July 8, 2015

Separation of politics and economics

Comment on Blissex on ‘Euro — the antithesis of democracy’

Blog-Reference

“To be sure, economics may perform a valuable social role without adding any significant understanding to knowledge of the economy — a “good myth,” economically speaking, can work not only in primitive tribal cultures but also in modern societies. ... Indeed, ... the religious function may have been the most important role throughout the history of modern economics since the Enlightenment.” (Nelson, 2006, pp. 300-301)

We had the separation of church and state, what is needed next is the separation of politics and economics.

The task of the economist is to figure out how the actual economy works, just like the physicist figures out how Nature works. What the economist has first of all to do is to take an objective observer standpoint — as far as possible. This is not compatible with taking a political side.

I am, of course, not against taking a political side. What I emphasize is that it is humanly impossible to do politics and science simultaneously. Because of this, an institutional separation is necessary.

I have no trouble to acknowledge that, for example, Hayek has the right to write political pamphlets, to defend capitalism, to support Thatcher, and to found a political club like Mont Pelerin. What I say is, the moment he or any other economist starts with politics, the same moment he leaves economics understood as a science for good. It is the mixture that is toxic. Independently of this, Hayek is simply unacceptable as economist. His economics is scientifically substandard.

You cite many cases of economists involved simultaneously in academe/business/politics that simply are not compatible with scientific ethics. Now, I cannot check them and, most importantly, I do not want to occupy myself with corrupt people in science, politics, business, and elsewhere. Something went wrong with these institutions, that much is clear at the moment. A lot of corruption fighters are needed, that much is also clear. Finally, a lot of institution-builders are needed, obviously. But the rest is hanging in the air at the moment.

This is why I urge heterodox economists not to become redundant quacking frogs in the morass of political economics but instead to focus on economics as science. To refute political economists according to well-defined scientific rules is the first step. As Feynman, a genuine scientist, put it: "So we really ought to look into theories that don't work, and science that isn't science." (1974, p. 11)*

Orthodoxy is scientifically substandard: there is much opportunity to develop something better.

Egmont Kakarot-Handtke


References
Feynman, R. P. (1974). Cargo Cult Science. Engineering and Science, 37(7): 10–13. URL
Nelson, R. H. (2006). Economics as Religion: From Samuelson to Chicago and Beyond. Pennsylvania, PA: Pennsylvania State University Press.

* See also: The Farce That Is Economics: Richard Feynman On The Social Sciences