Tuesday, 19 December 2017

Response to Larry Elliot's "Economics needs a new Reformation" article

This letter was sent to the Guardian in response to Larry Elliot's article. It is less of criticism of the reformers 33 points (which I did not think were helpful to their cause), but more a criticism of Larry Elliot's portrayal of economics.

I enjoyed Larry Elliot’s recent articles on measuring GDP and inequality. However, I was deeply troubled by his most recent article in support for a “Reformation” in economics. The list of 33 points stuck to the door of LSE’s economics department would be met by bafflement to those working within mainstream economics simply because we are already working on them. To give one example, points 17-19 relate to inequality. Inequality is not only my specialist research area, it is also the subject I teach to undergraduates at Durham University.   
Another example Mr Elliot gives of why economics needs a reformation is that economists need to learn from other disciplines, such as psychology, by citing the auto-enrollment of pension coverage as an example. However, the auto-enrollment of pension schemes is an example of economists already learning from psychology (specifically, the work of Richard Thaler, a noble-prize winning economist).

Mr Elliot even goes to suggest that mainstream economics was in support of UK austerity after the financial crisis. This is certainly not the case as highlighted by a letter sent to the Guardian entitled “Jeremy-Corbyn’s-opposition-to-austerity-is-actually-mainstream-economics” signed by non-other than Mr Elliot’s preferred “heretic”, Steve Keen. 
There are good arguments for rethinking the way economics is taught and practiced, including the debate surrounding pluralist approaches. Unfortunately, Mr Elliot will help neither side of the debate if he continually mischaracterises the present state of economics.
Dr David Chivers, Durham University