Economics can’t be entrusted to the experts

Why has so much of the world succumbed to populist demagoguery and xenophobic nationalism? To a non-trivial extent, economists may be responsible.
This idea finds some support in a new book, The Econocracy, written by three U.K. economics students — Joe Earle, Cahal Moran and Zach Ward-Perkins. They argue that popular dissatisfaction with government has a lot to do with its over-reliance on concepts and ways of thinking supplied by economists, who have been much more influential than their expertise justifies.
In the authors’ usage, an econocracy is a society where — though it looks like a democracy — goals get expressed in economic terms and policy making has become a purely technical activity. Objectives such as faster growth, increased competitiveness and access to more and cheaper consumer goods are taken as inherently desirable, with little consideration of differing values or visions of the future. Specialists handle the execution, because involving the people can only mess things up.
The econocracy inevitably breeds a sense of disenfranchisement. This is evident in the European Union, where unelected bureaucrats pursued a level of integration far beyond what the electorates of some members states approved. Distrust grows when the experts’ prescriptions prove woefully misguided, as happened with the euro and financial deregulation — or when policies create winners and losers, as with international trade agreements. Even economists now admit that their profession has often pushed a distorted and one-sided view about the benefits of trade.
Populism is one response, and a dangerous one, as it stirs currents of nationalism, racism and xenophobia. The book offers a more desirable solution: Lay the groundwork for the better use of economics within democracy. This would entail a much less arrogant approach — one less dominated by market fundamentalism and more willing to step outside the confines of its rigid framework, in which theory all too often takes precedence over empirical reality.
As members of a global movement called Rethinking Economics, the authors are trying to demonstrate what a more inclusive discipline would look like in practice. To make the concepts more accessible to ordinary people, the group runs high-school workshops and community crash courses. The idea is that while economics does involve highly technical issues, and while we need experts with advanced training, political decisions have to involve much greater participation from the rest of society.
Many economists will dismiss the book. The ignorant masses, they’ll say, should take our advice and stop voting against their own interests, which we can identify better than they can. But this is precisely the problem: Life and politics aren’t exercises in finding the optimal technical policy to maximize abstract measures of expected utility. People reject that — and one response is to kick over the whole show, consequences be damned.
The book actually displays impressive restraint, focusing on making practical suggestions — for a wider diversity of ideas in economic training and education, for example — rather than on laying blame. It’s an inspiring source of ideas about how we might start trying to overcome fear and hatred, and instead cooperate to build a more prosperous future.

—Bloomberg

Mark Buchanan is an American physicist and author. He was formerly an editor with the international journal of science Nature, and the popular science magazine New Scientist