From Bloomberg Businessweek, September 29:
Angus Deaton says Larry Summers and other great minds in the profession have lost sight of its most important mission: Improving people’s lives.
The Scottish-born son of a one-time coal miner, Angus Deaton has spent a half-century rising to the top of the economics profession, winning a Nobel prize in 2015 and celebrated since alongside his wife and co-author Anne Case for identifying the middle-aged “deaths of despair” that have plagued America in recent decades. So, when the Princeton University emeritus professor has a new book out with the sober title Economics in America you might anticipate a valedictory celebration of the wonders of the discipline.
It’s anything but. What Deaton calls his mea culpa is a broadside on his profession and some of its most celebrated figures. Economists and their relentless focus on markets and efficiency, as well as their dogmatic attachment to theories (even after they’ve been disproven), have had life-or-death consequences for millions, he argues. The book, coming out on Oct. 3, has already triggered a debate that has him facing off with at least one other high-profile colleague.
The 77-year-old Deaton can be quietly sharp-tongued in conversation. He’s also polite, though. In an interview he will tell you that Larry Summers, the former US Treasury Secretary and president of Harvard, remains a friend and that he still considers him to have a prodigious economic mind. It’s just that Deaton believes Summers and a small cadre of influential economists helped lay the foundation for the Asian financial crisis of the late 1990s and also the 2008 global financial crisis by recklessly helping to ease restrictions on the flow of speculative capital around the world.He makes that accusation in the chapter “Is Economic Failure a Failure of Economics?”—and it’s set off what Deaton calls a “consequential debate” with Summers over the role of economists in society that is also intensely personal. “I think of him as the best and brightest of my generation of economists, someone we all wanted to be like. So his views are not different from those that I held, too,” Deaton says of Summers. The difference, Deaton says, is that his own views have flipped.
Summers, who is a Bloomberg contributor, calls Deaton’s accusations regarding his potential role in causing two of the great economic crises of our time a “sweeping left-wing assertion rather than serious analysis,” and points out that the Asian financial crisis happened before he became Treasury secretary. “No one can be satisfied with where we have been or where we are on financial stability issues, but framing the issue in terms of all restrictions being good or bad is unworthy of an economist of Deaton’s stature,” he said in an email.
Deaton’s primary complaint isn’t with Summers. It’s that the profession has become intoxicated with markets and money, losing sight of its primary mission as set out in its earliest days by Adam Smith, John Locke and others who came to economics via philosophy and other fields, rather than commerce. “The discipline has become unmoored from its proper basis, which is the study of human welfare,” Deaton writes in his book.
In Deaton’s mind this is a life-or-death matter. Because nothing to him exemplifies how economics has gone awry more than the epidemic of deaths from alcoholism, opioid overdoses and suicide that has hit the American working class in recent decades. He believes one primary cause of that surge was economists’ enthusiasm for globalization, with its emphasis on the unfettered movement of goods, capital and jobs. “You can’t think about trade policy and think about money entirely,” Deaton says. “It’s people’s souls and their communities and their churches” and their lives that are at stake when jobs are dislocated....
....MUCH MORE
If interested, we have quite a few posts on Professor Deaton.
For more economists ripping economists see also:
The study of economics does not seem to require any specialised gifts of an unusually high order.
Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy and pure science? Yet good, or even competent, economists are the rarest of birds. An easy subject, at which very few excel! ....MORE
And for readers who are interested in practical economics, January 2011's:
