Quote 19: Dani Rodrik on the problems of economics again

This was a quality quote (ht Economist’s View):

Paradoxically, then, the current disarray within the profession is perhaps a better reflection of the profession’s true value added than its previous misleading consensus. Economics can at best clarify the choices for policymakers; it cannot make those choices for them.

I have to admit – I agree with Dani Rodrik a more during a credit crisis than I do outside of one (although, it is a small sample 😉 ).

Note the last statement in the quote – we cannot make choices for policymakers. Why? Because it involves making value judgments we are ill equipped to make. I was concerned that economists had forgotten about this – but it turns out I was just looking at the wrong economists!

However, given his own argument – why did he term contemporary macro a failure? Is it because he thinks that the use of a scarce resource (time) in a role that isn’t offering the best social return is bad? I think we need someone to frame a potential incentive issue for macroeconomists here (wink wink Rauparaha 😉 )