Well argued and I am in complete agreement. I have said these things since undergraduate and I will be finishing my master's in November. Economics is such a silo. Which is why I love people like Carolina Alves who are leading the charge to decolonizing Economics. The weird assumption of rational agents and other absurd assumptions drive me crazy.
However, I am optimistic. More and more people are talking about it. I am also excited about new fields like Cliometrics that use mathematical models to derive insights from History. The road may be rocky but it is traversible.
This was supposed to be a reply to Gabriel's posting. Not sure why it is not showing as such. Anyway...:
Hmmmm. This comment appears to me entirely consistent with the perspective of economics critiqued in the main article - and in so doing, makes clear some of its principal problems. First, the conflation of facts and knowledge. The output generated by econometrics is most definitely knowledge. But it is only a fact insofar as it is built on specific assumptions that rarely, if ever, are made explicit. That is, the output generated is conditioned by the assumptions made, the quality of the data, and is only a 'fact' for the data used. There is too much evidence that of all 'scientific' subjects, Economics has pretty much the worst record on reproducibility and replicability (and not, they are not the same!) To give the example I used to give my students, Bill Phillips did not prove an inverse relationship between inflation and unemployment - he merely did not disprove it. That came later as the relationship identified for one country at one point in time broke down there...and elsewhere.
This is where a study of methodology and research philosophy would help. On my MSc, of the 28 students (it was a very long time ago, before TPG recruitment went through the roof), I was the only one who had studied such things at UG level. Interestingly, on the MSc, it was taught as part of the core econometrics course, the lecturer being not only a brilliant applied economist, but also someone who understood the limitations of what he was doing and teaching.
Given all of this, the nature of 'science' when applied to Economics is quite different to so many of the 'pure and applied sciences' taught in other parts of a university. How do you make chemical compound X? By combining chemicals A+B+C in known quantities under known conditions. How do you people to reduce their energy use? What data do we use? How big is the Rebound Effect? How reproducible and replicable are those findings?
The problem is not that Economic models are only locally rational. The problem is that orthodox/mainstream Economists are unwilling or unable to acknowledge the limitations inherent in any Economic analysis, quantitative or qualitative. And it is that which raises the fundamental questions seen in the article. There are multiple schools of heterodox Economics that attempt to address these shortcomings, but they are either ignored or dismissed.
When HM The Queen asked why nobody saw the Financial Crisis coming, the real answer is that plenty of people did. But they were being ignored because the Economic models and the assumptions underpinning them were not capable of addressing fundamental flaws in the Economic system. But it is impossible to account for factors that are not being ignored in the first place, by those whose models had intellectual primacy - for better and for worse.
This makes me recall Amartya Sen’s words to the effect that economists should do more philosophy, and philosophers should do more economics.
I am not a professional economist, but I do take economics as a discipline seriously in my Substack Journal: “The possibility of democratic choice”, where I try to combine political philosophy, economics and social biology. I feel we need a discipline that integrates all three, and one that also incorporates political philosophy from China and elsewhere.
Economists need more political science trainings, despite the facts that both Economists and Political Science share same social science methodological approach, understanding international politics would make an Economists to be a good analyst. And the subfield that emerged as been around Political Economy which offered better forecasts for many corporate words of today.
You cite Blanchard’s critique of the recent wave of op-eds on the “state of economics,” but you don’t actually address his points. Go open any top economics journal—seriously, pick one at random—and you won’t find people “preaching” that markets are perfectly efficient or that humans are perfectly rational. Those clichés died a long time ago. What gets taught in second-tier universities is a completely different issue. And whether those schools should teach research at the frontier? That’s a separate debate entirely. Don't mix these two ideas up.
Now, your point about the narrow scope of empirical work? Fair. Applied econometrics can be painfully local—estimating treatment effects in small, quirky cases where we happen to have some natural experiment. But here’s the thing: academics aren’t there to hand policymakers a laundry list of what to do. That’s normative—value judgments—and the whole point of research is to produce facts (knowledge), not opinions (belief). The job is to say, “Here’s the best estimate we have,” and let policymakers decide what to do with it.
