Are Econ Geeks Marooned in Their Own House

If you tell people, especially fellow blacks in the neighbourhood, that you are studying economics at university or college, all they will think you deal with is money, and the conversation will end there just like that. They will not even allow you just that one second of glory for knowing all these geeky little details. Ironically, when the economy is having a hard time, everyone looks at economists.

There come times when we have to admit that we are clueless in a particular subject, and so we have to lend an ear to those with the expertise, obviously with them using as little jargon as possible in their explanations because then it all becomes pointless. But since economists themselves rarely, if ever, reach consensus, how can the typical person take them seriously? Well, perhaps the biggest misconception about economics is that there is always a solution to any socio-economic issue that emerges. The truth is that two economists can be right even when saying things that directly contradict each other, only that the viewpoint of one is more susceptible to disaster than that of the other. But, does that justify that we reject the good solution for today because its future prospects do not look so good? The problem is that some issues need an immediate remedy otherwise everything falls apart, and measuring the degree of susceptibility is impossible anyway, or at best it will take a very long time to see the reveberations of one's viewpoint. It does not make sense to hold back on a policy because of a time that might never even come, and even if it does come and we live to see it, the damage will likely be rectified by the radical changes that emerge by then. Professional photography, particularly the filming of a bird's eye view, is now done using drones instead of helicopters which required both a pilot and a cameraman back in the day. Drones are more efficient, and because of their much smaller size, they can explore deeper horizons. If, for example, back in the day you held back on a policy to improve helicopters, fearing that it would not be sustainable in the long run, would drones not have rectified the problem now? And not to forget about Thomas Malthus who in 1798 formulated the "Malthusian Population Trap" theory, stating that increasing population to fixed amounts of land would leave one with less land to work with, eventually leaving everyone with nothing. According to him, there would be no life now, but here we are, alive and well. Why? Because he did not see the impact that technological progress would have. Even worse still, economists over many generations chose to ignore a branch within the discipline that focuses on the emotional and psychological factors that affect decision-making because then it becomes harder to predict human behaviour. This is a big deal because empirical evidence shows that there often exists a discrepancy between the rational man modelled in classical economics and the real-life man. The ignorance did not pay the dividends!

So, where does all of this leave economists? Does it render the discipline of economics a false premise? What is economics in fact? A primary school explanation would be that the economy is the mother, and her children represent all the different needs and wants. Now though, she birthes another child into the mix; how does she cater for the new born without leaving the existing children feeling motherless? We all want to feel attended to, like we matter. She will have to make some alterations to her habits, and even those of us who have not yet experienced parenthood say that it is not easy. It could be argued that the weak point of this explanation is that unlike children, adults who pay the majority of the taxes that government collects can decide what is best for themselves. That is true, but having to cater for the new born without leaving the others feeling motherless, how is economics any different from that? The problem is that we all have different ideas of happiness, so what seems trivial to some may mean the world to others; often these ideas contradict each other. Can economists really be blamed for this?

The emotional and psychological aspect of decision-making has made a comeback, and this time around will not take no for an answer. Showing why there exists that discrepancy calls for some interesting policy implications. Does behavioural economics finally give the entire branch of economics the break that it so deserves? Can the typical person give it a second look now? If we put more emphasis on it in our analyses of the real world, then we sure have a winning recipe.

So, is economics a good discipline? It sure is challenging, and will probably never solve all of our problems on earth. But, that also means that it keeps the brain busy; when has an idle brain produced anything other than inviting dreariness? Only he who has exposed his brain into the technical details knows how invigorating of a discipline economics is. People's ignorance of the discipline is unfortunately something beyond the control of the economist.