Why economists get no respect

Everyone from Asterix to Richard Nixon makes fun of economists. Why does the discipline get no respect?

Economics, or, to be more precise, macroeconomics, has a unique combination of features. First, it touches on vested interests. Second, it deals with commonplace things that it’s easy to have an opinion about, like jobs and money. Many subjects have one or the other. Medicine has the first, and philosophy the second, but the combination means that discussion ends up dominated by “common sense” views that really express a regressive agenda. Common sense often fails because of another feature of economics – the failure of composition. What’s good for one person may be bad at the national level, or vice versa. As one example, if you have a billion dollars, then you’re rich. If everyone has a billion dollars, then you’re Zimbabwe.

Hacks and cranks aside, economists have figured some things out over time. Free trade and free markets are good. A gold standard is bad. Governments should spend in slumps and save in booms. Nothing that rises to the level of the Pythagorean theorem, but smart people from the Romans to the Soviets to the inventors of Bitcoin to the current administration have failed to fully grasp these. Now of course these are broad generalizations – free markets in healthcare are very bad, for example. But the basic ideas are sound.

It’s a pretty short list of good ideas, though, and there’s a limit to how much can be said about them. So economists have added lots of bathwater to the baby, in attempts to get tenure (see rational expectations theory) or play up to generous patrons (see libertarianism). Any argument, no matter how ridiculous or mendacious, will have at least one economist ready to propose it for the right price. And that’s really why economists get no respect; they don’t respect themselves.

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3 Responses to “Why economists get no respect”

  1. Scott Locklin Says:

    I’d take Singapore’s mostly free market health care system over the one in the US (which is more of an oligopoly than a free market). In fact, I’m more or less doing so now. Then again, I’d take Korea’s too, which is all public option. Probably finance and sociology are more important than economics in such matters.

    My own issue with economists: they say they know things they obviously don’t.

  2. Len Vishnevsky Says:

    Free markets are exactly as good for health care as for anything else Ayn Rand would want (phone service, pizza, fire fighting, schools, makeup, etc.). The problem is government constraints. If we were willing to let people die on the streets because they couldn’t afford medical care (I’m not SUGGESTING this, just pointing out the constraint) and if we were willing to put the cost of cleaning up the corpses down to rounding error, then the free market would be a great way for people to spend as much or as little as they wanted and to get the best value.

    On the other hand, if you let insurance companies skim the cream while the state / hospitals get stuck with medicaid and medicare and uninsured whom they must treat anyway you get a lousy deal for everyone who has to pay.

    If the insurance companies had to compete with non-profit exchanges with low overhead they wouldn’t last very long. And they don’t pretend otherwise.

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