Saturday, 26 August 2023

Peter Siminski on making economics (and economists) better

Earlier this month, Peter Siminski (University of Technology Sydney) wrote an interesting article in The Conversation entitled "6 reasons Australians don’t trust economists, and how we could do better". Briefly, those six reasons are:

  1. Weak diversity and reflexivity;
  2. The media and conflicts of interest;
  3. Efficiency preferred to equity;
  4. A heavy international focus;
  5. Declining economics training; and
  6. Overconfidence.

Most often, economists face critiques like this from people outside of the discipline, but this time it is from an insider, so we should at least pay a little bit more attention. And I agree with all of his points, which sadly apply to the discipline in New Zealand as well. I encourage you to read the whole article. However, I just want to add to a couple of his points with a New Zealand perspective.

On the first point, I've written before about the lack of diversity in New Zealand economics (specifically gender diversity - see here and here). It's worth updating that data though. As of today, there are 76 economists in the New Zealand top 25% ranking on RePEc, of which only ten are women (#27 Suzi Kerr; #40 Hatice Ozer Balli; #44 Trinh Le; #49 Susan Olivia; #54 Anna Strutt; #62 Gail Pacheco; #68 Isabelle Sin; #71 Elodie Blanc; #73 Sholeh Maani; and #76 Paula Lorgelly). We're trending in the right direction at least, going from less than 8 percent women in this ranking in 2017 to around 13 percent now. It's still going to take a long time to achieve anything approaching real parity though.

On the decline in economics training, Siminski notes that at the high school level, "In New South Wales at least, economics has been mostly replaced by “business studies”". We have observed something very similar in New Zealand - a gradual replacement of economics (and accounting) with business studies. Where a decade or more ago about two-thirds of my introductory economics class would have studied at least one year of economics at high school, that is now down to less than a quarter. It's just as well that we don't assume any prior formal economics knowledge when we teach our introductory papers, because in the main it doesn't exist. Although that doesn't mean that students don't know any economics - see this 2014 article by Steven Lim and myself (ungated earlier version here). And, many of our best economics students didn't study economics at high school. I didn't study economics at high school (in fact, I didn't study any economics at all until I returned to university as a mature student). Nevertheless, we do face issues with non-economics students distrusting economics (and that may become an even bigger issue next year, when ECONS101 becomes compulsory for all business students at Waikato). However, in my experience, even a little exposure to real economic thinking can be enough to make students 'see the light' (or at least, to realise that economics is not something to fear or avoid).

Overall, in my view what really makes people distrust economists, and is a point that Siminski is too timid in presenting (as part of his discussion of overconfidence), is arrogance. Economists simply think we know more than other people (including subject experts) about any number of subjects, and we aren't shy about expressing this. I'm as guilty as any of my fellow economists of this (and this blog may be Exhibit A in the evidence of that). We could do with toning ourselves down a bit. Siminski is right in concluding that:

A large dose of humility would help, and it would help build trust.

Might that be too much to hope for? 

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