up by Thatcher and Reagan that markets distribute wealth. We now know this in not true. Excessive and rampant monetarism has made rich richer. The privatisation of public utilities made rich richer. The trickle down economics so called never reached middle class, let alone poor. Some leaders, it Trump think marketization is still best He wants to give rich companies more tax cuts. Companies like Amazon, google make huge profits and pay many staff poorly. We need to advocate a movement against monetarism, we do need states to regulate excess power of MNCs and give back resources to government...
Yes great ideas, but to add to debate, what economic ideas are shaping political policies? I raised issue of monetarism which has shaped global economic development. That is, all society is best served by preference to the privatisation of services, even those sectors which were publically owned such as gas and electric. These ideas were based on so called Austrian school, Friedman, Hayek and also Nozik. Just out of interest Thatcher in her biography, and several other politicians wanted to dismantle the NHS, and privatise health insurance in the 80s. We love the NHS in UK, and are strongly committed to free health care for all. In the 80s nearly all countries followed principles of market and privatised public companies. We are now in an era of complete change, and institutions such as World Bank, ILO are arguing that eradicating vast inequalties should be main driver, not measures of GDP. So I am asking, what are philosophies shaping economic policy in different countries? This has enormous implications for Global North and Global South. For example the CCP in China is still following communism, with some market ideas. However, note that many companies in China are publically owned, which they call State Owned Enterprises. In UAE, they are governed by principles of Sharia and what is termed an Islamic moral economy....so again asking for insight of policies....the world of change....what interesting times we live in....
Economics is a social science, so opinions matter.
If everyone agreed with each other, there would be no debate.
Life would be so boring.
Thanks Michael..I know some ecnometricians, who are mathematical modellers, so big data they love, they want to scientize. As if this try h(s). Think of climate change evidence. But then Feyerband said all scientists are liars...they create experimental designs to try to reaffirm theory...back to social construction of knowledge.......and truths .....
Disagreement is not just in the field of economics but also in other disciplines. The modern world that our governments and commercial enterprises have created doesn't actually reach out to everyone in getting a better standard of living, thus creating a feeling of destitution, desperation, despair, and death. The failings in models, ideology, theories or teachings are there to remind us that we can always do much better collectively towards perfection. So that's why economists, and other academic/policy practitioners disagree; it's highly acceptable as long as there's compassionate interest to help make things a better place to live or at least breathe in peace. I encourage you all to point out the elephant in the room, tell the emperor that he has no clothes on, and look for solutions instead of dwelling on the problems.
Yes so totally agree ravee. That's why we need insight into economic thinking. We know the global north has robbed the global south. But we are in a sea change time...world Bank in 2016 changed focus to trying to end Inequality, the UN SDGs are trying to build better lives. We are moving way from neoliberakism. For everyoned benefit. One way to empower is education...and if you know that Washington Consensus was all neoliberalism and monetarism you can shout neoliberal not worked, it's causing rich to become richer. Many politicians in hands of business but not all. The Islamic Development Bank is a leader of reforms in global economy...we know the answers, minimum wage everywhere, investing back in public services and job creation....and a simple thing to make companies like Amazon and Google to pay tax.....remember too Russia and China have different politics...o could go on...
Chia-Lin Chang It is intuitive to begin by tracking the historical battle behind the disagreement among economists and how conflict emerged in our economic ideology, theories as well as methodology uses. I will only unveil the root as follow: (1) The physiological necessities for life; (2) Neglecting the concepts of land as a means of production given rise to misallocation of resource; (3) economists failure to accept the field of ecology in resource allocation; (4) physiocratic concepts and exploitation ideas. I will continue as the debate unfold.
Economics is about (sharing/distributing/producing) the material resources of and for life on earth.
Even the most objective computations cannot hide the rational and ethical dilemmas of human economic action!
The introduction of the 'Nobel Prize' (1968) has not much bettered the economic discourse, i.e. it is an institutional power play for academic prestige.
We should much more focus on win/win bargaining methods of human economic existence and get ready of the ancient (territorial) win/lose games.
Am in line with Michael John McAleer Chia-Lin Chang , concerning the economic topic of (freedom of) human choices.
I recommend:
https://en.wikipedia.org/wiki/Economics_in_One_Lesson
as a good read.
-----------------------------------------------------
Preprint Political Economy and Decision Making: Methodical Reflection...
Preprint THE DONOUSA MIRACLE
------------------------------------------------------------------------------------------------
To sum it up: Bargaining about human living chances is not an easy walk.
