In mid-2000, a small group of elite graduate students at some of France's most prestigious universities declared war on the economic establishment. This was to be the beginning of the end of the modern economist.
Concluding that economics had become an “autistic science,” lost in “imaginary worlds” and too much of what they studied bore no relation to what was happening outside the classroom walls. They demanded greater realism in economics teaching, less reliance on mathematics “as an end in itself” and more space for approaches beyond the dominant neoclassical model, including input from other disciplines, such as psychology, history and sociology. They called their movement Autisme-economie.
You see, modern economists had become so detached from what had begun as an attempt by 18th Century thinkers to come to grips with the profound
social and economic changes that were taking place all around them, that the two larger intellectual traditions that had formed the foundations of the study of economics have largely been abandoned: political economy, which is based on the simple idea that economic outcomes are often determined largely by political factors (as well as vice versa) and moral philosophy, which is exactly what it sounds like.
By the end of the 19th century, the new field of economics no longer concerned itself with moral philosophy, and less and less with political economy. Political economy was less vital because government intervention disrupted the path to equilibrium and must therefore be avoided. And as for morality, economics would concern itself solely with the behaviour of rational, self-interested, utility-maximizing Homo economicus. (What he did outside the confines of the marketplace would be someone else's field of study!) The study was coming to be dominated by a conviction that markets produce the most efficient allocation of scarce resources, that individuals always seek to maximize their utility in an economically rational way, and that all of this would ultimately lead to an overall equilibrium of prices, wages, supply, and demand.
And so by the beginning of the 20th century, economists were looking for theorems and models that could help to explain the universe. Although they were dealing with the behaviour of humans, not atoms and particles, they came to believe they could accurately predict the trajectory of human decision-making in the marketplace. From Adam Smith's innovations through John Maynard Keynes's work in the 1930s, economics was argued in words. Now, it would it would be argued in numbers.
Yet, by speaking now in numbers, in averages or what-have-you, modern economics tend to ignore our “animal spirits” – playing down human irrationality, inefficiency, venality and ignorance because those are qualities that are extremely hard to plug into any mathematical equation that purports to model human behaviour. This tendency to define the discipline by its tools instead of its subject matter has led conventional economic theory to ignore the very real and present fact that Homo economicus is a lot more anxious, irrational, unpredictable and complex than most economists can actually hope to understand. And as Smith recognized, he has a moral and ethical dimension that cannot be ignored.
Today, ten years on from the first real glimmer of Post-autistic economics and amidst the wreckage of the unsinkable steamer Economics on the rocks of reality, the resistance continues within economics through the Post-Autistic Economic Network, a newsletter published by those economists who still continue to resist orthodoxy – now known as the Real-World Economic Review. In an editorial in January, 2010, the editors called for major economics organizations to censure those economists who “through their teachings, pronouncements and policy recommendations facilitated the global financial collapse” and pointed to the “continuing moral crisis within the economics profession.”
And that is why we should stop listening to economists, or at least those who have any thoroughly convinced answers.
