Caution: celebrity economists ahead
14 December, 2010
Whenever I hear somebody described as a “well-known economist”, I think of the expression “celebrity chef”. Usually the latter is somebody who is too busy being a celebrity to devote sufficient energy to getting the chef bit right. The drug of fame and the lure of publicity seem often to eat away at the proper exercise of the very craft in which they made their name. I am getting worried about certain economists for the very same reasons.
Last month I read an article headlined “Top 5 economic superheroes of the Irish bust”. The introduction set the tone:
At some point in the last two years, economists became sexy. Tectonic shifts in the global economy turned these dusty denizens of academia into powerful celebrities. Here’s Ireland’s top 5….
You can probably have a good guess as to who the nominated dismal scientists were. Most of them are very good at attracting media coverage, and they do seem to be quite prolific (incidentally, I hope the academic economists are not writing their articles and blogs when they are supposed to be doing their day job….).
But that’s not my point. My point is that, in the case of economists, the old financial services health warning is emphatically true: “past performance is not a guide to future performance”. So, for instance, the fact that David McWilliams or Morgan Kelly were correct in their doom-laden predictions on a few occasions in recent years does not in any way indicate that they will be more accurate in their current prognostications about future economic developments, as compared to a random selection of their economist peers. That’s the nature of economics.
It’s worth quoting again the fact that in his speech at the 1974 Nobel Banquet, the (controversial) prize-winner Friedrich Hayek stated that if he had been consulted whether to establish a Nobel Prize in economics he would “have decidedly advised against it” primarily because “the Nobel Prize confers on an individual an authority which in economics no man ought to possess… This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.”
So, just as one has reason to approach carefully the restaurants of celebrity chefs, one should treat with appropriate care the outpourings of our economists, no matter how well known (or perhaps especially if they are well-known).
Somehow, the following words written by Clive James (about Auberon Waugh) spring to mind: “….he was not one of those journalists who, lacking the means to make reasonable opinions interesting, must resort to unreasonable opinions in order to get the reader’s attention.”