Wednesday, December 24, 2008

The follies of economics?   posted by Razib @ 12/24/2008 11:15:00 AM

Massimo Pigliucci has a post up, Economics learns a thing or two from evolutionary biology. There are many points within the post which I would agree or disagree with, but, I get the sense that the current economic morass is precipitating these sorts of criticisms of "economics." I'm not one to disagree on the importance of behavioral economics, and I believe a serious engagement with the reality that rationality is bounded will only benefit the human sciences. That being said, it seems to me that the current problems are not ones of economics or the economics profession as much as the particularities of the finance profession in terms of its incentive structure. By analogy, imagine blaming zoologists and botanists for the actions of agribusiness (e.g., excessive utilization of antibiotics so as to maximize short term firm productivity at cost to a risk of a high negative externality). Rather than suggest that economics needs to learn from the life sciences (I think this is happening), I believe that you need to look to public choice theory and other extant frameworks available off the shelf.