You know how it goes. You push ahead, doing your thing, ploughing your furrow and then….

Well, as a Florentine bloke put it:

Nel mezzo del cammin di nostra vita

mi ritrovai per una selva oscura

ché la diritta via era smarrita.

And here I am, midlife, in those dark woods, looking for the exit route. Luckily, Virgil’s too busy hanging out with Scott, Alan, Gordon and John to come along and bother me with a package trip through the allegories of hell. Unluckily, mainly for you, Gentle Reader, that means that I’m going to have to work it out, in public, on the internet. And so, I’ll lay out the starting point, less cryptically:

I’m not so well endowed with faith in economics these days. There. Said it. No the Truth isn’t setting me Free – I’m reminded of Chesterton’s observation that people who give up on religion end up believing in everything, or anything, rather than nothing. Instead, I’m thinking of what it is that is really wrong with economics and what to do about it. Rather too much, as it happens. Partly this is because attacking economics has been about the easiest fish and barrel shoot in town for a while, because people will listen however inane your attack when the target is as obvious and unpopular as the trade has made itself, which means that what used to be called column inches have been filled with guff that attacks what people imagine the field to be, rather than what it is. Partly it’s because some people have made much more intelligent attacks that have called me on some of the less defensible parts of the enterprise. And partly it’s just because I’ve been listening to Landslide too much. But really it’s because observation and theory keep telling me different things and I can’t cope with more than three voices in my head at once.

So far, so good, and I’m sure people of some ideological perspectives will be applauding a Damascene conversion to their viewpoint. Thing is, I make no such conversion. I’m still a Catholic (have been since before I was born), even if I don’t go to mass and do break some pretty strict edicts now and then, because I was immersed in that culture and see many things through a lens that I learnt to use at catechism. I’m still an economist, just one who has arrived at some views on the practise of economics, the dimensions of its analyses and the culture attached to those two, and finds himself in some disagreement with his trade (and with himself, to be honest).

What I do think, though, is that mainstream economics has left me. In short, I think that it’s focus has narrowed excessively. It has stopped paying attention to ideology and imagined itself to be purely technical as if that were possible in the real world. It frequently uses the wrong tools for analysis, even from the ones in its pretty formidable toolkit. It behaves as if entities of entirely different scales were equivalent. It has allowed itself to become a tool of oppression. It has imagined that solutions are not entirely contingent on many external factors, and lapsed into hubris. It’s become the 1990s Tottenham Hotspur of the social sciences, living on past glories and not investing its future. It frequently asks the wrong questions and then gets surprised when it gets silly answers. It’s insufficiently 1) human, 2) ecosystems oriented, 3) questioning of its root ideas and at the same time excessively 1) over quantified, 2) atomised and 3) looking for logical purity over explanatory power.

(Colleagues may well disagree with the above. I think that at various times one or several of those factors apply, not necessarily all at the same time)

So what would I want to do with it? Not rescue it or salvage it – not my job – but expand it. Go a bit meta. Start from a new jumping off point and see if that makes a difference. My opening salvo comes from the really difficult task of telling someone who hasn’t studied it -Hello, Mum! – what it is that economics is, should be, or even could be doing. So here’s my operational beginning in re-opening the mind of homo economics:

Economics is the study of the human ecosystem. The human ecosystem is distinguished from non-human ecosystems in two ways – 1) except over the very long run, the carrying capacity of that system is not fixed and 2) the participants in the system have volition and agency and can use pieces of information about each others valuation in order to trade resources or opportunities with each other. That’s really it – it’s a special case of ecology as much as it is any other form of enterprise. All the rest of the endeavour start at these two points. You are really looking at a very specific ecosystem with some very specific properties.

How does this change things? Firstly, I think the operative part of the word is system. Economies are massive, interconnected and complex systems where diversities between the participants are as important as the similarities between their actions. Secondly, it opens up space for discussion of evolution, and in particular its complete disregard for teleology and the way it makes predictions of the future state of a system entirely contingent. Thirdly, it allows economics to be mucky in the way ecology is. Fourthly, it allows you to be more creative about modelling strategies since you are now actually thinking about the interplay of different types of actor within the system rather than the individual decisions each makes.

Overall, I’m not at all confident that I’ve nailed any of the problem, I am just sure that it is a problem, and that this is one way to take the discussion forward in a way that isn’t likely to result in bad government or miserable societies, because one look out at the world (admittedly in the middle of a dark, dank London autumn) and you can see both those risks likely to materialise around you. I’m pretty sure I’ll have recanted this view and provided an alternative definition by the time I get to the next post. It’s just that nos in illis mutamur an’ all.

After all, time makes you bolder and even children grow older. Here’s the Dixie Chicks brilliant version of that august song.

Landslide.