|Confessions of a Recovering Economist
Good evening. My name is Jim. And I am an economist.
It is seventeen days since I last uttered the phrase "supply and
demand." But the demon still lurks, untamed, within me.
I know it's wrong that my particular profession hogs so
much attention, and is granted so much undeserved credibility. I
know it's wrong to pretend you can forecast complex economic
outcomes with three-decimal accuracy. I know it's wrong to reduce
the whole of the human endeavour to the endless pursuit of
material prosperity. Yet still I yearn for economics. I hunger for
the prestige that comes with being the only social science to
regularly make The National. I savour the smug
power of belonging to that exclusive sect of financial mystics who
understand the magical circuits of money and commodities.
So let's face it. I'm an economist. I'll always be an
economist. The best I can do is recognize my affliction. Name the
hunger that haunts me. Reflect on how to control it, how to keep it
at bay. Learn to avoid the events and issues that fan the internal
Every other addiction has a Twelve Step program, laced
with tough love and blunt self-honesty. Why not a Twelve Step
program for economists? God knows, they've done enough
damage with their arrogant, drunken prescriptions. Here's how
each and every economist can face up to
their inner demons, and make their own small contribution to setting
Step 1: Admit you have a problem. Like they say at the AA
meetings, this is half the solution. Where economists are
concerned, however, it's easier said than done. Getting a
substance abuser to face the facts of their addition is nothing
compared to convincing an economist that they're hooked on
elegant but useless mathematical models, and authoritative but
destructive policy advice. Where economists are concerned, we're
talking denial with a capital 'D.'
Step 2: Accept that all your efforts to explain the world have failed.
The 'market' is the holiest symbol in all of economics. It's magically
automatic and efficient. And supply always equals demand. The
whole profession of mainstream, 'neoclassical' economics is
dedicated to the study of markets and how they can be perfected.
The problem, however, is that in real life these idealized 'markets'
don't explain much at all. Powerful non-market forces determine
most of what happens in the economy -things like tradition,
demographics, class, gender and race, geography,
and institutions. Indeed, what we call the 'market' is itself a
complex, historically constructed social institution - not some
autonomous, inanimate forum. Power and position are at least as
important to economics, as supply and demand.
Step 3: Turn to your friends in other disciplines for help.
Economists get pretty snobby about the usefulness of other
disciplines. After all, when's the last time you saw the chief
sociologist for the Royal Bank interviewed on TV? Five years ago
the Canadian Economics Association even decided to hold its
annual conferences completely separate from the giant
congress of other social science disciplines. This intellectual
separatism harms the pursuit of knowledge, and exaggerates the
predisposition of economists to a blinkered mode of thinking. A
recovering economist can confess - even in public - that they might
have something to learn from other disciplines. Turn to your friends,
those who haven't been hypnotized by supply and demand graphs,
for help in understanding the world and how it works.
Step 4: Make a list of the situations where you are most likely to
act like an economist, and avoid those situations. Recovering
alcoholics know they must avoid bars. Recovering economists
must similarly avoid any meeting or social gathering where they
may be asked to give authoritative views on where the economy is
going, explain elegant but counter-intuitive doctrines (like why free
trade is always good for everyone, everywhere),
or provide personal financial advice. Even if you mean well, the
damage to both yourself and to your audience could be
Step 5: Acknowledge that an expanding GDP will only feed your
habit. The growth rate of Gross Domestic Product is the stuff of
newspaper headlines and international comparisons. Yes, it's true
that having more material wealth opens the possibility of using that
wealth to improve living standards in a meaningful and sustainable
way. But one doesn't automatically imply the other. GDP leads to
human progress only if we make sure it does. If we are concerned
with how people live, and how they interact with their environment,
we must evaluate and target those things
directly, rather than blithely hoping that a rising tide of GDP will lift
all our boats.
Inspired by folks like Marilyn Waring, there's now a
determined constituency of activists promoting alternative, more
genuine measurements of our economic progress. They believe
these measures will guide us to collectively adopt more balanced
and genuine economic and environmental policies. They are
wrong. It is power, not statistics, that determines how our
economy operates - the things we produce, the way we produce
them, and how the proceeds are divided. But taking on the
mainstream infatuation with gross output indicators, and exposing
the failure of growth to solve the real problems of the world and its
peoples, is a useful way for recovering economists to start to chip
away at that power.
Step 6: Stop putting price tags on everything you see. Economists
believe the 'value' of something is its monetary price. How, then,
do we understand the truly powerful passions and desires and
emotions that dominate our lives? Think of how most of us felt
during the SARS scare. Ask Canadians at that point which was
more important - tax cuts or public health - and the choice would
have been overwhelming. Ask someone who's just lost a loved one
to place a dollar value on their feelings, and
you'll probably get socked in the face. For the things that really
determine our ability to lead a good life - family, health, community,
peace - there are no price tags. Yet the business pages and the
classifieds and the Sears catalogues are full of them.
Step 7: Avoid the temptation to run regressions - even "just one."
