John Médaille, in a recent Front Porch Republic article, is asking hard questions. Why is it “90% of all economists missed the coming of the current disaster”? He admits everyone makes the occasional mistake.
The problem, however, is that the same 90% of all economists also missed the last crises [sic], and the one before that as well, and before that, and so on. In fact, their record of being able to diagnose and treat economic problems is about zero. And their prescriptions always seem to be counterproductive: the recommendations to limit government always make it grow, their advice on limiting taxation always makes it more, their prescriptions on growing the economy only leads to the illusory growth of bubbles, etc. Put it this way: If your doctor had this same track record of diagnosing and treating disease, you’d be dead by now.
It’s become a commonplace to say that economics is obviously not a real science with the same sort of predictive power of, say, an astronomer, or even a Las Vegas bookie, or even Aunt Mabel’s lumbago when it comes to approaching storms. Criticizing is economics is easy. Answering the question of where it went so terribly wrong and why is a more difficult matter. On that point Médaille has some interesting theories.
The study of economic systems is as old as Aristotle, but this study was always considered to be a branch of ethics, and the proper functioning of any economic system was believed to be dependent upon proper ethical arrangements. Adam Smith, for example, was himself a professor of Moral Theology. Through most of the 19th century, the science was known as political economy. As the name implies, an economic system was always viewed as something embedded within—and dependent upon—particular political and social institutions, and could not be studied apart from them. Further, political systems cannot be viewed apart from ethics. …By the start of the 20th century, the term political economy disappeared from common usage and was replaced by the new “science” of economics, a “science” divorced from the moral world.
In other words, John Médaille is saying the same thing that the church has been saying since before Adam Smith. Pope John Paul II was roundly criticized for making observations such as these throughout his robust tenure as pope. And of course, the relatively new Roman Catholic catechism spends quite a few questions in several different contexts on these very things.
But who listens to JPII? Who reads the Catechism of the RC Church? Who listens to the pastors, priests, or bishops when they talk about economics? But this guy is a college instructor!!! Maybe we’ll pay attention to him.