Professor Ian Goldin, Director of the Oxford Martin School, recently took part in a panel discussion at the Edinburgh International Book festival entitled Can we trust the Economists? Oxford Today caught up with him to find out why he thinks public trust in economics has been eroded — and what can be done about it.
Oxford Today: How has public public mistrust in economists come about?
Ian Goldin: Well, I think that economists are generally regarded with some scepticism, for some reasons which are justified and some which are not. Economists are meant to be the professionals who understand what creates growth, what creates jobs, how we manage pricing of products and services, how to deal with problems like poverty — some of the biggest issues we face. And I think the evidence that people see is that there are problems that economists simply haven’t been able to solve.
OT: But is it fair to blame economists for not being able to solve such complex problems?
IG: It’s a bit like blaming doctors for people still having cancer or dying, I suppose. The idea that a professional can solve a fundamental problem is a little... heroic. Having said that, I think there’s a sense in which economists aren’t very good at solving some problems, but also aren’t very good at communicating why they can’t. That’s why I think the financial crisis has been particularly bad for economists. Part of the reason for the financial crisis — and I believe this is justified — was because economists missed a lot of key issues. Sadly, they then failed to explain why that was the case, too.
OT: So how can economists regain trust?
IG: They need to show a real interest in the world, to show that they believe it’s relevant. The profession has become more conceptual, more divorced from reality, and I think there needs to be a new-found pluralism. Economics needs to be much broader; it needs to consider more tangible issues like institutions and behaviour. They’ve become a fringe part of the field, but they need to become more mainstream. And it also needs to become more humble and intelligible to ordinary people.
OT: And how can economists make their subject more accessible to the public?
IG: The problem is partly generated by the nature of the profession. When a profession requires its practitioners to do well in a degree focussed on mathematics and conceptual models, all divorced from reality, they’re not the kind of people who are interested in the day-to-day. It’s chicken and egg: push a profession to focus on abstract quantitative methods, and you get practitioners who don’t think it’s relevant to communicate. There are, of course, plenty of economists, especially in Oxford, who are intimately involved with policy, who advise governments and banks. But they aren’t the mainstream.
So economists need to talk to the public about the basic underlying principles: about resource allocation, problems with economic growth, unemployment, equity, roles of different actors in society, supply of good and services. The broad themes which define the economy. And they need to be able to at least have questions — if not answers — about how to tackle the big problems.
OT: In the interim period where economists battle to regain trust, what can be done?
IG: I think it’s worth pointing out that public trust in everything is pretty low. You’ve seen opinion polls on trust in government, the clergy, the police — trust in all these things is low. I wouldn’t single out economists as being the least trusted; I think they’re part of a symptomatic story which is that professionals are not really trusted generally. They all suffer from human frailty.
Economists have a particular issue, though, because lots of things people face in their daily lives — like rising house prices or tax increases — are basic economic issues. So explaining what economics is, providing a framework for understanding it, and to be seen as neutral professionals — as opposed to highly political and partisan, as a lot of economists are — is the real challenge.
OT: Is there anything that can be done to make the process easier for economists?
IG: Economic literacy is important. I think teaching economics at school would be useful, for example. Learning about economics, and how it can be used as a tool to understand the real world — I think that would be immensely helpful for all concerned.