In 1930 John Maynard Keynes wrote of his hopes for the future of his profession. To the modern reader, they seem rather modest. “If economists could manage to get themselves thought of as humble, competent people on a level with dentists”, he noted, “that would be splendid”.
The humility of the ambition is rather refreshing but almost a century later economics and economists occupy a rather different public space to dentistry and dentists. There are good reasons for this. One of the most exciting aspects of economics is the fact that there are still plenty of issues and topics on which well credentialed, highly proficient specialists can disagree. Such disagreements, thankfully for patients, are far less common when it comes to the care of teeth.
The reasons for disagreement can stretch well beyond differing theoretical frameworks or judgements over the relevant empirical evidence. Much of economics, especially in areas closely related to policy, fundamentally involves trade-offs and opportunity costs. Reasonable people can differ on how they weigh the value of lower unemployment versus lower inflation or where they stand on the equity-efficiency trade-off – or even if such a trade-off actually exists.
It is the close relationship between economics and many core areas of public policy that make it the most unlike dentistry. Whilst the old conventional wisdom that when it comes to elections “it’s the economy, stupid” may no longer hold entirely true, if it ever did, there can be little doubt that the core issues of unemployment, inflation, living standards and taxes matter politically.
The past few years – with the pandemic, the energy price shock, the surge in inflation and all the rest – have been a great time to be an economist. Indeed, the subject has rarely been out of the public limelight since 2008 and the global financial crisis. The sad truth though is that interesting times for economists rarely make for good times for most people. On this level Keynes was right, if most people never had to trouble themselves with dentistry; they would probably be happier.
Working in a subject close to the heart of the public policy and political debate brings its own rewards, but sometimes that silver lining comes with a cloud. The nuanced debate of the academy often becomes twisted out of shape when forced into the world of politics. Trade-offs are played down, uncertainty is minimized and bold – and occasionally unsupported – claims are made. In an election year, the risks of such partisan arguments increase markedly.
The fear is that the cautious arguments made in a research paper or academic seminar are stripped of their ambiguity when they are turned into ammunition in the political battlefield. Strident claims rarely help inform the public or lead to better policy,
For more than a decade and a half the polls of leading academic practitioners conducted by the Kent A. Clark Center, and its predecessors, at the University of Chicago Booth School of Business have sought to better inform the public about the reality of expert opinion on core economic questions shorn of partisan reasoning. The three panels now cover the United States, Europe, and Finance.
The nuance found at the cutting edge of the subject is retained. Take, as an example, last week’s poll of the European panel on Germany’s debt brake, the constitutional rule that limits the size of budget deficits, a subject never far from controversy in the political economy of the Eurozone. 47% of respondents agreed that such rules where an effective way to impose discipline on a country’s public finances whilst only 20% expressly disagreed. But 53% also agreed that the debt brake was a substantial constraint on vital public investment in physical and digital infrastructure and the green transition. In the often-polarized German – and wider European – political debate, the country’s debt brake is either a guarantee of fiscal rectitude or a constraint on sound macroeconomic policy-making. The view of the experts though is that it is probably both. There can be few clearer illustrations that macroeconomic policymaking is a study in trade-offs.
What is more, and almost totally alien to the heated cut and thrust of politics, is the fact that the polls emphasize the uncertainty inherent in economics. 14% of those surveyed, for example, believed the answer to whether constitutional debt brakes imposed fiscal discipline was uncertain. More tellingly the polls’ results are released in both their raw form and weighted by the confidence of each respondent. Weighted by confidence, for example, 73% of those surveyed reckon that the German debt brake is a substantial constraint on vital investment.
The use and value of the surveys extends well beyond immediate questions of policy. Whilst one might expect politics-adjacent questions to be subject to more partisan biases, the survey has also proven its value when it comes to markets-related issues, the path of interest rates and the immediate economic outlook. Unlike private sector economists who often find themselves boxed into a house view or fearful of annoying colleagues, the members of the panel have the ability to freely assess the evidence and speak for themselves.
Whilst a US institution might be, understandably, reluctant to take advice on dentistry from a British writer the Kent A. Clark Center is slowly but surely doing its bit to empathize both the humbleness and competence of the profession. The polls show both where the settled view of experts sit and, just as importantly, where the best answer is simply “we don’t know”. Keynes would no doubt think that rather splendid.
