What Are Economists Paid to Do?

by Will on October 5, 2010

Economist Brad DeLong expresses confusion about why incompetent economists, who have been chronically wrong in their predictions for years, still have their jobs. DeLong is naively assuming that what economists are paid to do is to find The Truth and to promote The Good. In my observation, that is not what most economists are paid to do. Economists are paid to say whatever wealthy people want to hear, and they are mostly good at doing this.

If I had to list the economic theorists who made the greatest contibutions to the school of thought, I would say: David Hume, Adam Smith, Thomas Malthus, Henry George, Irving Fischer, and John Maynard Keynes. What is striking when you look at this group is that the first four were all amateurs, not formally trained in economics and not dependent on pay for their work. They were public-spirited men of liberal disposition, trying to think hard about how to best promote the interests of the unpriveleged. Fischer and Keynes, by contrast, were trained economists. Keynes didn’t need the income from his work as an economist, and so had no reason to please his rich masters. Fischer is the exception: and indeed, he’s the only one these guys who fell prey to the habit of repeatedly saying untrue things because rich people wanted to hear them (he got it all wrong about the late-20s stock market, and all wrong again about the ensuing recession). Amateurs seem to have a better track record in the economic profession than trained economists do. Amateurs are trying to find out the truth, while economists are trying to comfort and pamper the wealthy.

How else can we explain the strange fact that Larry Kudlow has been warning about imminent hyper-inflation for the last two years, when actual prices have hardly gone up at all, and he has a TV show that people watch? And how he spent years saying that there was no housing bubble? How else can you explain that conservative economists keep warning that bond rates will jump, when in real life they just keep getting lower and lower? Economics is less a science than an advocacy program for those who have wealth and privilege, whether that privilege is earned or unearned. This is why the Dismal Science has mostly been a cudgel for conservatives who also want to defend privilege wherever it occurs, even though it often suggests conclusions that oppose privilege.

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