Economics is at its addictive, hyper-positivist worst when it
substitutes inscrutable statistical correlations for genuine creative
thought. It's even spawned its own sub-category of statistics:
'econometrics.' Certain tenured economists spend all their
research time performing computer
regressions on randomly paired data sets, searching blindly for
strong correlations which they then explain with a theory custom-fit
to the data. Quantitative analysis, carefully applied, can play a
useful role, both in understanding the world and in seeking to
change it. But for a recovering economist, regressions are as
dangerous as that infamous glass of wine with dinner for an
Step 8: Get off your pedestal. Economists place themselves at the
top of an assumed hierarchy of knowledge. So it should be no
surprise that they enforce a rigid hierarchy within their own ranks.
And at the peak of that hierarchy, of course, stands one economist
above all others: the legendary 'Chief.' Reporters are always trying
to call me the 'Chief Economist' of the CAW. "Wrong," I tell them.
"I am just the economist. There is no 'chief' economist." But often
as not, the adjective still slips into their stories. It's as if they
would undermine the authority of their own reportage by admitting
in print that they only talked to a run-of-the-mill
economist - not to the chief. Chances are, most 'Chief
Economists' workjust the same way I do: solo, with no little "junior"
economists beavering away under their tutelage. But the adjective
is invoked nonetheless, to promote an aura of gratuitous
importance. Recovering economists know
their inherent worth comes from inside - so they can lose the phony
Step 9: Learn from those who went before you. Mainstream
economics is arrogantly ahistorical. In most cases, capitalism is
presented as a natural, eternal state of human affairs. Even the
term 'capitalism' is rarely used: naming the system, after all, might
imply that there are others. The preferred euphemism is 'market
economy,' which implies that the economy is like some big flea
market where anybody can set up a card table on Saturday
mornings and sell their wares. It's just coincidence
that General Electric has $575 billion (U.S.) worth of capital assets
sitting on its card table, while you and I have only our brains and our
brawn to offer.
Modern economics was not actually invented until the
early days of capitalism. So the very discipline is historically
relative - not to mention the economies it purports to study. And
the roots of neoclassical economics were always inherently
ideological: to justify, in the guise of
explaining, the perverse distribution of power and wealth that
emerged under this new social order. Studying economic history,
and the history of economics, is the best way to critique this knee-
jerk determinism, and to place the whole profession in a healthier,
more contingent context. In economics, history itself is subversive.
Step 10: Make a list of the countries and people you have harmed.
Billions of human beings, entire continents, even the planet itself -
all have been devastated by the glaringly misguided dictates of
economists. Even some of the most orthodox practitioners at the
World Bank and the International Monetary Fund will now quietly
admit that their domineering advice to developing countries in
recent decades - liberalize trade, liberalize finance, downsize
government, and wait for the invisible hand of the market to work its
magic - was completely and devastatingly wrong.
Of course, these institutions still actively perpetuate the poverty and
hardship which their own false recipe books did so much to create.
But large cracks are appearing in the intellectual dominance and
self-confidence of orthodox economics. Cataloguing the damage is
an effective and damning first step in tearing down the edifice.
Step 11: Make amends to those countries and people. Every
Twelve Step program requires the recovering addict to humbly
commit to fix up their own mess. Economists are no different.
This is the time for recovering economists to step to the front of the
room and make personal pledges to undo the damage that has
been wrought in the name of supply and demand.
Commit to studying what's wrong with markets, as opposed to how
beautifully perfect they are. Work to empower rank-and-file folk,
instead of dominating them with your apparent but phony expertise.
Start to imagine economic ideas that could change the world,
rather than invoking economic mumbo-jumbo to justify inequality
and explain why it's inevitable.
Step 12: Help other economists who come your way. Perhaps the
scariest thing about the economics profession is that it seems to
be becoming more homogeneous with time, not less. Economics
departments at Canadian universities, by and large, will only hire
entry-level faculty who demonstrate requisite acceptance of the free-
market assumptions supporting their elaborate but fragile
intellectual scaffolding. At least twenty years ago there was a
token radical or two in each department, around whom
critical-minded students could congregate. Today even that is rare.
Most progressive-thinking students flee in panic from economics
after their first mind-numbing encounter.
Recovering economists of any age need help to rediscover
their latent humanity and rededicate their energies to the pursuit of
things that really matter. But none need our assistance and
solidarity more than economics students. Most are motivated by a
gut-level conviction that learning economics should allow us to do
great things for people and the planet. (Needless to say, they
didn't go into the field because of the snappy dress or witty humour
of their professors!) Yet they are left to
flounder in a curriculum that tests mathematical aptitude more than
ability to think, and in which the urgent crises of the real world are
made invisible. If you encounter someone like this, put your hand
on their shoulder. Tell them you know how it feels. Help them find
alternative sources of economic inspiration, and places where they
can befriend other recovering economists-in-training. Show them
they're not alone.
* * * * *
Don't get me wrong. Personally, I'm very happy to be an
economist. I still believe that there is a material basis to most of
the problems humanity faces. I think economics is the best way
for me to make a contribution to human progress and social
change, and I've enjoyed great personal opportunities because of
my career choice. But lurking in my brain is a nagging awareness
that my own success was built at least partly on the pseudo-
rationalist coattails of the whole arrogant discipline - even as I
espouse a twisted, and hopefully insidious, version of that
So collectively, my profession must come to grips with its
elitist addiction. I do it every morning when I wake up, look myself
in the mirror, and say out loud: "I am an economist."
A version of this article appears in the current edition of This
Magazine. On-line help for recovering economists is provided by
the Progressive Economics Forum (www.web.ca/~pef).