ECONOMICS
Since the publication of ‘The Wealth of Nations’ in 1776, economics has gradually separated itself from those disciplines that help the subject to solve not only economic but also social, and political issues.
The subject, which was once concerned with human welfare, transformed into a specialised subject that relies too heavily on mathematical precision. As a result, the core promises of economics, efficient allocation of limited resources, poverty alleviation and economic development, have become difficult to fulfill in the real world.
Every year, economists around the globe conduct numerous studies on various topics and offer novel solutions to problems based on economic theories. Their studies strictly rely on facts, numbers, and big data. They proudly categorise them as quantitative research, which makes them no more than interpretations of numbers. While their mathematically oriented studies ignore social, political, and other aspects of problems. Economic issues are not analysed through the prism of other subjects; universally acknowledged studies held in other disciplines and natural laws are kept at bay. Despite this, their studies receive applause, but they fail to resolve real-world issues.
Economic models work perfectly on paper, but they lack the capacity to be implemented in the real world to benefit society. Political structures and social factors are ignored when running econometric techniques. Man is a rational actor whose behaviour changes for several reasons. When economics is isolated from other disciplines, it fails to capture reality.
Economics is not an ivory tower; it must engage with other disciplines to resolve real-world issues.
Nature works without making distinctions between subjects. Google Scholar offers a large list of publications and studies in which economic issues are attempted to be resolved with purely economic solutions; the social and political aspects of the issues are barely considered. Even if a problem is social or political in nature, economists analyse it solely through an economic lens.
When the time comes to implement an economic policy, implementers face an enigmatic situation. If they try to implement it one way or another, the policy’s negative aspects manifest in different forms. After a long time, economists understand that the economic cost of the policy is far more than its benefits. Some studies are so utopian in the real world and need significant changes for implementation.
An isolated economic study fails to understand the problem through the prisms of political science and sociology. Economists are unable to evaluate the real costs arising from political and social consequences. Basically, a lack of coordination between economists and other subject specialists widens the implementation gap.
Economics as a subject needs to be reorganised. Interdisciplinary debates and coordinated studies on issues are indispensable
Beyond coordination failures with other subjects, economists ignore the basic laws and facts that are clearly defined in other disciplines. Sir Isaac Newton, a brilliant physicist and mathematician, gave his third law of motion: for every action, there is an equal and opposite reaction. Similarly, every policy action generates a reaction; sometimes it causes instability in the system. Equilibrium demands a complementary policy to mitigate the negative consequences and maintain stability. When an economist, while suggesting economic policy, keeps the general principle of physics in his mind, he gives a more robust policy, which will be far better than an isolated theory.
The problem lies in the subject’s structural organisation. University economics departments structure the course of study purely on economic subjects. A little choice or no choice is given to study courses in sociology, political science, or anthropology. Economic modelling is given priority over interdisciplinary studies. Even renowned journals prioritise mathematical methods over real-world relevance. Consequently, a gap emerges between economists and specialists in other
disciplines. Economists
are trained to look at
problems only through the lens of economics.
It is for this reason that the dedicated and intelligent economic policies of international organisations have failed in developing countries. Consequences of the policies are not evaluated from the perspective of other subjects. Sadly, on the basis of such policies, mega development projects are initiated, and they fail to bring improvement.
Economics as a subject needs to be reorganised. Interdisciplinary debates and coordinated studies on issues are indispensable. The consequences of the economic research must be evaluated with other subject specialists before implementation. Relevant stakeholders should be taken on board.
Economics students should study history, political science and sociology. Research findings must be analysed with interdisciplinary teams.
International and domestic institutions sponsor detailed, well-organised studies conducted by economists. The objective is to address the economic problem. They must encourage interdisciplinary study of economic issues to further strengthen the subject and ensure economic progress and development.
Instead of building a larger ivory tower of economics, it is far better to build bridges that connect it with other disciplines. These bridges must be constructed in our classrooms, research institutions, and policymaking departments to mitigate the gap between economics and other subjects. In such a way, economics can fulfill its promises and be able to resolve real-world issues.
Otherwise, the optimal allocation of scarce resources, sustainable economic development and poverty reduction will remain merely unfulfilled promises in economics.
The writer is a scholar at the Pakistan Institute of Development Economics (PIDE).Â