Thursday, November 02, 2006

The purpose of studying economics

The purpose of studying economics is to learn how to avoid being deceived by other economists.
-- Joan Robinson

I found this gem in this essay, written by an admirably moderate economist. The whole essay is devoted to a strong argument against "economic fundamentalism".


  1. Anonymous said...

    Unlike natural sciences, social sciences have both a positive aspect (understanding what is going on) and a normative aspect (prescribing what should be done).

    Policy making is always going to be controversial because even reasonable persons can disagree about what objectives are the "right" ones. Even more problematically, almost all economic policies have "winners" and "losers." Expect the losers to protest loudly, as the recent strike by bank employees shows.

    Of course, Economics has its bunch of charlatans but then so do most other subjects. Your posting though indicates that you think that Economics has more than its fair share. In feeling this way, you are in very good company. The subject seems to support a veritable cottage industry of people devoted to debunking it. (Check Vinay Lal's article in Outlook, for example.)

    Most economists have learned to ignore such books/articles but once in a while someone is provoked to respond. I have no illusions that such responses are going to change anyone's opinions but you might just want to check out

  2. Anant said...


    Great excerpt. I will read the article in peace
    when I have more time. In the meanwhile,
    I think jem->gem.


  3. Abi said...

    Anon: I linked to this article only because I was impressed by its rather balanced critique of economic fundamentalism. Arguments for privatization (to give an example) that claim that it's 'sound' economics have never impressed me; so, it's not surprising that this article resonated with me.

    Anant: Do read the article; it's worth it. And, thanks for the correction.

  4. Anonymous said...

    Abi: For that matter, arguments that "navratnas" should not be privatized - spouted by the likes of Krishna Iyer and Kuldip Nayyar - have never impressed me either. What is so important about "navratnas" that they should be treated in this way? Krishna Iyer is specially a treat - I found him saying that the navratnas are like "family jewels" and should not be sold. Leave alone the analogy, why "family jewels" should never be sold is beyond me.

    I don't hold a "privatise everything" view regarding our public sector. However, certainly, I would like to see some parts of it privatised. Most economists whose views I am aware of - the likes of Pranab Bardhan, Kaushik Basu etc. - again hold views which are far more complex than the caricature you paint.

    To be fair, there are some, especially in cyberspace who generate a lot of noise by spouting such views with little to back them up...but it is somewhat ridiculous to judge an entire subject by the rantings of a few.

    I suspect none of this will impress you. I get the feeling from a sampling of your writings that you are not terribly impressed by the subject and its practitioners. Fair enough. Let us leave it at that.

  5. Anant said...

    Hi Abi,

    Yes, I just read the article.
    Very good.

    Best wishes from a two-handed
    bleeding heart liberal.