Naive Experts: Economists and the Real World
27th July 2010
It is considered something of a rude question, nevertheless I think it fair to ask why 90% of all economists missed the coming of the current disaster. One doesn’t wish to judge too harshly. After all, everyone makes mistakes, even scientists. And if economic science missed this one, it wouldn’t be fair to use such a mistake to call into question the whole science. None of us would wish to be judged by one mistake. Should we not extend the same courtesy to economic scientists?
The problem, however, is that the same 90% of all economists also missed the last crises, and the one before that as well, and before that, and so on. In fact, their record of being able to diagnose and treat economic problems is about zero. And their prescriptions always seem to be counterproductive: the recommendations to limit government always make it grow, their advice on limiting taxation always makes it more, their prescriptions on growing the economy only leads to the illusory growth of bubbles, etc. Put it this way: If your doctor had this same track record of diagnosing and treating disease, you’d be dead by now.