And yes—economics is a science. Being a science isn’t about whether you study atoms or interest rates. It’s about method. Use empirical and theoretical tools rigorously, and you’re producing knowledge. Ask purely normative questions, and you’re producing belief. Academics are in the knowledge business. That doesn’t mean economists shouldn’t join policy debates—it just means that’s not the main reason they exist.
Finally, your recurring “rationality” critique is a whole different subject matter that I could talk about extensively. But please, stop pretending models are supposed to be photorealistic miniatures of the economy. They’re abstractions. They strip away detail to make mechanisms clear—because a model that tries to match reality in every detail is useless. Go read Borges’ On Exactitude in Science (https://en.wikipedia.org/wiki/On_Exactitude_in_Science). The map as big as the territory is a joke for a reason. Models are meant to make simplifying assumptions to study phenomena in cases where empirical methods fail to do so.
Interesting piece. I agree that economics often focuses too much on abstract models and risks losing touch with real-world issues. Models are useful, but they need to connect with people’s lived realities poverty, inequality, culture, and everyday struggles. At the same time, I think we shouldn’t dismiss modeling entirely, since it can clarify complex problems. The real challenge is finding a balance between technical skills and human understanding.
I take your point that the halls of economics orthodoxy are disembedded from realities of society but can you imagine paying £12,000 a year for an economics degree and then having to spend 1/5th of it learning about colonialism and white guilt? I'd be absolutely livid and back in the halls of economic orthodoxy straight away.
Well said prof. Economics need more political science approach. Model alone can predict societal outcome. And political science and economic, in recent times have use the same methodology but the rational choice theories and historical inertia is vital for better economist. Economics need more political science rigor more than ever, which led good public policy development or political economists. The field of economic need a strong reform, most especially the curriculum. That's why many universities are now incorporating Political Economy as whole subject without removing both economic and political science developmental approach. The same analysis driven by Acemoglu and its contemporary on how they use institutionalism to address economic outcome of every societies.
I am in agreement of your article sir. I am currently an economics undergrad in GIPE. I think my college has recognized this fact and brought in courses like History of political thought which basically explains how political thought emerged in the world. It's truly a great subject. Politics and economics go hand in hand I would love learning political science along side my econ degree. I think it would make me a better thinker in this discipline. Great read!!
You might enjoy this alternative we’re about to go fully public with… Creditism at Common-Planet.org. Updating the project to reveal the new strategy soon.
Excellent piece - rings true with my experiences - I attempted to pivot from mathematics (after my BSc) to economics (which I had never studied before) via an MSc. This was relatively straightforward to do well in given it was all mathematics again (the undergrad came in handy) but I never really felt I learned any actual economics. After a two year diversion in a bank, I became a macroeconomist, and after four years as a practitioner I am ready to actually try to re-engage with the theory… something is very wrong here - I am still shocked that I never learnt anything that felt like real economics in a year long MSc
A couple of related reflections on a different dimension of this debate. Both relate to a particular UK research intensive university. First, a belief was expressed that academics cannot mark essays. Presumably this academic sees economics strictly in right-wrong terms. Second, a senior academic expressed frustration that their really bright students struggled to write good quality final year dissertations. But for the first two years, seminar activities consisted principally of answering technical, primarily quantitative exercises. They were then asked, with little or no preparation, to write several thousand words on a topic of their choosing. That department prepares students really well for further academic study of Economics, but what else they are prepared for, who knows...
"Universities are training economists who can build models but don't understand the economy" - This aptly captures how I felt when I started a second bachelor's degree in Economics in a UK university. Lots of mathematics, statistics, and models, and yet, I had no real understanding of how the economy works.
