of a Recovering Economist*
Jim Stanford (Economist,
Canadian Auto Workers)
© Copyright 2003 Jim
I am an economist. It is seventeen
days since I last uttered the phrase "supply and demand."
But the demon still lurks untamed, within me. Economics is an
addiction. Every other addiction has a Twelve Step program, laced with
tough love and blunt self-honesty. Why not a Twelve Step program for
economists? God knows, we have done enough damage with our arrogant,
drunken prescriptions. Here's how each and every economist can face up
to their inner demons, and make their own small contribution to setting
Economics is an addiction. Every other
addiction has a Twelve Step program, laced with tough love and blunt
self-honesty. Why not a Twelve Step program for economists? God knows, we
have done enough damage with our arrogant, drunken prescriptions. Here's how
each and every economist can face up to their inner demons, and make their
own small contribution to setting things right.
1: Admit you have a problem. Like they say at the AA
meetings, this is half the solution. Where economists are concerned, however,
it's easier said than done. Getting a substance abuser to face the facts of
their addition is nothing compared to convincing an economist that they're
hooked on elegant but useless mathematical models, and authoritative but
destructive policy advice. Where economists are concerned, we're talking
denial with a capital 'D.'
2: Accept that all our efforts to explain the world have failed.
The 'market' is the holiest symbol in all of economics. It's magically
automatic and efficient. And supply always equals demand. The whole
profession of mainstream, 'neoclassical' economics is dedicated to the study
of markets and how they can be perfected. The problem, however, is that in
real life these idealized 'markets' don't explain much at all. Powerful
non-market forces determine most of what happens in the economy - things like
tradition, demographics, class, gender and race, geography, and institutions.
Indeed, what we call the 'market' is itself a complex, historically
constructed social institution - not some autonomous, inanimate forum. Power
and position are at least as important to economics, as supply and demand.
3: Turn to our friends in other disciplines for help.
Economists get pretty snobby about the usefulness of other disciplines. After
all, when's the last time you saw the chief sociologist for the Royal Bank
interviewed on TV? Five years ago the Canadian Economics Association even
decided to hold its annual conferences completely separate from the giant
congress of other social science disciplines. This intellectual separatism
harms the pursuit of knowledge, and exaggerates the predisposition of
economists to a blinkered mode of thinking. A recovering economist can
confess - even in public - that they might have something to learn from other
disciplines. Turn to your friends, those who haven't been hypnotized by
supply and demand graphs, for help in understanding the world and how it
4: Make a list of the situations where you are most likely to act like an
economist, and avoid those situations. Recovering alcoholics
know they must avoid bars. Recovering economists must similarly avoid any
meeting or social gathering where they may be asked to give authoritative
views on where the economy is going, explain elegant but counter-intuitive
doctrines (like why free trade is always good for everyone, everywhere), or
provide personal financial advice. Even if you mean well, the damage to both
yourself and to your audience could be incalculable.
5: Acknowledge that an expanding GDP will only feed your habit.
The growth rate of Gross Domestic Product is the stuff of newspaper headlines
and international comparisons. Yes, it's true that having more material
wealth opens the possibility of using that wealth to improve living standards
in a meaningful and sustainable way. But one doesn't automatically imply the
other. GDP leads to human progress only if we make sure it does. If we are
concerned with how people live, and how they interact with their environment,
we must evaluate and target those things directly, rather than blithely
hoping that a rising tide of GDP will lift all our boats.
Inspired by folks like Marilyn Waring, there's now
a determined constituency of activists promoting alternative, more genuine
measurements of our economic progress. They believe these measures will guide
us to collectively adopt more balanced and genuine economic and environmental
policies. They are wrong. It is power, not statistics, that determines how
our economy operates - the things we produce, the way we produce them, and
how the proceeds are divided. But taking on the mainstream infatuation with
gross output indicators, and exposing the failure of growth to solve the real
problems of the world and its peoples, is a useful way for recovering
economists to start to chip away at that power.
6: Stop putting price tags on everything you see. Economists
believe the 'value' of something is its monetary price. How, then, do we
understand the truly powerful passions and desires and emotions that dominate
our lives? Think of how most of us felt during the SARS
scare. Ask Canadians at that point which was more important - tax cuts or
public health - and the choice would have been overwhelming. Ask someone
who's just lost a loved one to place a dollar value on their feelings, and
you'll probably get socked in the face. For the things that really determine
our ability to lead a good life - family, health, community, peace - there
are no price tags. Yet the business pages and the classifieds and the Sears
catalogues are full of them.
7: Avoid the temptation to run regressions - even "just one."
