The Econocracy (and the hubris of economics)

I suspect the writers have a book to plug but the thrust of their argument is pretty sound - and needs to be said:

Secondly, by implying that those who voted leave did so based on emotion and identity, it denies the possibility that Leave voters did so based on different economic logic or arguments. In short it represents the idea that if Leave voters had based their decision on economics they would have come to the same conclusion experts did which. This belief precludes the possibility of legitimate political debate about economic issues and reinforces econocracy.

From here, the academic discipline of economics and our economic institutions have two choices. Either they frame Leave voters as emotional and irrational and thus carry on with the status quo of econocracy: continuing to lock people out of economic discussion. Or they can take seriously the ways in which econocracy undermines democracy and fails to give people a voice to express their economic grievances.

This is set in the context of Brexit but isn't actually about that vote. Rather it's a recognition that economics - and especially macroeconomic modelling and forecasting - suffers from hubris. As I wrote a while back:

Every now and then – more by luck than through skill and knowledge – one or other set of economists gets something right. For a moment it appears that a particular combination of lever-pulling and knot-tying is the way to run the economy. The leaders of the team receive great prizes, backs are slapped and the Kings and Princes grant the machine-minders money. And all the other teams, for a short while, shuffle into line by using the specified combination of levers and knots.

All this is just a combination of hubris and sympathetic magic. We witness the combining of the false belief that the economy can be “managed” with the misplaced view that because when we pulled lever seven last Wednesday and the ‘right’ result ensued, this will happen every time we pull lever seven. The truth, of course, is that the pulling of lever seven and that ‘right’ result coincided because of mere happenstance.

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