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The Other Side of the Economics CoinThe Other Side of the Economics Coin

The Other Side of the Economics Coin

In an astonishing break from the economics party line, Harvard economics professor Greg Mankiw pulled back the curtain on the inner workings of his profession and told all. "Our recommendations," he shares, "are based not only on our understanding of how the world works, but also on our judgments about what makes a good society." The fact that Mankiw frames these confessions as "a dirty little secret" says something about the (in)ability of most economists to think of themselves as philosophers.  After all, the first rule of the philosopher is to confess that you know nothing.

Brian Dijkema
2 minute read

Breaking news, folks: economics is about justice.

In an astonishing break from the economics party line, Harvard economics professor Greg Mankiw pulled back the curtain on the inner workings of his profession and told all. "Our recommendations," he shares, "are based not only on our understanding of how the world works, but also on our judgments about what makes a good society."

And, just when you thought it couldn't get any crazier, Mankiw drops this bomb: "We economists have only a basic understanding of how most policies work. The economy is complex, and economic science is still a primitive body of knowledge."

The fact that Mankiw frames these confessions as "a dirty little secret" says something about the (in)ability of most economists to think of themselves as philosophers.  After all, the first rule of the philosopher is to confess that you know nothing.

But it also provides us with a helpful insight into how we should proceed in discussions about economic policy. Here it's important to note both sides of what he says. Economic policy recommendations arise from a) an understanding of how the world works and b) judgments about what makes a good society.

It simply will not do to suggest that economics is an open ideological game just because judgment is involved. Judgment after all, implies a certain sense—or knowledge—of the field. While economists do have "only a basic understanding" that understanding is still worth something. We may not know everything, but we do know some things. And we know some of those things well enough to gain some general consensus on them.

But the other side of the coin—that there are judgments involved in economic policy—is somewhat less appreciated in policy discussions. All too often economic discussions proceed in such a way as to suggest that a set of data necessitate a particular policy conclusion. But, as anyone who's done research is aware, the data are drawn to answer certain questions, and they might not always be the right ones. Anyone who's been to court—the place where judgment is most clearly on display—knows that the nature of the questions asked are drawn from certain preconceptions held by the jurists, and are intended to accomplish certain goals: a guilty or innocent verdict.

In other words, it's possible for economists to meet the "knowledge bar" of economic discussions and yet come down on opposite sides of a given tendentious policy. Bringing the stats is not enough to convince, though not having the stats is enough to get your argument dismissed.

Likewise, trying to convince someone about the worth of your particular policy without recognizing and defending the moral—and it is necessarily moral—judgments behind it should raise alarm bells. But, for some reason we don't hear those bells nearly enough. Why? Possibly because, in a society dominated by a supposed public consensus on liberalism—that is, that the state remain neutral on all moral questions except a few—discussion of deep moral questions are preemptively disqualified.

Mankiw's confession might just be the crack in the door to let those questions back in the room.

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