Economics is “horrendously misguided” and obsessed with “completely unimportant things”
Jeffrey Sachs is one of the most respected growth economists in the world, a large part of that because so much of his work has been outside the Ivory Tower helping real people. In particular, he helped advise governments in Latin American, Eastern European, and the former Soviet Union transition from Communist to market economies, and most recently has focused on alleviating poverty in Africa.
Sachs now argues that the economics profession has lost its moral groundings and forgotten that its primary function is to help people.
My profession is pretty useless on this, just horrendously misguided in what it spends its time on. Because it spends its time on completely unimportant things and neglects the very important things… it cannot be the most important issue in the world whether the US grows at another 3% or 3.5% or 2.9% a year, when over the last 65 years there’s been no discernible rise in wellbeing and lots of discernible worsening of social wellbeing.
Sachs is also known for criticizing what he considers an overrated belief in institutions and oversimplifications in the profession.
This “institution matters” idea is one of those that I’ve found taken to extremes by causing a kind of geographic blindness, if I could say it. Geography obviously matters a lot. Resource base matters a lot. Institutions matter a lot. The world’s complex. We’re dealing with complex systems.
What are your thoughts?
If you like this post, please upvote, resteem, or share below! Please check out my other articles and follow @finpunk to keep in touch with future content.
Rob Viglione is a PhD Candidate in Finance @UofSC with research interests in cryptofinance, asset pricing, and innovation. He is a former physicist, mercenary mathematician, and military officer with experience in satellite radar, space launch vehicles, and combat support intelligence. Currently a Principal at Key Force Consulting, LLC, a start-up consulting group in North Carolina, and Head of U.S. & Canada Ambassadors @BlockPay, Rob holds an MBA in Finance & Marketing and the PMP certification. He is a passionate libertarian who advocates peace, freedom, and respect for individual life.
Image source: http://www.azquotes.com/author/12868-Jeffrey_Sachs
Totally; economics has become misguided. Although some intellectuals have always misunderstood it, it has now become the law. The goal is to create a utopian society with the right people in power rather than to describe the consequences of anyone's actions, as an individual or in a group.
"The goal is to create a utopian society with the right people in power..."
Excellent point...my gripe is that the profession has gone too far down the path of prescribing top-down policy to be imposed than on thinking of bottom up ways to reduce frictions, make markets more efficient, run value-creating businesses, etc.
Does he have any books out? I've never heard an economist talk about morality before.
LOL that's a shame...morality should be at the heart of economics!
Yes, some of his work available on Amazon:
https://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3Daps&field-keywords=jeffrey+sachs
Also some good books about him. I actually haven't read any, just learned about his work in a growth class in the PhD program and then watched his interview with Tyler Cohen, which got me digging a little further into his background.
OK cool. Thanks:)
Ha-Joon Chang gets close enough to talking about morality. Among other things, he argues that: "all major developed countries used interventionist economic policies in order to get rich and then tried to forbid other countries from doing similarly" in his book "Kicking Away the Ladder". That book was followed by "Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism".
Modern Monetary Theory as put forward by Bill Mitchell et al. also doesn't shun the odd moral discourse.
Many people here of the "free market will solve all and the less intervention the better"-ilk will have steem (hah!) coming from their ears when they read these books, but that is not necessarily a bad thing.
Thanks for the recommendations:)