Well argued and I am in complete agreement. I have said these things since undergraduate and I will be finishing my master's in November. Economics is such a silo. Which is why I love people like Carolina Alves who are leading the charge to decolonizing Economics. The weird assumption of rational agents and other absurd assumptions drive me crazy.
However, I am optimistic. More and more people are talking about it. I am also excited about new fields like Cliometrics that use mathematical models to derive insights from History. The road may be rocky but it is traversible.
Excellent piece.
This was supposed to be a reply to Gabriel's posting. Not sure why it is not showing as such. Anyway...:
Hmmmm. This comment appears to me entirely consistent with the perspective of economics critiqued in the main article - and in so doing, makes clear some of its principal problems. First, the conflation of facts and knowledge. The output generated by econometrics is most definitely knowledge. But it is only a fact insofar as it is built on specific assumptions that rarely, if ever, are made explicit. That is, the output generated is conditioned by the assumptions made, the quality of the data, and is only a 'fact' for the data used. There is too much evidence that of all 'scientific' subjects, Economics has pretty much the worst record on reproducibility and replicability (and not, they are not the same!) To give the example I used to give my students, Bill Phillips did not prove an inverse relationship between inflation and unemployment - he merely did not disprove it. That came later as the relationship identified for one country at one point in time broke down there...and elsewhere.
This is where a study of methodology and research philosophy would help. On my MSc, of the 28 students (it was a very long time ago, before TPG recruitment went through the roof), I was the only one who had studied such things at UG level. Interestingly, on the MSc, it was taught as part of the core econometrics course, the lecturer being not only a brilliant applied economist, but also someone who understood the limitations of what he was doing and teaching.
Given all of this, the nature of 'science' when applied to Economics is quite different to so many of the 'pure and applied sciences' taught in other parts of a university. How do you make chemical compound X? By combining chemicals A+B+C in known quantities under known conditions. How do you people to reduce their energy use? What data do we use? How big is the Rebound Effect? How reproducible and replicable are those findings?
The problem is not that Economic models are only locally rational. The problem is that orthodox/mainstream Economists are unwilling or unable to acknowledge the limitations inherent in any Economic analysis, quantitative or qualitative. And it is that which raises the fundamental questions seen in the article. There are multiple schools of heterodox Economics that attempt to address these shortcomings, but they are either ignored or dismissed.
When HM The Queen asked why nobody saw the Financial Crisis coming, the real answer is that plenty of people did. But they were being ignored because the Economic models and the assumptions underpinning them were not capable of addressing fundamental flaws in the Economic system. But it is impossible to account for factors that are not being ignored in the first place, by those whose models had intellectual primacy - for better and for worse.
This makes me recall Amartya Sen’s words to the effect that economists should do more philosophy, and philosophers should do more economics.
I am not a professional economist, but I do take economics as a discipline seriously in my Substack Journal: “The possibility of democratic choice”, where I try to combine political philosophy, economics and social biology. I feel we need a discipline that integrates all three, and one that also incorporates political philosophy from China and elsewhere.
Economists need more political science trainings, despite the facts that both Economists and Political Science share same social science methodological approach, understanding international politics would make an Economists to be a good analyst. And the subfield that emerged as been around Political Economy which offered better forecasts for many corporate words of today.
You cite Blanchard’s critique of the recent wave of op-eds on the “state of economics,” but you don’t actually address his points. Go open any top economics journal—seriously, pick one at random—and you won’t find people “preaching” that markets are perfectly efficient or that humans are perfectly rational. Those clichés died a long time ago. What gets taught in second-tier universities is a completely different issue. And whether those schools should teach research at the frontier? That’s a separate debate entirely. Don't mix these two ideas up.
Now, your point about the narrow scope of empirical work? Fair. Applied econometrics can be painfully local—estimating treatment effects in small, quirky cases where we happen to have some natural experiment. But here’s the thing: academics aren’t there to hand policymakers a laundry list of what to do. That’s normative—value judgments—and the whole point of research is to produce facts (knowledge), not opinions (belief). The job is to say, “Here’s the best estimate we have,” and let policymakers decide what to do with it.
