Economics as ‘moral science’

There was an fascinating recent edition of Renegade Inc on the Book by Dr Jonathan Aldred of Cambridge University entitled ‘Licence to be Bad’ – how economics corrupted us.

He starts by suggesting that people used to admire ‘doing your bit’, which is basically an indication of a contribution to a collective, co-operative task. Nowadays that seems a strange concept to many, who are more likely to believe that if you don’t do a task someone else will. Basically general endeavour is now seen as individual, and not collective.

Prior to the Second World War the Cambridge ‘economics’ degree was called the ‘Moral Sciences’ degree. Then, under the influence of the directed and planned economies of the Second World War it was logical for economics to become more about planning and outcomes and more scientific in approach. When in 1983 the two most eminent professors who had originally worked with Keynes, died (and by then of course the Thatcher government had been in power for 4 years) the remaining Cambridge economists decided they should ‘modernise’ by copying the US, where economics as a new science was well – entrenched.

The scientific approach led to the acceptance of people with PhDs in mathematics in economics departments and seemed in turn to confirm the idea that economics was actually a science. So a complicated equation would give a firm result but would know nothing of history, politics or philosophy. This was a 180 degree transformation from the previous Moral Sciences degree (I speculate that Oxford’s Politics, Philosophy and Economics was the equivalent of Cambridge’s Moral Sciences degree, though clearly today, the Economics part appears to be just as pseudo scientific…)

The same approach means there is a tendency to concentrate on narrow areas of economics without regard to the big picture. On narrow points they can give firm mathematical answers – but of course without being able to answer questions about the generality of the ‘big picture’. which will not be ‘their area of skill’. Politicians often like these narrow answers and often feel able to ignore the generalities.

To add to the problem, the elite universities still have no difficulty getting their students into high-earning jobs – so there is no pressure to change the economics syllabus, or indeed any necessity to impart how the economy really works. In fact almost the reverse – perhaps if they didn’t teach in the way they now do, graduates could plausibly be less successful at getting jobs.

This is a long, long way from the Moral Sciences!

The quotation referred to by Andrew Dickie in the post below

Furthermore we are corrupted by a double whammy of ‘Economics’ as a science and also the outlook of Neoliberalism. Economists ignore money and the moral sciences areas of the economy and neoliberals want money to reign supreme and have no interest in the economy.

Enduring both problems simultaneously renders democracy much less useful than it could, indeed should, be. People are as ignorant of the purpose and working of the economy as the peasants were of the church in the sixteenth century.

We should be aware by now that this ignorance, promoted by neoliberals and wrecklessly neglected by most academic economists, serves simply to preserve and enhance power in the hands of the already powerful.

Comments

  1. Andrew Dickie -

    Peter,

    I don’t know if you’re on Facebook, but if you are, go to look at the “Modern Money Scotland” group, which contains a magnificent quote from the great economist, Joan Robinson. I can’t copy the image, or the quote via my mobile.

    If you are able to do either, you might care,to publicise it here – 100% supportive of your post.

    https://m.facebook.com/groups/1466864300089196?ref=bookmarks#!/groups/1466864300089196?view=info&refid=18&ref=bookmarks

  2. Charles Adams -

    The central problem is the corruption of politics by wealth. Economists have no special powers, their status is bestowed on them by a system created by politicians. Why would politicians create a system where economics graduates are paid so much more than nurses? Only because of the cosy relationship between the UK political elite and the finance sector since 1979.

  3. Peter May -

    I agree at base but I do think that academic economists who are after all, supposed to be thinking for themselves, should be more open and strident about where money comes from – and I’m presuming they know how important it is to know – whereas too many economists seem to just ignore it altogether I feel.

    1. Charles Adams -

      Yes but sometimes academic freedom is stiffled by wealth. An academics is more likely to advance their career by saying or what the wealthy want to hear. There are plenty of academic economists that do brilliant work but if their work suggests a change to the status quo then the mainstream will try to ignore them.

      Sometimes only years later are the radicals accepted because the evidence becomes too overwhelming to argue against.

      1. B Gray -

        “The enemy of conventional wisdom is not ideas but the march of events” – John K. Galbraith.

  4. Andrew (Andy) Crow -

    What we call (orthodox) economics these days is really ‘econometrics’ I think. It gives us crassly stupid solutions because only by making crass assumptions about the behaviour of ‘rational consumers’ can mathematicians, regardless of how clever they are make up sums that can be solved.

    It was Keynes, wasn’t it, who observed that markets could only work if all participants had ‘perfect information’. I think he was saying Markets can’t work, because to work they require an impossible precondition.

    Econometrics was the pursuit of the impossible.

    The proper study of ‘Economics’ is the management of resources. In this respect money is not a resource it’s a mechanism. Basically an accounting mechanism.

    A friend of mine was fond of saying ” If an engineer runs a business it will never make any money. But if the business is run by an accountant……. it will never make anything.

    Substitute ‘country’ for ‘business’ and ‘economist’ for ‘accountant’ and the mess we are in is easily explicable.

    1. Peter May -

      Love your friend’s quote! And your conclusion…

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