The Failures of Macro-Economics
I wrote some 7 years ago about the Failures of Macro Economics (q.v.), concluding that both academic and journalist writers were insufficiently rigorous with themselves and each other; their words could be ignored; opinions in this quasi-science held more sway than data and rigorous logic."When you listen to economists who have worked in or near government about their role in the mechanisms of policy-making, they are appropriately humble. They harbor (sic) few illusions that a quick lecture ....... will convert politicians to their point of view. They are aware that political figures will grab an economic argument if it tends to support their pre-existing views, and ignore the argument otherwise."
I immediately wonder if the power of the academic analysis is being correctly or incorrectly assessed by the politician. And if, in some cases, the politicians are ignoring sound advice, how can they be punished? It is often months, sometimes years, after policy steps are taken that their effects are known.
Taylor quoted George Stigler, who wryly wrote (1976) that:
"economists exert a minor and scarcely detectable influence on the societies in which they live."
Taylor also quoted a perceptive and far reaching remark of Milton Friedman (1980):
“The only person who can truly persuade you is yourself. You must turn the issues over in your mind at leisure, consider the many arguments, let them simmer, and after a long time turn your preferences into convictions.”
This, of course, is the academic; for the politician does not have the time, nor the right type of mind, to reflect in this way. He reacts to events with a knee-jerk response; afferents and efferents, but no frontal-lobe involvement. It may be necessary to lay before the politician the entire argument, right down to the calculated results on the GDP and the voters' response.
All, or a significant majority, of academic opinion must agree. Not that the majority is in all cases correct –– a point that my colleague Peter Mitchell enjoyed pointing out, after he was awarded the Nobel Prize for Chemistry in 1978.It may also be crucial that this entire argument be laid before the voters, for it to have significant effect on the political mind. The academic economist must 'raise his game'.
