Economics for the future

Abstract

Many of us decided to study economics because we were interested in issues such aseconomic growth, unemployment, poverty, discrimination and social exclusion. Andfor much of the history of the discipline, economists grappled with explaining suchphenomena and, hopefully, helped to improve the development of economic policy.But now the discipline is increasingly dominated by other concerns, such asmathematical rigour and econometric modelling. The New York Times columnist,Michael Weinstein, recalled how his passion to learn economics, which was driven bya desire to understand the causes of poverty and the impact of technical change, wasimmediately quelled when on his first day as a graduate student at the MassachusettsInstitute of Technology the professor announced that ‘all of economics is a subset ofthe theory of separating hyperplans’ (Weinstein, 2000). The subject has become soobscure that even orthodox economists are bemoaning its intellectual poverty.AccordingtoMiltonFriedman,‘economicshasbecomeincreasinglyanarcanebranchof mathematics rather than dealing with real economic problems’ (Friedman, 1999,p.137). And Robert Solow has observed: ‘Today if you ask a mainstream economista question about almost any aspect of economic life, the response will be: suppose wemodel that situation and see what happens...modern mainstream economics consistsof little else but examples of this process’ (quoted in Lawson, 2005).So many economists are now increasingly engaged in research and teaching that isdisconnected from the issues that influence people’s lives, as Long (2005) observed:‘academiceconomistsremainhiddenintheirivorytowers.Theyareneitherhouseholdnames nor a significant presence in newspaper commentary pages. How strange fora country that produced the most famous economists of all time: Adam Smith, DavidRicardo and John Maynard Keynes’. But not all remain hidden in their ivory towers:there are a few who do influence the policy domain, but they come from the intel-lectually narrow sect of neoclassical economics. And there are those from the neo-classical sect who have managed to infiltrate popular culture by throwing away themaths, packaging their prose in airport-style books and entertaining their readerswithstories about why sumo wrestlers cheat and why drug pushers live with their mums(see Levitt and Dubner, 2005).As modern orthodox economics moves away from reality, there is both theopportunity and the need for heterodox economics to orientate economics towards