The War of the Economists

No offense will, but what took so long? At the first mention of Homo Economicus it should have been obvious that this particular emperor had no useful clothes.

Eh. Homo Economicus isn't the end of the world so long as its a model that makes accurate predictions. The problem is most of the "accurate predictions" economists make are retrospective predictions. Ten years from now we'll be pretending we know exactly what was going on.

One thing it shows you is that guys like DeLong and Krugman are more interested in politics than economics itself.

There's plenty in economics for them to rethink their infallibility on economic policy. However, there's no room for this when politics is involved.

I agree with your concerns. I don't think it is sad that there is no one better to listen to, but I do think it is sad that we listen to people when we don't understand what they are saying and, as you suggest, it is not clear that they understand what they are saying.

As always, caveat emptor: http://economix.blogs.nytimes.com/2009/01/16/ca...

Delong and krugman do not a professional consensus make. No disinterested objective observer would accuse those two of being apolitical either.

The real problem here is the political bias for "do something" advice.

The problem is that ideology and economic policy simply cannot be separated. Progressive policy depends on Keynesian economics, there is simply no way under the sun to pay for an expansive welfare state without printing money and running chronic deficits. Furthermore, laizze faire is morally repulsive in the Progressive world view, and Progressive economists carry this into their work. For these reasons I don't think you will ever see the Progressive academic economist crowd turn away from Keynesianism.

"Sadly, there is no one better to listen to."

You are totally wrong on this issue. While most of the mainstream economists are idiots who failed to understand the implications of the actions that were being taken by central banks and governments, economists from the Austrian School got it right yet again and predicted what had to happen. These economists do not get much attention because they do not advocate central planning and meddling in the economy. As such, they do not get funded by governments or special interests looking for handouts so few people get to hear what they have to say.

Read Jarvis, “The gift in theory”, Dionysius 17 (December 1999), 201-222.

The problem is economics is not, and never was, a "science" in the generally understood meaning of the term. Economics intersects too much with politics to ever be considered purely scientific. The overlap with politics comes from the fact that people (and markets and economies) do not always behave as classical economic theory would suggest. There are no cast iron laws, only probabilities and moral choices. The libertarians' favourite economist, Adam Smith, actually said all this in his 'other' great work, The Theory of Moral Sentiments':

"How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it."

Mr. Denmore is mostly right: economics, for fairly evident epistemological reasons, faces major problems in its claim to be a hypothesis-falsifying objective enterprise, aka 'science', though it certainly is and will remain a science in the sense of being a disciplined and useful pursuit of shared knowledge.

Thus, economists who argue as if their work were scientific in the rigorous sense naturally end up in tedious debates based on incommensurable ontologies, exactly what the natural sciences (through great effort) have managed to avoid.

In contrast, those economists who recognize that they can provide a rational and empirically-based disciplinary perspective on important events -- not 'objective science', but, like history or sociology, a set of plausible and coherent explanations -- can and should continue commenting on public policy related to their discipline. And, like all other contributions to political debate that rest on thoughtful, empirical, but epistemologically contingent assumptions, their contributions must be weighed in light of their assumptions and other understandings, aka 'ideology', and in light of their potential consequences in our current predicament.

Economists aren't professionals in the same sense as plumbers, surgeons, or airline pilots. Their level of professional achievement is uncorrelated to their ability to bring to bear what they've learned in their sub-specialties on the issues of the day, there is no yardstick for basic competence, and the consequences for being wrong are minor. Taleb's takedown of the so-called "Nobel Prize" in economics covers this nicely. However, to your plaint, I'd suggest casting your net a little wider than perhaps you have already: a diverse group of non-academic bloggers (some of mysterious affiliation) have been smarter, right-er, and earlier on our current crisis. Like everyone, they have ideologies, but they spend less time than the "professional" economists defending tiny pieces of intellectual turf. I recommend Mish Shedlock at Global Economic Analysis , "Jesse" at Crossroads Cafe, and "Cassandra" (does Tokyo) for starters.