Totalitarianism dressed in Economics garb

The suburban accountant Ross Gittins set of an important conversations this week with his latest opinion piece on economics education in Australia.

Wrote Gittins, in response to an article from an RBA economist, about the declining numbers of economics students in Australia:

But I think I know the biggest reason: the economists have lost the plot. Since not long after the end of World War II, academic economists have been engaged in an all-consuming quest to make their discipline more intellectually “rigorous” by making it more mathematical.

Their concepts of how the economy works must be expressed in algebraic equations, not diagrams of demand and supply curves nor – heaven forfend – mere words.

I hate to say it, as I would disagree with Gittins 999.5 times out of a thousand, but I think he is correct. The mathematicsiation of economics is a problem. I know this first hand because, about 10-15 years ago, I made inquiries into pursing a PhD in economics but was put off with all the required mathematics and statistics.

And so added Gittens:

They must build ever-more “elegant” econometric models of the economy which could at last spit out reliable forecasts of where the economy was headed. Except they’ve proved just as unreliable as economists’ predictions have always been.

But I think that Gittens is only partly correct. Part of the problem with economics education is that it has been taken over by political scientists and the matmathematicsiation is a likely response.

Without going into detail, let’s just say I have studies lots of economics at the university level - without a undertaking a PhD. I won’t claim complete knowledge, but know of what I speak.

Much of what is taught at universities is post hoc rationalisation for governent medling and intervention. Something that was perfectly validated in a follow up email in today’s online/tomorrow’s print AFR. The headline speaks for itself:

Wearing an economics hat, Chae Jeong is making a political argument. Because economics does NOT advocate for compulsion. Economics helps analyse the costs and benefits and tradeoffs from alternative policies.

Writes Jeong:

This must change. Just as history; geography; and personal development, health and physical education are mandatory from years 7 to 10, economics should be as well.

Lesson number 1 in economics is opportunity cost. If economics is to be made compulsory, what is to be taken out of the curriculum? Or if it is just added in to make classroom time longer, what is the cost of this - directly for the schools and education providers, and indirectly for the parents. What too are ofcourse the benefit.

Jeong, rather than discussing the trade offs, marches in like the standard neo-academic caudillo who having lost an argument, determines that force must be used to achieve his desired outcome.

Jeong is not just a poor economist but evidently completely indescrete writing further:

Last year, I worked as an adviser in the economic policy branch at the Department of the Prime Minister and Cabinet. As part of the trade, investment, and geoeconomics team, I saw firsthand the frustration of experienced economists – many former Treasury officials – who opposed Future Made in Australia, the Albanese government’s flagship policy in the 2024-25 budget. Their concerns were dismissed not because they lacked merit, but because economic pragmatism had been sacrificed for political gain. With state and federal elections looming at the time, the government was more focused on winning votes in Queensland than implementing sound economic policy.

What other confidential work tales will he tell.

This is of course the classic technocratic arrogance that brought the word Stalinism and Woodrow Wilsonism and eugenics. Forget democracy. Forget the will of the people. Forget community will and sentiment. Let the technocrats run the show.

Even though I think that the Future Made in Australia policy is wasteful and idiotic, it is the will of the peope as expressed through their elected government. And if the people decide they don’t like it, they can change the government and thus change the policy at the next election.

It is the height of arrogance by this tin pot claiming economics credentias to sail that the poor “experienced economists – many former Treasury officials” were ignored when they should have been obeyed.

Public servants are there to advise and to implement the policies of the elected government. Don’t like it, RESIGN.

How dare he say:

Their concerns were dismissed not because they lacked merit, but because economic pragmatism had been sacrificed for political gain.

Yes. That is correct. We live not in a technocracy but a democracy.

Perhaps Dear Jeong go back to school and actually learn some economics before his next oped.