--------------------------
https://www.sociostudies.org/
Thanks Stephen Michael for insights as fascination with stratifying, measurement underplays the human processes of evaluation which is why I mentioned Feyerabend. I am Thinking as well of C P Snow and his 2 cultures treatise, yet if we think about the philosophy of knowledge, reasoning, deduction, etc were foundational to modern physics and so forth. It is sad as so many degree programs lack philosophy, and yet has been a surge in MSc in Business Analytics everywhere...
https://fivethirtyeight-com.cdn.ampproject.org/c/s/fivethirtyeight.com/features/economists-are-bad-at-predicting-recessions/amp/
Economists may indeed be bad at predicting recessions, but they do it far better than non-economists.
Economists are not bad at predicting recessions, but they are constrained by institutional difficulty.
Economists are from different schools of different economic theories. They usually dis agree
Great discussion. I am very interested in Islamic economics, have read extensively and greatly admire principles wagf and so forth. There is also greater commitment for redistribution...and values social and economic development. Look at countries with Islamic Development models, many doing very well
I should also add to read World bank and Islamic Development Bank joint report on future if Islamic Banking. I would argue that finally there is a shift at world Bank in addressing social issues, primarily UN role. UAE great example of an Islamic moral economy...do you know that UAE has more women in government than US or UK!!! Some of G7...take a look at Japan, much inequality and constraints for women
I think they differ from each other for proposing as solution for remedying an ill economy because there is no one single solution to an economical problem. There are multiple solutions for the problem. If one tries to find the optimum solution among all solutions this will help reduce the possible solutions methods.
Best wishes
To Olatunji A Shobande :
Disagreeing loudly and taking extreme positions on many issues, as many famous economists have done, most definitely attracts attention.
Colleagues..think it is important to know broad range of economic theories/political economy for benefit of students. They can then decide for themselves. I did not appreciate Michael that extreme position was a tactic.....is this true for economists globally? My background sociology..I do have a good friend who is an economist professor and he said that some of econometrics writing's are so complex that debates are with literally only dozens across globe. I am in business schools and economic teaching very little. In fact many of expansion of unis in ME excludes Economics, politics, IR, sociology ...and I feel very important to expand econ subjects. The diversity of politcal regimes fascinating, especially when China, Cuba etc advocate many socialist issues. You will like this Michael as on way to Oxford for keynote tomorrow on global Inequality , and WEF gender inequaliy measures ranks USA at 51, out of 149 countries. For political gender empowerment measure USA is 98 out of 149. The beautiful people in Cuba rank 16, and beautiful people in Mexico rank 27....the Shithole countries, IE Africa include Rwanda at 4, S Africa 17,, Uganda 18.
.....etc Can you believe it, USA supposedly liberal and free ranks lower on gender political empowerment than many African states, and overall score of 51 is one of lowest for developed economies...
Extreme positions are always a tactic, and they frequently work.
Economics is based on theories and models of an ideal world. As such they give "perimeters", "outlines" or highlights within which life situations fall. Proposals are compatible to different sociological models and theories. Solutions to problems depend on ideology and political environment rather than unique factors like geopolitics, culture and history which better define the problem itself. Modern economics reminds me of medicine in the Middle Ages with its all-curing panacea, one-size-fits-all prescriptions. There are definite barriers between economics, reality and society, raised and sustained by politics and forms of governance at a global and local level.
There is no such thing as truth in economics.
Economists disagree because they can.
Inadequate methods: Economists also disagree because their methods are not good enough to reveal the whole truth. Economic theory is an attempt to explain and interpret economic data, for example, to determine the causes and effects of economic events.
"Economists disagree because their methods are not good enough to reveal the whole truth."
Jasim Hassen, 8 September
"Economists also disagree because their methods are not good enough to reveal the whole truth."
Sherzad Ramadhan, 12 October
At least some economists agree with each other.
@ Michael, Are you sure of this? Or its institutional difficulties that failed to allow truth to be established.
This is due to the different economic theories adopted by each of them, and thus reflected negatively on the national economy.
This question is really irrelevant. It's like saying there should be agreement amongst philosophers
We have so many approaches to political economy, to understanding work, labour, organization, inequality, and determining vast array of political philosophies, how can we explain social change, how can we model future scenarios...life is complicate d...
First of all economics is not an exact science. Therefore people have beliefs in certain theories and make their arguments based on their pet theory and try to make predictions. Secondly economics has moved into the realm of politics. Once anything is made political it is not that much trustworthy any more. For example a leader claims success based on some economic index which may have little relevance based on what they did to impact it.
Human behavior, which is inherently variable, comes with differing understanding
Their difference opens the horizon to other sciences
@ Beverly, I think we need more precise arguments for why the question seems irrelevant?
Management of the economy needs advanced expertise in the field of economics, it is the field of its critical decisions and the varying experiences of multiple decision-makers can cause economic crises.
Olantujnti 11 october
We need precise questions to how one conceives of world, economic organization, forms of political governance. What type of societies we want to develop....
