Baby, bathwater, and the whole kitchen sink
Thursday, August 20, 2009 at 12:33AM LEADERS: "What went wrong with economics: And how the discipline should change to avoid the mistakes of the past," The Economist, 18 July 2009.
The statement that caught my eye:
In its crudest form--the idea that economics as a whole is discredited--the current backlash has gone far too far. If ignorance allowed investors and politicians to exaggerate the virtues of economics, it now blinds them to its benefits. Economics is less a slavish creed than a prism through which to understand the world. It is a broad canon, stretching from theories to explain how prices are determined to how economies grow. Much of that body of knowledge has no link to the financial crisis and remains as useful as ever.
And if economics as a broad discipline deserves a robust defence, so does the free-market paradigm. Too many people, especially in Europe, equate mistakes made by economists with a failure of economic liberalism. Their logic seems to be that if economists got things wrong, then politicians will do better. That is a false--and dangerous--conclusion.
Brilliant, as the Brits say.
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