Thomas Piketty is the economist of the moment; no one can dispute it. But there are others whose star should be high in the firmament and Ha-Joon Chang is, I think, one of them.
His 23 Things They Don't Tell You About Capitalism is an excellent book. His continuing critique of economics is first rate. This mornings contribution to the Guardian is typical:
[A]ll .. economic theories are at least debatable and often highly questionable. Contrary to what professional economists will typically tell you, economics is not a science. All economic theories have underlying political and ethical assumptions, which make it impossible to prove them right or wrong in the way we can with theories in physics or chemistry. This is why there are a dozen or so schools in economics, with their respective strengths and weaknesses, with three varieties for free-market economics alone — classical, neoclassical, and the Austrian.
Given this, it is entirely possible for people who are not professional economists to have sound judgments on economic issues, based on some knowledge of key economic theories and appreciation of the political and ethical assumptions underlying various theories. Very often, the judgments by ordinary citizens may be better than those by professional economists, being more rooted in reality and less narrowly focused.
Exactly right. That's precisely what is creating the cognitive dissonance Gillian Tett referred to in the FT the other day, but it's Ha-Joon Chang who has played a significant part in creating it.
His new book, Economics: The User's Guide, should be valuable.
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Gillian Tett was on Newsnight last night confronting Norman Lamont. It is good to see FT writers are not all supporters of the capitalism we have now.
But I thought that Stella Creasey was even better. Lamont was frankly ridiculous. I read all Tett’s FT stuff and feared that she has been tending to go a bit native (in NY) but as things are so obviously collapsing she is starting to recover.
A very good piece, but I think economics can be somewhat scientific even if it’s a different sort of science to that of physics and chemistry. If not economics degenerates into postmodern relativism. http://emergenteconomics.com/2014/05/01/chang-plugs-his-new-book/
No: it can never be scientific
That’s always delusion
We could start with some basic building blocks: land and labour. All wealth/production is created by human labour using inanimate capital and inanimate land; capital is created by labour using land. But most economists conflate land and capital.
Well said Richard -scientism applied to economics is a disaster, it is based on flawed notions of the human -as Keen points out in debunking economics.
The Wikipedia entry on capital clearly supports you , Carol:
” Capital is distinct from land (or natural resources) in that capital must itself be produced by human labor before it can be a factor of production”
There is a sea of confusion here- as financial capital and capital goods get mixed up by non-economists like me (and some economists c.f James Galbraith’s review of Picketty http://www.dissentmagazine.org/article/kapital-for-the-twenty-first-century!) All this stuff needs to be part of an educational program.
Picket try includes land on my reading
I think that Michael Hudson makes some very good points here about Picketty: https://www.youtube.com/watch?v=EfWsEhXULNw#t=268 – although I confess I have only read reviews of his book, not the actual thing. Waiting for the order to come through.
Can we run valid macroeconomic experiments? Is macroeconomics repeatable? No and no. So it’s not science. Open and shut.
Gosh: two rather categorical and hence somewhat ironic answers. Actually some macroeconomists do run experiments, and parts of natural science, such as in biology, aren’t repeatable. Physics isn’t a unified science — hence the incompatibilities between its Newtonian and quantum strands, not to mention string theory.
Positivism is flawed, but that shouldn’t be confused with science. Neither should numerical certainty, maths or Popperian falsification. Those things don’t define scientific method. Science is about finding things out and studying the world using appropriate methods. That’s perfectly possible when it comes to society, just as it is for animals, atoms and chemical compounds. You just need to use different techniques.
If we just say economics all art or subjective then we’re left with no ability to choose what answer is right or wrong: economic understanding can’t progress. Everything is just opinion. There would be no more reason to accept your view than mine.
I’m not a defender of mainstream economics — in fact quite the opposite — but I do think that some sort of provisional progress in economic thinking is possible, as, presumably, do you, Richard, if you think that tax havens are wrong and that inequality should be reduced.
Economics should probably be more like social sciences such as sociology, psychology, political science and anthropology. In fact lots of heterodox political economists do argue along these lines, such as Chang himself, Albert Hirschman, Tony Lawson, Sheila Dow, etc. There are major movements and journals aimed at making economics a much more modest science — such as the real-world economics review, the World Economic Review and parts of INET.
I am totally happy to think economics is within the framework of social science
But let’s not for a minute confuse that with science
Er, the clue’s in the name: it’s not called social art. It’s a different sort of science but it’s still a science. We can still establish findings about society, as well as develop methods for study and research. Science isn’t all about white coats and laboratories.
Facetiousness will not help your case
Re Natural Sciences and Social Sciences
In lighthearted discuion on QI Stephen Fry suggested that on Medicine courses students are told explicitly that many of the so-called “facts” which they are being taught will be proven to be incorrect within a few years.That is : uncertaintly exists in both natural and social sciences.
Sorry, I didn’t mean to be rude and I suspect our positions aren’t that far apart. I just think that the real object of criticism shouldn’t be the possibility of science per se in economics; critique should aim at the kind of findings that contemporary mainstream economics imagined it has established as Truths, as well as things like the imperialism of economics and its claims to omniscience.
The problem isn’t whether or not economics as a discipline in general is a science (lots of past economists, like Keynes, have established what are seen as ‘scientific’ findings); it’s how objective mainstream economics is and whether ideology like the Laffer curve should be considered objective truth or just right-wing propaganda. I think the latter.
But I also think that a more sane sort of political economy can do scientific-type things, even if its findings are taken as provisional and context-dependent. Mainstream economists laugh at the oh-so-funny joke that they are dismal scientists, but I think they’ve forgotten just what that dismalness means: ie. the difficulty of establishing eternal truths about society and the need to constantly revise techniques, models and findings.
David Ricardo said in the, I believe, 18th century that for free markets to properly operate, capital should not be moved from a high wage to a low wage economy, exports must be balanced and there should be full employment.
As we patently do not have any of those conditions, how is the “free market” supposed to work?
I believe that free markets are an illusion anyway and have probably never existed.
I think Chang’s most important point is that the public need to be more informed about economics so they can see that austerity and the use of unemployment as a price control is ideology mendaciously dressed up to be a ‘natural law’ -this will take a new educational revolution akin to the WEA in the 30’s. We need something to challenge the present anti-intellectual, dumbed-down zeitgeist that our financial overlords benefit from!
Although there is a lot of good stuff in the ’23 things’ book, Ha-Joon Chang mentions labour issues twice, in the introduction and in one chapter as I remember, but fails to deal with them, just leaving them hanging. A pity.