In the Calgary Herald on Saturday, Peter McMartin wrote a story that challenges the relevance of economists given that so few anticipated the recent economic crisis, and perhaps even worse, seem to have no clue as to how this mess might be fixed. The usual critics of neo-classical economics are represented by JK Galbraith's son James, an economics professor himself. About the abysmal forecasting ability of economists of late, Galbraith states:
"It's an enormous blot on the reputation of the profession. There are thousands of economists. Most of them teach. And most of them teach a theoretical framework that has been shown to be fundamentally useless."
But it's not just Galbraith. Agreeing with Galbraith, Rick Harris of SFU adds:
"What is it we teach? What is taught is the textbook properties of what I would say is a normal functioning economy. And most of that stuff has nothing to do with what is going on now."
Paul Beaudry of UBC is not as down on economists as Galbraith and Harris over the recent events since Beaudry discounts the importance of forecasting as one of our profession's core purposes. Instead, Beaudry sees economists in playing a bigger role in analysing events after the fact and to use that knowledge to prevent crises from re-occuring:
“Really, the science is managing (the economy) after all this stuff has come out. Have we learned from the previous crises? And if we’ve learned from previous crises, what policies should we follow to prevent them from happening again?”
From this story, it appears that economists are either irrelevant for understanding and managing the economy, or just useless over the short run.
Read the full story, Peter McMartin, "Economists go soul searching", Calgary Herald, Nov. 22, 2008, page C2.
Most of the story is available at: