Last night on TV Ontario I participated in a roundtable discussion about economists’ culpability in the current financial mess, as well as about its potential for doing anything useful as we try to get out. On the one side, you had Ken Rogoff, arguing somewhat in favor of economics’ continuing credibility. On the other side you had Dan Ariely, arguing against orthodox economics, but in favor of its behavioral variant.
I took a more middling view, which was admittedly unusual for me. I like some of the history in orthodox economics, some of the “aren’t people nuts?” stuff in behavioral economics, and a dollop of the general skepticism brought by fellow discussant Diane Francis. But my general view is anti-expert, with it puzzling to me why we would throw out one group of economic svengali for another group, no matter how much funnier and more charming their stories are.
After all, if we concede that traditional economists are historians with a math fetish, then behavioral economists are mathematicians with a psychology fetish. Either way, I don’t feel any more comfortable handing them the keys to the financial kingdom.