November 23, 2017

What do you mean economists are boring?

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The Financial Times had an astonishing story Friday 26th May. The World Bank’s Chief Economist Paul Romer had been stripped of his line authority and management duties following what the FT called ‘uproar’ and a ‘revolt’ by his 600 economists. The Guardian also covered the furore here.

So what had caused such tumult? A street fight between Keynesians and monetarists? Another banking scandal, or perhaps even a little corruption?

NY Times Cities For Tomorrow Conference

NEW YORK, NY – JULY 21: (L-R) Mayor of Washington DC Muriel Bowser, economist Paul Romer and CEO of Renew Financial Cisco DeVries speak onstage during the Citi Lunch at NY Times Cities For Tomorrow Conference on July 21, 2015 in New York City. (Photo by Larry Busacca/Getty Images for New York Times)

No, not really. The World Bank is actually quite a staid and boring institution – indeed, that is what the fuss was all about. Professor Romer had criticised his staff’s ‘turgid’ writing in an email to them and said he would block publication of the latest World Bank report if the word ‘and’ made up more than 2.6 per cent of the text. He cited 2.6 per cent as the current frequency of ‘and’ in scholarly writing. But he also noted that a report he had commissioned showed the frequency of ‘and’ in World Bank reports had increased to about 7 per cent in recent years.

However, as an economist I feel his staff’s pain. Buffering a series of ‘ands’ from each other with options to choose from is what we do. We even start our introductory texts by saying economics is about choices, and how can you have choices if you cannot have: ‘on the one hand this, and on the other hand that …’ (and yes, I know that was why the politician pleaded for a one-handed economist …)?

John Maynard Keynes, one of the original architects of the World Bank, once claimed: ‘Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back’. That is what we want to be thought of as – obscure, anonymous, forgotten.

The danger for economists is that if ‘ands’ were banished to the extent that we could not give choices, then our analysis would be reduced to giving clear and focused advice – which is the highly risky outcome Mr Romer also told his staff he actually wants. That is dangerous; it would mean we would have to take responsibility for our advice when things go wrong instead of being able to tell the decision maker that they just made the wrong choice.

However, there is a flaw in Romer’s argument and it is another economic principle – the law of unintended consequences. The ‘and’ is not the only tool in the armoury of the economist seeking a defence shield of options.

On the one hand, I have just downloaded the Bank’s January Global Economic Prospects and found an abundance of ‘buts’, ‘ors’ and ‘howevers’; a respectable number of ‘althoughs’; several variants of the under-appreciated ‘alternatively’; and even two precious instances of ‘on the one hand…on the other hand’. I think Mr Romer can expect to find these old standbys proliferating in future World Bank reports in the light of his edict.

And on the other hand, the economist who has really mastered the trade will push the elasticity of the English language even further. The renowned economist Pigou once lamented that when he had solved a problem, he inevitably found that the even-more-renowned Marshall had already anticipated the solution – sometimes in parentheses, perhaps even buried in some obscure footnote.

And that is what makes a good economist truly great.

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