A quick bit of fun regarding criticisms of economics. It is a post by a blogger listing 18 “bad criticisms of economics”. I think this might be worth engaging with because (a) some of the criticisms are highly subjective and would require further argument and (b) some of the criticisms should be listened to by critics of economics. I will list all 18 and provide responses below.
1. Treats macroeconomic forecasting as the major or only goal of economic analysis.
It is unclear what the author means. Surely most macro-based criticisms would also imply that policy formulations are important. The author needs to think this one through more as it strikes me as a strawman.
2. Frames critique in terms of politics, most commonly the claim that economists are market fundamentalists.
This is true. Poor criticism does do this. If the critics articulated themselves properly they would point out that marginalist economics is based on a core assumption of a market and then various inefficiencies etc. are added. If this latter is a poor criticism then the author has an issue with much contemporary philosophy of science (Lakatos etc.).
3. Uses “neoclassical” as if it refers to a political philosophy, set of policy prescriptions, or actual economies. Bonus: spells it “neo-classical” or “Neo-classical.
Agreed. As I laid out here, “neoclassical” refers to a very specific type of economic reasoning. When properly applied, however, the term is perfectly clear and functional. It is not a critical term per se (one could support the methodology) but it can be used to denote a field that can then be criticised.
4. Refers to “the” neoclassical model or otherwise suggests all of economic thought is contained in Walras (1874).
This can be fruitful in some circumstances (and provided the moniker “neoclassical” is not used). Walras’ model is the kernel of any model based on general equilibrium assumptions. General equilibrium modelling — including DSGE modelling — can and probably should be criticised and starting from Walras’ model is often not a bad idea because if the fundamental assumptions of this model are not worthy of consideration more advanced models likely are not either.
5. Uses “neoclassical economics” and “mainstream economics” interchangeably. Bonus: uses “neoliberal economics” interchangeably with either.
Agreed. Again because of the point made under point 3 above. Also, there is no such thing as “neoliberal economics”. Neoliberalism is a political ideology, not an economic doctrine.
6. Uses the word “neoliberal” for any reason.
“Neoliberalism” is well-defined in the literature and can be used in analysis. Using it to make critical comments about economic theory rather than policy does seem misguided though. But given that economic policy is also a part of “economics” and the author purports to be dealing with “criticisms of economics” then it is hard to see why this term should be censored. Perhaps the author would care to rewrite 6 as: “Uses the term “neoliberal” to criticise pure economic theory”.
7. Refers to “corporate masters” or otherwise implies economists are shills for the wealthy or corporations.
If they imply that all mainstream economists are such shills then yes, this is nonsense. If they imply that certain economists who are actively shilling for corporations are shills I see no such problems. If the critic is wrong a libel suit will sort that out rather quickly.
8. Claims economists think people are always rational.
Agreed. This is a poor criticism. Rather critics should note that marginalist economics generally assume rationality as a core component of their models and deviations from rationality to be anomalies. Criticism can then follow from there.
9. Claims financial crisis disproved mainstream economics.
I assume that the author means “the crisis of 2008”. Does this disprove mainstream theory per se? No. But it certainly calls into question many very important aspects of mainstream theory. I shall not list them here.
10. Explicitly claims that economics is not empirical, or does so implicitly by ignoring empirical economics.
This is tricky because some assume that econometric modelling is empirical while there are good reasons — highlighted by leading statistical mathematicians — to claim that it is not. If one disagrees that econometric modelling is empirical then much of mainstream economics is indeed non-empirical and true empiricism is rare. There is also the issue, which I think many critics are getting at, that some economics models are actually contradicted by available empirical evidence. This is self-evidently true.
11. Treats all of economics as if it’s battling schools of macroeconomics.
Certainly if you are trying to lay out debates in macroeconomics then the major schools have to be noted. Does this constitute economics as a whole? Of course not. I’m not sure who claims that it does.
12. Misconstrues jargon: “rational.”
Certainly. But defenders often also misconstrue this jargon. And there is a case to be made that this jargon is semantically meaningless.
13. Misconstrues jargon: “efficient” (financial sense) or “efficient” (Pareto sense).
14. Misconstrues jargon: “externality“.
I’m not clear on this one. I know what the term means but I do not see it regularly pop up in criticism.
15. Claims economists only care about money.
Most critics claim that mainstream economics neutralises money, so this is an odd point. But if some critics do this they should indeed be taken to task.
16. Claims economists ignore the environment. Variant: claims economics falters on point that “infinite growth on a finite planet is impossible.”
This is actually a pet peev of mine, so I have to pretty much resoundingly agree.
17. Goes out of its way to point out that the Economics Nobel is not a real Nobel.
Actually this is a very important thing to point out. The history of this is currently being written and from what I have seen this was a very important move to give economics a scientific mantle it likely does not deserve and suppress political criticism of central bank independence.
18. Cites Debunking Economics.
If a specific argument is not cited and fully understood then, yes, I agree. But there is much in Keen’s book that is interesting.
All in all, some good points, some bad. But I agree that criticism needs to be sharper. Some of the points, however, fall into the category of “signs that you’re not dealing with a first rate defender of mainstream economics”.