Ok, time to deal with the elephant in the room: when is one theory better than the other? What is progress in economics?
Is it not repeating the mistakes of the 1930s? Is it a more refined equilibrium concept? Lower p-values and higher t-statistics? More predictive power? Or is progress in economics simply an intuitive hunch that the present theory is better than the previous one?
If economics were a game of a few high-minded professors, the matter would have little meaning for the rest of us. But economics does profoundly influence every corner of our lives. Thus, if there’s anything students should learn in their proverbial Economics 101, it is what defines progress in economics.
Quite frankly, we don’t know the answer. So we asked a few of the most eminent members of our discipline instead.
Comments
Apart from one or two comments in the interviews, the economists have little idea of what progress really is. This may explain why there has been little real progress in economics in the past several decades, as evident by a direct return to the master (Keynes) for inspiration in the crisis. Resurrection of the dead and buried or reincarnation are possible only in religions or economics. Religion has no need for the idea of progress. Neither does economics apparently.
Economics has progressed since Great Depression and more was done to prevent the crisis from deepening. Nevertheless, it seems to be deepening anyway. So something was still not totally right.
In the future, I would like to see economics which is less about numbers and more about people. Economics, where human happiness would really count, not just dollars, economic theories where humans and labour would not be treated the same way as commodities. This is one way I think economics should progress. It will give us both better and more truthful understanding of the world and morepredictive ability.
This montage is not a serious attempt to define progress. It's interesting but more sytle than substance.
So a note on progress: when you make grants to support proposals that seek to devleop more and more complex models to describe or predict reality, models that equate people/agents to molecules, for example, this is not progres. Believing you can make law-like generalizations in a social science like economics (or epidemiology for that matter) takes you down a blind alley. This group should step back and read Alasdair MacIntyre to see the fallacy of law-like assumptions in social science.
Has to recommend his own 1989 book with Routledge in the International Library of Philosophy, *Philosophy of Economics: On the Scope of Reason in Economic Inquiry"... One really has to figure out epistemological progress before pontificating about it in economics in particular.
As an old economist myself I am somewhat unimpressed with rehashes of old economic theories that may not be relevant to the present problems with the world economies. It may be that we need new theories to deal with a set of circumstances that are vastly different than existed in the past. We are seeing a set of very complex problems cropping up worldwide and across a wide array of countries with considerably different economies and none of the "classical" theories was ever intended to deal with such a vast set of problems. As economists we need to put on our thinking caps and try to find something new that fits the problems we have now and not get stuck in old ideologies that don't quite fit today. Any new ideas out there???
The video and comments I think first and foremost show that the question of what counts as progress in economic theory should be an issue central to the economic discipline, with plenaries during the annual ASSA conference devoted to it. The first question is not so much what is progress in economics exactly, but why economists have talked so little about it in recent years. (Yann's elaborate post following this one is a starting point).
Also, I don't think economists need philosophers or others to help them figure out what progress in economics is or should be. Economists are smart enought themselves.
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