• Reader Response: In Defense of Economics

    In a comment to the post by me and Julian Jamison on income inequality Gomez wrote

    Economics and game theory are inappropriate to address social concerns of income inequality, except as a matter of sheer curiosity.

    Of course if I agreed I could not continue doing my job. So, naturally, I could not disagree more with Gomez. Here’s why:

    Economics is a tool. One can debate the appropriateness of its influence but I think such a debate misses the point. Economics offers the ability to study a problem with a degree of precision not offered by other disciplines. That precision doesn’t tell us what to do, but it does provide insight we ought to at least consider.

    The conclusion of my post The Curse of Nonuniqueness expresses similar sentiments, though the focus there was health reform not income inequality. I wrote,

    The value of welfare economics in particular and economics in general is the clarity of thought it enforces. A welfare analysis of almost any type will lead the analyst to consider particulars and consequences that are opaque to casual thought.

    I’m all for removing opacity. It is hard to imagine an issue of public policy for which ignorance would be beneficial in the long run, if even in the short run.

    More importantly, economics, its rhetoric, paradigms, and conclusions are accepted in the arena of policy debate. They may not convince, but they’re admitted. That is, economics opens a door. People of influence–policymakers, journalist, etc.–will hear economics. They often seek it. I think to dismiss it is a self-inflicted wound. The opposition (whatever you perceive that to be) may not lay down the arsenal of economics so readily. Then you’ll be out-gunned. Is that a good idea? I don’t think so.

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