Economics is at its addictive, hyper-positivist worst when it substitutes
inscrutable statistical correlations for genuine creative thought. It's even
spawned its own sub-category of statistics: 'econometrics.' Certain tenured
economists spend all their research time performing computer regressions on
randomly paired data sets, searching blindly for strong correlations which
they then explain with a theory custom-fit to the data. Quantitative
analysis, carefully applied, can play a useful role, both in understanding
the world and in seeking to change it. But for a recovering economist,
regressions are as dangerous as that infamous glass of wine with dinner for
8: Get off your pedestal. Economists place themselves at the
top of an assumed hierarchy of knowledge. So it should be no surprise that
they enforce a rigid hierarchy within their own ranks. And at the peak of
that hierarchy, of course, stands one economist above all others: the
legendary 'Chief.' Reporters are always trying to call me the 'Chief
Economist' of the CAW. "Wrong," I tell them. "I am just the
economist. There is no 'chief' economist." But often as not, the
adjective still slips into their stories. It's as if they would undermine the
authority of their own reportage by admitting in print that they only talked
to a run-of-the-mill economist - not to the chief. Chances are, most 'Chief
Economists' work just the same way I do: solo, with no little "junior"
economists beavering away under their tutelage. But
the adjective is invoked nonetheless, to promote an aura of gratuitous
importance. Recovering economists know their inherent worth comes from inside
- so they can lose the phony titles.
9: Learn from those who went before you. Mainstream economics
is arrogantly ahistorical. In most cases,
capitalism is presented as a natural, eternal state of human affairs. Even
the term 'capitalism' is rarely used: naming the system, after all, might
imply that there are others. The preferred euphemism is 'market economy,'
which implies that the economy is like some big flea market where anybody can
set up a card table on Saturday mornings and sell their wares. It's just
coincidence that General Electric has $575 billion (U.S.) worth of capital
assets sitting on its card table, while you and I have only our brains and
our brawn to offer.
Modern economics was not actually invented until the early days of
capitalism. So the very discipline is historically relative - not to mention
the economies it purports to study. And the roots of neoclassical economics
were always inherently ideological: to justify, in the guise of explaining,
the perverse distribution of power and wealth that emerged under this new
social order. Studying economic history, and the history of economics, is the
best way to critique this knee-jerk determinism, and to place the whole
profession in a healthier, more contingent context. In economics, history
itself is subversive.
10: Make a list of the countries and people you have harmed.
Billions of human beings, entire continents, even the planet itself - all
have been devastated by the glaringly misguided dictates of economists. Even
some of the most orthodox practitioners at the World Bank and the
International Monetary Fund will now quietly admit that their domineering
advice to developing countries in recent decades - liberalize trade,
liberalize finance, downsize government, and wait for the invisible hand of
the market to work its magic - was completely and devastatingly wrong. Of
course, these institutions still actively perpetuate the poverty and hardship
which their own false recipe books did so much to create. But large cracks
are appearing in the intellectual dominance and self-confidence of orthodox
economics. Cataloguing the damage is an effective and damning first step in
tearing down the edifice.
11: Make amends to those countries and people. Every Twelve
Step program requires the recovering addict to humbly commit to fix up their
own mess. Economists are no different. This is the time for recovering
economists to step to the front of the room and make personal pledges to undo
the damage that has been wrought in the name of supply and demand. Commit to
studying what's wrong with markets, as opposed to how beautifully perfect
they are. Work to empower rank-and-file folk, instead of dominating them with
your apparent but phony expertise. Start to imagine
economic ideas that could change the world, rather than invoking economic mumbo-jumbo
to justify inequality and explain why it's inevitable.
12: Help other economists who come your way. Perhaps the
scariest thing about the economics profession is that it seems to be becoming
more homogeneous with time, not less. Economics departments at Canadian
universities, by and large, will only hire entry-level faculty who
demonstrate requisite acceptance of the free-market assumptions supporting
their elaborate but fragile intellectual scaffolding. At least twenty years
ago there was a token radical or two in each department, around whom
critical-minded students could congregate. Today even that is rare. Most
progressive-thinking students flee in panic from economics after their first
Recovering economists of any age need help to rediscover their latent
humanity and rededicate their energies to the pursuit of things that really
matter. But none need our assistance and solidarity more than economics
students. Most are motivated by a gut-level conviction that learning
economics should allow us to do great things for people and the planet.
(Needless to say, they didn't go into the field because of the snappy dress
or witty humour of their professors!) Yet they are left to flounder in a
curriculum that tests mathematical aptitude more than ability to think, and
in which the urgent crises of the real world are made invisible. If you
encounter someone like this, put your hand on their shoulder. Tell them you
know how it feels. Help them find alternative sources of economic
inspiration, and places where they can befriend other recovering
economists-in-training. Show them they're not alone.
Don't get me wrong. Personally, I'm very happy to be an economist. I still
believe that there is a material basis to most of the problems humanity
faces. I think economics is the best way for me to make a contribution to
human progress and social change, and I've enjoyed great personal
opportunities because of my career choice. But lurking in my brain is a
nagging awareness that my own success was built at least partly on the
pseudo-rationalist coattails of the whole arrogant discipline - even as I
espouse a twisted, and hopefully insidious, version of that
So collectively, my profession must come to grips with its elitist addiction.
I do it every morning when I wake up, look myself in the mirror, and say out
loud: "I am an economist."
A version of
this article appears in the current edition of This Magazine www.thismagazine.ca. On-line help for recovering economists is provided by the
Progressive Economics Forum www.web.ca/~pef
of which the author is a member.
Jim Stanford, “Confessions of a Recovering Economist”, post-autistic
economics review, issue no. 21,
13 September 2003, article 4, http://www.btinternet.com/~pae_news/review/issue21.htm