Must-Read: Eurointelligence: Economics Profession Doubling Down

Must-Read: An acerbic take on the economics profession and Brexit, but based, I think, on a false premise. I believe that when the economists’ negative assessments of Brexit “will eventually be tested against reality”, it will turn out that the negative forecasts were not “meant as a scare story only” and will come true. That–if anyone remembers–will not “reduce the profession’s reputation among non-economists further”:

Eurointelligence: Economics Profession Doubling Down:

What [should] the response… be to the rise in economic populism[?]…

Tony Yates… encapsulates the problem almost perfectly, in an unintended way: it is hard to find a better example of the profession’s arrogance. Yates’ discourse presumes the presence of a right and rational choice–and that those who disagree with the position are illiterate. In particular, Yates talks about “perceived grievances”, and notes that Brexit was “voted for by the older, less educated, less skilled”…. He confuses politics and policies… assumes that people care about aggregates and averages, rather than about their own position. When your real income falls, as it has done for almost 40% of the UK population in the last ten years, then this is not a perceived grievance but a real one…. These people… are not necessarily irrational…. Yates castigates policies to address these grievances as a “sop response”. That may be so to the extent that some of these policies may be symbolic and superficial. But for sure we need to address the problems. 

We have before discussed the surprise expressed by some economists that no one is listening to them any more. There is a reason for this. The profession, which is very inward-looking, has failed to address its shortcomings after the financial crisis. And if this article is any way representative of the post-Brexit response of the economics establishment, it is doubling down. The profession is shocked by the Brexit vote partly because the forecasts about the long-term impact of Brexit will eventually be tested against reality. It was meant as a scare story only. And it will reduce the profession’s reputation among non-economists further.