We have China and CCP that is advancing, we have socialist regimes Cuba, authoritarianism, Russia, market USA, Islamic, Gulf, social democrats EU...there is not one model for how to govern Societies. But if teaching economics in a university you need to cover Plato, Rousseau, Ricardo, Galbraith, Hayek etc...then you need to think about writings of Chapra, Ibn Khaldoun, Mao, Marx...you cannot streamline economic thinking into one model, enough said.
@ Beverly, I can now know your argument. You are worried about the nature of international financing and political structure of the world economy. That sound interesting, however, there some issues of contemporary that we economists needs to address, if we must think of the past economic philosophy which is the motivation behind the question. Hope this help!
Truth in economics is a fallacy.
Institutions have nothing to do with truth.
You cannot seperate economics from political institutions.....'You are worried about the nature of international financing and political structure of the world economy' exactly... I'm not worried..you've just outlined diversity that exists.
Well I'm off the chart as I greatly value Islamic economic theory....and not likely to get much debate on that here on RG....
@ Beverly, it might be interesting to shed more light on the emergence of the new Islamic economics mandates, perhaps it might provide solution to the inquiry.
Thanks Olatunji
It's important to acknowledge that Marx, Engels, and their reference to formation of capitalism, using Ricardo and this frame provides insights into socialist or right authoritarian regime (although Marxism could be called authoritarianist).
I like to use Hunger Games Model to illustrate neoliberalism, District 1 are the winners, owners, fund managers, the 1 per cent of wealth, the middle class being squeezed, Districts 2-10 and getting teeny, and District 12 getting larger. For Islamic economy read Chapra 1993....and then we could debate.
But back to Russian gang, philosophy, literary theory, Putin's leadership, Einstein.....I love the net for infinite knowledge possibilities, but feel dismayed uni students using Snapchat, Instagram, and reading about Love Island, I'm a celebrity get me out of here and New Jersey Housewives...
I have to agree with Jose Luis Garcia, and add that ideologies stem from support of different political systems and social structures. Economics belongs to the realms of social sciences for a good reason. Laissez-faire versus regulated economics is essentially one political system contradicting another.
Dear Colleagues and Friends from RG, Disagreements between economists usually relate to solving specific complex macroeconomic problems, providing formulas to solve problems related to key issues, determinants of the development of the national economy, building economic and material well-being of citizens, designing models describing complex, multi-faceted macroeconomic problems, providing the best pro-development formulas, social interventionist policies - economic, the issue of the effectiveness of economic systems, taking into account the division of economic sectors into public and commercially functioning sectors, etc. Differences of opinion are a motivating factor for creating new formulas and concepts, models, formulas for providing solutions to specific complex economic problems. Disagreements, polemics, discussions, brainstorming are an activating factor for creating new, better formulas and concepts, models and formulas for providing solutions to specific complex economic problems. Opinions among economists are a factor in the development of economic sciences. Thanks to discussions, polemics, brainstorming, exchange of experience in the field of scientific research, economics science is still developing and is more effectively used to solve specific complex economic problems.
Best wishes
Dariusz Prokopowicz
That is what economists do, far more so than in any science discipline.
When nation's Economic interest is controlled by the vested interest of some politicians by force - The Economic modelling fails !
Yes true Darius. Not all are premised on complex econometrics
See Arthur Lewis viewed as founder of Development planning, economics and got Nobel Prize for economics. We are witnessing a sea change, with neoconservatives charged with wielding inequality rather than ending it, and many global institutions questioning distribution of wealth. Check out Klaus Schwab the WEF founder, and an advocate for MNCs.. I really don't know where this will go, given revolutionary issues Klaus asked MNCs to tackle.....we have rising nationalism, growing commitment to green issues, and CSR (not sure green issues are always CSR), and now Covid 19 which needs global colloborative responses. Boris switching tactics for covid strategies, Trump as well. Saying he should have pursued career halting pandemics rather than run for president.....we live in the best of times, the worst of times, and the really interesting times...
So far we have not seen the birth of giant economists such as Adam Smith, Treasure, and others
At the moment, the world needs new theories that fit into the digital economy
Good point Ali
This needs to think about digital power and networks, digital democracy , digital inclusion....the digital times...can I suggest you read Zuboff , Surveillance Capitalism, 2019 , HUP. Groundbreaking. It addresses the complexities of the digital economy, control, leadership, platform markets etc. I think this will be a contender for Nobel Prize in years to come
Economics can be too theoretical or too empirical. And theoretical and empirical part also can have many approaches.
Get hold of Pikkety, an economist again forecasting change.
Just what will covid mean for jobs, growth, policy, who will govern. We've never been here before. But shareholder capitalism cannot go on.....at dawn of new cycle
- Badges
- Science topic
- Similar topics
- Social Science
- Media
- Journalism