Nine reasons not to study economics

1 It’s not a science. Economists present themselves as champions of a discipline with the rigour of physics. The models you’ll learn about are presented algebraically and will borrow from real sciences, particularly hydraulics. But the material of economics isn’t physical. It’s the ideas and motivations of people who don’t behave predictably like atoms and molecules. If you want a scientific education, do proper science, not economics. If you like finding out about human behaviour, choose sociology or anthropology (though history is a solid alternative and literature can tell you a lot too).

The claim to be science was tested by the failure of economists to foresee the 2008 financial crash. In fact, practically all prominent economists were saying in the spring of 2007 that worries about a sub-prime crisis were misplaced and all would be well. It wasn’t.

2 It’s not empirical. Professional economists spend most of their time manipulating data captured by government departments, supranational bodies like the IMF, central banks and researchers. So it’ll come as a shock that the ideas supporting economic theory and consequently applied economics are not based on evidence drawn from actual human behaviour.  The theory that the self-serving individual coupled with the free interplay of supply and demand can automatically deliver a stable equilibrium that is socially and technically efficient — something that is never seen in life — is not the result of research. It was distilled by logical argument with limited reference to the real world, though most economics courses don’t tell you that.

3 There’s no such thing as ceteris paribus. You will be told that certain things will normally happen if one factor changes while everything else remains the same. So you will hear that when the price of bread goes up while all other things remain the same (ceteris paribus), then demand for bread will have a tendency to fall. But this is not a scientific observation; it’s the statement of the obvious. It’s a bit like saying that if a runner in a 100 metres sprint is allowed to run while her or his competitors aren’t, then that runner is likely to win (though it’s not certain). Economists call ceteris paribus a “simplifying assumption”. (And in economic theory, you will hear a lot about tendencies).

4 Economists disagree (a lot). You might think that an economics degree will open the door to a profession where there is a high degree of consensus (like medicine, dentistry, law, accountancy, engineering etc). You will be disappointed. There are probably at least a dozen schools of economic thought constructed on different assumptions. Economics is a discordant profession.

5 Economics doesn’t have a common language. People can communicate because almost every language has been authoritatively translated. Languages are not codes, so there is imprecision. But everyone on earth can with effort talk to someone else regardless of their native tongue. Dumi is spoken in the Khotang District of Nepal. There are only seven remaining speakers. But it has a dictionary and several books that show the grammar and syntax of Dumi. This doesn’t apply to economics. Ask an economist to define a basic concept like capital and you’ll find another one who will find it inadequate. This lack of a common language compounds the divisions and factionalism (see 5) that characterises economics. It also explains why people who haven’t studied economics find what’s said by those that have so mystifying.

6 Economists can be arrogant. Having invested years grappling with the discipline, professional economists have two main ways of dealing with those who haven’t.

One would be to say: “Economics is not a science, its language is ambiguous and incomprehensible and, to be honest, I’ve got doubts that what I’m saying is either factual or true. Have you thought about doing mathematics instead?” The problem is that would suggest there’s no good reason to listen to them (let alone read their books).

The default position is to assert economics is complex and requires decades of study and meditation. Non-economists talking about economics are dismissed. Others who have studied economics and challenge their statements will be subject to suggestions they’re either a bit dim or haven’t read the right books.

This attitude is compounded by economists’ acute sensitivity to the place they studied. In the UK, the top school of economics is generally said to be Cambridge University where John Maynard Keynes went. For a Cambridge economist, Oxford University’s PPE is deemed to be prestigious but far too generalist. The LSE, jealous of its standing as a specialist in social studies, will assert its superiority and international reputation. Manchester University has a strong economics department. No other UK university will get a mention. Harvard University is confident that it’s the top economics school on earth, but MIT will demure. Chicago, which produced Milton Friedman, chuckles at all of them. Academic rivalry is normal and even constructive. But you won’t find a physicist dismissing another’s work simply because of the university he or she attended.

7 Top economists are mainly men and most are white. The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was founded in 1968. It’s now been awarded 52 times, sometimes to multiple winners. Of these, only two have been women. The first winner who wasn’t from Europe or North America was Amartya Sen in 1998. Only two of the winners have been non-white.  Almost all heads of department of major universities are white men.

8 Economics is misanthropic. The discipline has long been seen as being pessimistic about human nature. One of the first influential economists was Thomas Malthus (1766-1834), who opposed the popular view in 18th-century Europe that society was improving and in principle was perfectible.  As an Anglican cleric, he saw this situation as divinely imposed to teach virtuous behaviour and consequently opposed government action to relieve poverty. In 1849, Thomas Carlyle wrote in a tract in favour of reintroducing slavery into the West Indies and justified his case using Malthusian logic. Economics, from his perspective, was a “dismal science” but valid nevertheless.

Economists have consistently asserted their discipline, however ethically lamentable it might sound, is just what humanity needs. Karl Marx, a liberal humanist and critic of the status quo, argued the economic system was intrinsically exploitative, created poverty and inequality and was doomed to collapse. The foundational thinker of conventional economics Alfred Marshall, a Cambridge professor who taught Keynes, distilled the theory that the self-serving individual was in fact doing good. Many economists champion policies to reduce human misery but more often than not that’s despite their intellectual training. Assertions that poverty is wrong and vast inequality unacceptable will be classified as “value judgments” that have no place in economic theory.

9 Economics doesn’t automatically lead to a useful job. For most considering a course of study, the key factor will be how much it increases their earning power. This is particularly true in countries like the US where university education is mainly privately-financed (an approach favoured by economists). Evidence suggests that graduates from top economics schools like the LSE have significantly higher life-time earnings. But is the connection causal or simply a correlation? Do LSE graduates earn more because of what they’ve learned or because people who go to the LSE are more interested in making money?

City of London and Wall Street economists are very well paid, but their priority is to attract business and help their employer make money not understand the world.

But these are exceptions. The reality is a first degree in economics directly qualifies you for almost nothing. If you want to be a professional economist in academia, government or business, you will almost certainly have to get a doctorate with a high quantitative content. If you want to go into business, then the abstract truths economics provides are practically useless.

It is however true that someone with high-level mathematical skills will probably find economics easier than a pure maths degree; this might explain why they now dominate the profession and also why graduate level economics text books have almost no account of the discipline’s foundational principles (and it’s illuminating that many of the first economic theorists – including Leon Walras, Marshall and Keynes —  were originally mathematicians). Economies are consequently often presented in university courses as algebra with problems that can be solved like a maths test. Intuition, subjectivity and even human experience are invariably minimised.

There are probably further reasons for avoiding economics but that will do for now.

There are so many other things you can study: proper sciences that will expand your knowledge of the universe and other disciplines will improve your ability to understand human experience as well as communicate that to others in a constructive way.

The reason why I can say this is because I am an economist who spent much of my working life writing about economics. And I’ve published a book about the subject (it’s uploaded on this site).

The best case for doing economics is, therefore, that it will help you understand what’s wrong with it.

If that appeals, then economics may be right for you too.

 

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