This article is directed at all those who are gung ho on ?understanding? Economics. It is important that I provide certain caveats hinging on how the ?experts? of this social science naturally ?give it away? in the very process of using tools largely meant for the pure sciences. Let me illustrate this point in what follows. I?ll start this article with three episodes from the most celebrated fields today.
Mathematics: Taniyama and Shimura make a strong conjecture on the validity of the modularity theorem. What happens next? Taylor, Diamond, Conard, and Breuil prove the modularity theorem.
Physics: Einstein makes theoretical claims on the correctness of his theory of relativity. What happens next? Sir Arthur Eddington?s famous gravitational lensing experiment confirms it.
Economics: Robert Lucas in his presidential address to the American Economic Association declares that ?the central problem of depression-prevention has been solved.? What happens next? The recession.
The first episode relates to the joint endeavour of generations of mathematicians in the quest for the solution to the notorious Fermat?s Last Theorem?one of the most prominent challenges ever known in the field. The second episode reminds me of a broader issue: many scientists have been brutally silenced by the Church on charges of heresy and thus the eventual development of physics could rely solely on seeking the truth?any claim made must be proved, no matter how challenging the endeavour?and to ease a challenge, requires a conglomeration of great minds directed at a common motive. The last episode reminds me of the story of the Titanic. ?This ship is unsinkable, even God Himself can?t sink it!? screamed the newspaper headlines just before the Titanic took off on its maiden voyage. We all know what happened next.
What is common between the first two episodes is a mutual convergence of thought?a sense of togetherness during known crises. Those involved find themselves engulfed by a quest that manifests itself in the hunt for different methods to arrive at the same conclusion. Unfortunately, one can?t escape the reality that economists do just the opposite? look for elegant tools to forcefully get to different conclusions they want. I can think of two famous examples right away. Introduce a social planner in the Hotelling?s spatial game?the equilibrium allocation immediately changes; every pure strategy profile becomes a Nash equilibrium if you introduce Rabin?s fairness axioms in the Battle of the Sexes game that is otherwise characterised by a few Nash equilibria in pure strategies. The point is simple?you?re regarded high for people can hardly budge you off your opinion; there is always a way out. What happened during the recession ? a crisis by definition? Most of the intellectual debate comprised blame games with the likes of Krugman and Bailey on one hand and the likes of Levin and Cochrane on the other. Convergence of thought remains only a dream. Another example of this divergence concerns the left versus the right debate with Prabhat Patnaik on the former side and Jagdish Bhagawati on the latter. It is no longer surprising that Economics remains a field where two people can receive the Nobel prize for making claims that are diametrically opposite to each other. It will be unfair on my part to ignore conflicts in belief that have clouded the ?superior sciences? including physics and mathematics. In Physics, for example, the conflict between Eddington and Chandra on the ?Critical Mass? debate did eventually see a resolution with Chardra emerging as the victor.
So coming back to Economics, often cluttered with such conflicting thoughts, I asked myself, as an undergraduate student, how to decide on which line of thinking to follow. The conclusion, to admit the truth, is that, it has taken eight years of education for me to realise that I am not good at the subject. This also explains why I immediately ran for instant coffee following my guest appearances, on college days. As of now, I can only say that intellectual economic thought is far from me ? I only rely on common sense.
The author is a research scholar at the Indian Statistical Institute, and an economist with the Scottish Economic Society