Economics and Policy

Economists, or many of us, LOVE to tell decision-makers what they ought to do.  Though, far too many of those in the profession also want to cling to the illusion that they are also being 'objective.'  Oh, yes, don't you know that economics is a 'positive' science?  Positive as in 'objective' and 'value neutral.'

One might reasonably ask how a profession that deals to such a degree with money, and writes so extensively about what does and does not constitute value, can possibly think of itself as being value neutral.  Thankfully, there are esteemed practitioners of the craft who know otherwise.  Of course, they are seen as being a minority of crack pots.  Or worse, they are labeled as journalists or sociologists.  But whose complaining?

Sadly for those who continue to swallow the cool aid, such eminent economists as Joan Robinson are among the ranks of economists who understood how economics can better serve society.  Stiglitz has written cogently about development after his stint as the chief economist of the World Bank and it's senior vice president.  Baumol wrote years ago that economics is more like biology than physics even though physics type models were more the type employed in the profession.

What has worked for me is to borrow the structure-conduct-performance framework from Industrial Organization and apply it to policy.  I'll describe how I use this approach in a subsequent post.