And yes—economics is a science. Being a science isn’t about whether you study atoms or interest rates. It’s about method. Use empirical and theoretical tools rigorously, and you’re producing knowledge. Ask purely normative questions, and you’re producing belief. Academics are in the knowledge business. That doesn’t mean economists shouldn’t join policy debates—it just means that’s not the main reason they exist.
Finally, your recurring “rationality” critique is a whole different subject matter that I could talk about extensively. But please, stop pretending models are supposed to be photorealistic miniatures of the economy. They’re abstractions. They strip away detail to make mechanisms clear—because a model that tries to match reality in every detail is useless. Go read Borges’ On Exactitude in Science (https://en.wikipedia.org/wiki/On_Exactitude_in_Science). The map as big as the territory is a joke for a reason. Models are meant to make simplifying assumptions to study phenomena in cases where empirical methods fail to do so.
Uni’s should have a “survey of economics” course that gives an overview of they various disciplines related to the economy.
Interesting piece. I agree that economics often focuses too much on abstract models and risks losing touch with real-world issues. Models are useful, but they need to connect with people’s lived realities poverty, inequality, culture, and everyday struggles. At the same time, I think we shouldn’t dismiss modeling entirely, since it can clarify complex problems. The real challenge is finding a balance between technical skills and human understanding.
I take your point that the halls of economics orthodoxy are disembedded from realities of society but can you imagine paying £12,000 a year for an economics degree and then having to spend 1/5th of it learning about colonialism and white guilt? I'd be absolutely livid and back in the halls of economic orthodoxy straight away.
Well said prof. Economics need more political science approach. Model alone can predict societal outcome. And political science and economic, in recent times have use the same methodology but the rational choice theories and historical inertia is vital for better economist. Economics need more political science rigor more than ever, which led good public policy development or political economists. The field of economic need a strong reform, most especially the curriculum. That's why many universities are now incorporating Political Economy as whole subject without removing both economic and political science developmental approach. The same analysis driven by Acemoglu and its contemporary on how they use institutionalism to address economic outcome of every societies.
I am in agreement of your article sir. I am currently an economics undergrad in GIPE. I think my college has recognized this fact and brought in courses like History of political thought which basically explains how political thought emerged in the world. It's truly a great subject. Politics and economics go hand in hand I would love learning political science along side my econ degree. I think it would make me a better thinker in this discipline. Great read!!
You might enjoy this alternative we’re about to go fully public with… Creditism at Common-Planet.org. Updating the project to reveal the new strategy soon.
Excellent piece - rings true with my experiences - I attempted to pivot from mathematics (after my BSc) to economics (which I had never studied before) via an MSc. This was relatively straightforward to do well in given it was all mathematics again (the undergrad came in handy) but I never really felt I learned any actual economics. After a two year diversion in a bank, I became a macroeconomist, and after four years as a practitioner I am ready to actually try to re-engage with the theory… something is very wrong here - I am still shocked that I never learnt anything that felt like real economics in a year long MSc
Well said sir and thank you for saying it.
A couple of related reflections on a different dimension of this debate. Both relate to a particular UK research intensive university. First, a belief was expressed that academics cannot mark essays. Presumably this academic sees economics strictly in right-wrong terms. Second, a senior academic expressed frustration that their really bright students struggled to write good quality final year dissertations. But for the first two years, seminar activities consisted principally of answering technical, primarily quantitative exercises. They were then asked, with little or no preparation, to write several thousand words on a topic of their choosing. That department prepares students really well for further academic study of Economics, but what else they are prepared for, who knows...
"Universities are training economists who can build models but don't understand the economy" - This aptly captures how I felt when I started a second bachelor's degree in Economics in a UK university. Lots of mathematics, statistics, and models, and yet, I had no real understanding of how the economy works.