VOX - The Student Journal of Politics, Economics and Philosophy
Predictioneering in Economics By Ilaf Scheikh Elard
Men in positions of power need to act. They act by necessity, for inaction counts as action. Put more concretely, lack of change in behaviour, where persons in businesses, banks or the government are concerned, may appear to be a deliberate reaction to a crisis and a resolve to doing nothing else to deal with it save for 32
‘more of the same’. But those who need to act or refrain from acting may need advice, consultation, debate, with subordinates or colleagues in order to inform their decisions, or inform others about their decisions. Hence, some of the discussions and the effort expended by economists in analysing what has been going wrong
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with the economy and how to get out of the impasse may very well be in order. At the same time, economists can easily become a nuisance for their ‘masters’ – in the same way as priests advising generals in war. They themselves may need informing of what is going on. There may well be a ‘positive danger’, to paraphrase Hayek, if these lofty ‘servants’ of the real decisionmakers stop being curious or creative and, most importantly, cease to be critical of their own views, thinking, in the thick of it all, that their advice is not something inevitably ‘subjective’. Why else did Lord Keynes observe that there are as many economists as there are facets of anything public? However, many economists, or priests for that matter, wish to see themselves as strict spokespersons for something objective, even divine, instead of as what they are: self-appointed delegates of the Golden Bough, the ‘rainbow’ and whatever lies (or ‘does not lie’) beyond. VOX Journal is presumably not in the business of advising ‘men in positions of power’, and this article is therefore in safe waters. The author can be free to indulge in a bit of analysis, in a purely subjective way, of some of those ‘objective’ discussions taking place all over the shop about the so-called ‘future of economics’ or the ‘economics of the future’ without being hesitant about making any policy recommendations or giving any advice
as to what in any case would be a premature account of the genesis of the crisis. The labour thereof will be left to the historians. 33
VOX - The Student Journal of Politics, Economics and Philosophy
Contemporaneous thought, that is thought busy with the ‘moment’, the here and now, has it on the authority of none but public sentiments that when one talks about economics one can only mean something yet to occur - some predictions about the economy outside the timeframe of the subject concerned. However, most of the prediction is no more than predication, where the horse is put before the cart now, and then after, often just beside the point laboured by either. One is reminded of that old, professional guru of thought-abuse, Francis Bacon, the forgotten father of modern sagacity. He writes that “prophecies, being infinite in number, have been impostures” and goes on to say, “and by idle and crafty brains, [they are] merely contrived and feigned only after the event past.” [(Bacon, F. (1972) Francis Bacon’s Essays (Dutton: London), p. 112]. Ironically, this Baconian view on prophecies forces one’s mind to focus on the present. The resultant ‘prophesising’ taking place today with a view of what is to become tomorrow may not be totally free of mixing tenses even when it is free of mixing metaphors. It is, therefore, pertaining to the future of the economic crisis, however defined, and specifically to possible ways of getting out of it, that the liquid in the pot must satisfy. It is a moot point that ‘what is’ relates little to what ‘ought to be’. This is however not so 34
in economics. The shouting is muffled and must be reserved to the day when a better code of intellectual conduct comes to pass in order to ensure that the social theology, parading as the ‘science’ of economics, is confined to certain pulpits instead of being on the loose. The main divide in answering the moot, as commonly portrayed, is broadly between two shouters: the Keynesians of latter day saints, and neo-Classicists of the recent Roundheads. The former, who have little in common with the original inspiration of J. M. Keynes, propose a return to what they call ‘government intervention’ and ‘government regulation’, even ‘fiscal easing’ in the hope of bridging the so-called output gap and thereby ‘kick start’ the dead engine of the Rolls Royce economy in the same manner as repeated generations of Prime Ministers and Ministers of the Crown attempt to kick start the life of the ducks in St. James’ Park: the Commonwealth, the Pluralist Society, the Way Forward. Across the vast water to the west it is the New Deal and supply-side Economics. In contrast to these dubbed Keynesians, economists of the neo-Classical tradition, licking their wounds from being attacked for having become lame ducks, save their seven decadelong arduous science by pointing out inefficiency risks that might hamper the machine under the weight of huge
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effects arising from the kick-starting process. To them, intervention may amount to nothing but meddling in ‘perfectly competitive’ carts that got stuck in the quagmire of the pond otherwise known as ‘finance capitalism’. Away from these self-serving doctrinaires, much of the public discussion in the press has shifted elsewhere. After Greenspan declared ‘never in the field of human folly was so much claimed, by so many, for so little’ (presumably referring to economics), the lesser tug of war between the two wings of Anglo-Saxon economics has shifted back to London. We witness the return, some would say the ‘return home’, of economic policy to the Keynesian view. But this back and forth, reminiscent of a dance where all act their part, over the practical answers to the question ‘What is to be done?’ can only be a reminder of the dire need for humility in anything touching the world of theoretical economics. ___________________________ Ilaf Scheikh Elard is an MPhil student reading Economics at Pembroke College, Oxford University
The IAPSS Conference is an international conference organised by the Club of PEP under the auspices of the IAPSS (International Association of Political Science Students - www.iapss. org). Theme: Local Democracy for Combating Poverty and Social Exclusion Dates: 27th of September - 2nd of October 2010 The Conference will include an introductory session with speakers from NGOs and the government, lectures by prominent academics (stay tuned to find out who they are), workshops and country case studies which will provide the basis for discussion of local democratic innovations, and a plenary session where conclusions reached in the seminars will be discussed. Participants are required to submit a paper dicussing local democratic innovations in their countries or analysing the topic on a moral theoretical/abstract level. Academics will assess the submissions and the best ones will be presented during the conference. Call for participants will take place next term.
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The Student Journal of Politics, Economics and Philosophy
Call for Papers
VOX Spring Issue 2010 Theme: Education VOX - The Student Journal of Politics, Economics and Philosophy - is calling for the submission of articles for the Spring Term Issue 2010, which will be on the wide theme of “Education” (see list below). The article should be between 1000-1500 words. If you want to write, please let us know by emailing a short outline of your proposed article to vox@clubofpep.org by 27 December 2009. You might want to pick an article idea from the following list or suggest your own topic: • A discussion on grade inflation • Education and the role of the state • Should university be free? • Education in the Solow Model • Can a fair society permit private schooling? • Punishment and education • Exporting education • Practical vs. technical knowledge • Education as a means or an end? • ___________ (your own article idea.) Note: Undergraduates, graduates and academics from any degree programme are welcome to contribute.