Should economics be democratised?

In the continuing fallout from the Brexit vote comes a call to democratise economics. I tend to think about these issues by drawing an analogy between economics and medicine. The reason I like this analogy is that both are stochastic sciences: people are unpredictable in terms of their behaviour and biology, at least in terms of the current state of knowledge. There remains a great deal that is mysterious. Both can use theory to a considerable degree, but both also rely on statistical analysis and experiments/trials. I am happy to acknowledge that medicine is ‘better’ in some sense than economics (although I do not really know, or know how that could be ascertained), but I would argue that any difference is of degree rather than kind.

One other similarity that is worth mentioning because it always comes up: both are hopeless at forecasting. Your doctor will not tell you how long you have to live, and can often only give you a rough idea even if you have a fatal disease. Economists get involved in macroeconomic forecasting not because users think it is accurate, but because it is marginally better than guesswork. But while doctors cannot tell you how long you will live, they can tell you that smoking will be very likely to shorten your life. Equally an inability to do good macro forecasts does nothing to refute the claim that if we make trade with our neighbours more difficult we will do less of it and this will reduce people’s welfare and incomes.

The two subjects are also similar in that key decisions are often delegated to expert committees: in the UK the MPC and NICE, for example. But when it comes to other policy decisions, the two subjects differ. Occasionally government or policymakers clash with medical experts on medical matters, but that is rare. In contrast politicians quite routinely ignore economic expertise, or choose minority views over the consensus. The difference is not hard to explain of course: political interests and economic decisions are often intertwined. This can in turn influence the discipline itself. But if you accept my analogy, this is not good for society. Those who voted for Brexit were told it would produce positive results for them in the long term, and will almost certainly be disappointed.

Is the solution to this to democratise economics? I cannot think of anyone, or at least no economist, who would object to the public knowing more economics. Some might go further, and suggest that knowledge of economics among policy makers is dangerously deficient. I would also agree that sometimes economists can learn from interactions with policymakers or even the public. But when it comes to medicine people generally do not want to know about medical science. What they want to know is what medical opinion is on key issues, and they want policymakers to make decisions that embody that knowledge.

I think the same is true of economics. Most people do not want to know the theoretical basis for why fiscal consolidation when interest rates are at their lower bound is bad for the economy, let alone the arguments that a few make against that consensus opinion. (If you read this blog, you may be an exception to this generalisation.) Instead they want to know what the consensus opinion is and how strong that consensus is. If the economics conflicts with their intuition, they might want to check that economists are answering the same question as they are. This the broadcast media generally fails to do, and the tabloids only do if it suits their political line. There are reasons for this in the way the media works, which I have discussed many times, but it would be negligent for economists to imagine it was not their problem as well.

For example in medicine I suspect you could rely on medics to be able to tell you what the consensus opinion on issues was. Unfortunately that would be less true in economics. But that is partly economists own collective fault, because the number working on subject areas can be quite large and not as well connected as they might be. To take just one example, there seemed to be a widespread perception among macroeconomists that many of the top schools taught little Keynesian economics at graduate level. It turns out according to survey data I and Andre Moriera collected that most schools do teach quite a bit of Keynesian economics.

Which leads to my punchline. Economists need to act more as a collective. We need to regularly survey economists (all economists, not just selected groups) about what they think on key policy issues, recording at the same time whether this is their area of expertise. We need spokespeople to explain any consensus in the media. When policymakers, City economists or think tanks depart from this consensus, these spokespeople need to be aggressive as a discipline in pointing this out, and not leave this to individual academics. Much as the medical profession does when rogue claims become popular. We do not so much need to democratise economics, but to organise it.