Pros, cons and pseu­dos

Jamaica Gleaner - - @ISSUE - Tony Deyal Tony Deyal was last seen say­ing that there were two econ­o­mists, one pro­fes­sional and one pseudo, sit­ting at a nud­ist colony. The pseudo asked, “Have you read Marx?” The pro said, “It’s these rat­tan chairs from Guyana.”

ON THE first day, God cre­ated the Sun. In re­sponse, the Devil cre­ated sun­burn. On the sec­ond day, God cre­ated sex. In re­sponse, the Devil cre­ated mar­riage. On the third day, God cre­ated an econ­o­mist. This was a tough one for the Devil, but, in the end and af­ter a lot of thought, he cre­ated a sec­ond econ­o­mist.

Now two ques­tions have emerged. The first is, which hand does the first or sec­ond econ­o­mist favour? Or are they both am­bidex­trous? There is a plea to God sup­pos­edly made by al­most ev­ery head of gov­ern­ment but which orig­i­nated with US Pres­i­dent Harry Tru­man. It is said that Tru­man begged the Almighty for an eco­nomic ad­viser who was one-handed. Why? Be­cause all the econ­o­mists giv­ing him ad­vice were never di­rect and al­ways beat around the bush with, “On one hand and on the other ... . ”

The sec­ond, and at this stage the more im­por­tant ques­tion, emerged re­cently from Trinidad and Tobago (T&T) where Dr Ter­rence Far­rell, the chair­man of the Gov­ern­ment’s Eco­nomic Devel­op­ment Ad­vi­sory Board (which re­ports di­rectly to the coun­try’s prime min­is­ter) is re­ported as “blast­ing” non-econ­o­mists for mak­ing pro­nounce­ments on the state of the econ­omy in suc­ces­sive post-bud­get de­bates.

Ac­cord­ing to the Trinidad Ex­press, Dr Far­rell, “serv­ing as the fea­tured speaker at The Uni­ver­sity of the West Indies (UWI) Con­fer­ence on the Econ­omy (Cote) 2016 at the Learning Re­source Cen­tre, Far­rell said those pseudo-econ­o­mists were ac­tu­ally do­ing the coun­try a ‘grave dis­ser­vice’ to the na­tion” and that “pro­fes­sional econ­o­mists need to re­assert their value and their role in the na­tional dis­course on eco­nomic is­sues”.

So the sec­ond ques­tion emerg­ing from the war be­tween God and the Devil is, which of the two econ­o­mists be­gat by the two an­cient ad­ver­saries were pro­fes­sional or pseudo econ­o­mists? That then leads to an­other ques­tion, What the heck is a pseudo-econ­o­mist? and fu­els fur­ther spec­u­la­tion about whether there are other econ­o­mists who are nei­ther pro­fes­sional nor pseudo.

In think­ing about it, I re­alised that I needed to un­der­stand what ‘eco­nom­ics’ is be­fore try­ing to un­der­stand what econ­o­mists do to dif­fer­en­ti­ate be­tween the pro­fes­sional and the pseudo. Although it is said that eco­nom­ics is the painful elab­o­ra­tion of the ob­vi­ous, there are some things about it that are not.

In fact, the one thing that im­me­di­ately leaps out is that it is the only field in which two peo­ple can share a No­bel Prize for say­ing op­pos­ing things. Specif­i­cally, this was said about Gun­nar Myrdal, a so­cial­ist politi­cian who shared the prize in 1974 with the econ­o­mist Friedrich Hayek, re­put­edly Mar­garet Thatcher’s in­spi­ra­tion. In ad­di­tion to this odd pair­ing, the Fi­nan­cial Times also re­ferred to an­other when Daniel Kah­ne­man shared the 2002 prize with Ver­non Smith. It was said that Smith won the prize for show­ing that eco­nomic the­ory works, while Kah­ne­man won the prize for show­ing that it doesn’t.

THREE TYPES OF ECON­O­MISTS

This am­bi­gu­ity is con­sis­tent with what are re­ferred to as Bent­ley’s Sec­ond Law of Eco­nom­ics, which states, “The only thing more dan­ger­ous than an econ­o­mist is an am­a­teur econ­o­mist” (or is that a “pseudo” econ­o­mist) and Berta’s Fun­da­men­tal Law of Eco­nomic Rents, which in­sists, “The only thing more dan­ger­ous than an am­a­teur econ­o­mist is a pro­fes­sional econ­o­mist.”

It is said that econ­o­mists have ac­cu­rately pre­dicted nine out of the last five re­ces­sions. Ed­die Ge­orge, a for­mer gover­nor of the Bank of Eng­land, quipped, “There are three types of econ­o­mists in the world: those who can count and those who can’t.”

An­other US pres­i­dent, Ron­ald Rea­gan, had his own view of econ­o­mists, claim­ing, “Econ­o­mists are peo­ple who see some­thing work in prac­tice and won­der if it would work in the­ory.” He also used to say that if Triv­ial Pur­suit were de­signed by econ­o­mists, it would have 100 ques­tions and 3,000 an­swers. But per­haps the best an­swer to why God cre­ated an econ­o­mist is to make the weather fore­caster look good.

In T&T, a for­mer prime min­is­ter, Bas­deo Pan­day, was found guilty of defama­tion for call­ing for­mer gov­ern­ment min­is­ter and me­dia mag­nate Ken Gor­don a “pseudo-racist” and or­dered by the court to pay more than US$1mil­lion. So far, none of those ac­cused by Dr Far­rell of be­ing “pseudo econ­o­mists” have taken any le­gal ac­tion in the mat­ter, per­haps be­cause their strong, and pos­si­bly in­flated, self­opin­ions make them all be­lieve that they do not fall into that cat­e­gory, par­tic­u­larly those with doc­tor­ates in the sub­ject or oth­ers who are held in high es­teem by dif­fer­ent gov­ern­ments and the me­dia. They pop up dur­ing the an­nual bud­get show­piece but re­cede into their re­cesses in all but re­ces­sion­ary times.

So, is there any op­tion be­sides pro­fes­sional and pseudo econ­o­mists? Well, you have ‘judo’ econ­o­mists, who fight the sta­tus quo and their col­leagues or com­peti­tors, which are one and the same. They even re­fer to them as ‘pseudo-econ­o­mists’. There are ‘feudo’ econ­o­mists, who carry on bit­ter de­bates and hold grudges for­ever. For ex­am­ple, there is a huge bat­tle go­ing on now be­tween In­dia’s big two econ­o­mists, Jagdish Bhag­wait and Amartya Sen, on how to lift mil­lions out of poverty in In­dia.

Then there are ‘Kudo’ econ­o­mists, those who look for ‘ku­dos’ or praise and will do any­thing to earn them. The worst of all are ‘Freudo’ – they take the econ­omy down a slip­pery slope and they rarely, if ever, give a true ac­count of their mo­ti­va­tion. Thank God and the Devil that all we in the re­gion have are ‘Ludo’ econ­o­mists, for whom ev­ery­thing de­pends on the roll of the dice.

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