How Much Power Do Economists Have, Really?

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There’s a fabulous talk by Paul Krugman on MIT World that spells out the Nobel Laureate, New York Times columnist, and — most important — ex-MITer’s argument that today’s policymakers are moving too timidly to solve our world’s massive economic problems. It’s smart, convincing stuff.

But is Krugman accomplishing anything? He has climbed as high as an economist can in terms of public acclaim and having a platform to preach to a general readership, but no one expects his suggestions to become policy. Similarly, Joseph Stiglitz, another Nobel-winning economist who has a media platform, recently told an interviewer: “There is no natural position for me within the usual structure of government.”

And let’s not forget Simon Johnson, former chief economist at the International Monetary Fund and now at MIT Sloan, whose Baseline Scenario blog with James Kwak offers some of the most sober and well-reasoned economic analysis nowadays. Listen to him in this recent NPR interview. His interviewer, the savvy Tom Ashbrook, calls Johnson a “bigfoot economist,” but what does that mean? How much power do bigfoot economists have these days, even during a bona fide economic crisis?

And, while you’re thinking about it, how much power should economists have? What’s the right balance between economic sanity and political reality.


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Comments (3)
Hip Hop
James Kwak interview was great.
Our power is only limited by our own imagination. So how much power do economists have depend on how much the economists want it.

To start from the education stage. If an aspiring economist goes to a graduate economics program at the traditional economics department, then most likely s/he will learn economic theories/models and empirical tests - not so much about persuasion/negotiation techniques that one needs to accumulate and exert power. If s/he prefers the latter, s/he may opt going to public policy schools where one can learn about economic theories/models, empirical tests but also the persuasion/negotiation techniques. So there's a trade-off here.

As for the career stage, there's also a trade off between becoming an academic economist or a policy entrepreneur.

Prof. Krugman has chosen the earlier path and then become a prolific columnist to the joy of many of us. Thanks to him, we get free economics education to balance the writings of policy entrepreneurs.
Sean M. Brown
From Joseph Stiglitz's recent column, "Who Do These Bankers Think They Are?":

"This is the challenge facing the U.S. and the rest of the world—and the prognosis is not good. The reason is simple: Though bankers may have done a poor job of managing financial capital, they have excelled at getting returns out of their investments in political capital. Since the crisis, they have used all their political muscle to resist curbing their bad practices."