By Dr. Indradeep Ghosh, Associate Professor & Dean (Faculty), Meghnad Desai Academy of Economics (MDAE)
It is no secret that the general public has tried long and hard to understand economics, and in the process has systematically misunderstood it. Over the years, economics has failed to step out of its principles, theory and political-psychology based thinking that people without adequate training have simply failed to grasp. Due to this unintentional exclusivity that the subject has acquired, people have also increasingly become skeptical of economists, as they believe that the continued economic and socio-political crises affecting the world, in spite of the presence of tonnes of economic research, means that the economic fraternity is not doing its job well.
In order to correct this misunderstanding, however, it is important to understand the nature of economics, which further defines the job of economists. Economics is the science of human behavior as a part of the society. And with any domain of study that involves human behavior or social reality as its fundamental object of investigation, it is not perfectly predictable. Heat up ice and it will change into water. Put a group of labourers in a sticky situation of working without overtime payments, and some might strike, some will keep on working for fear of loss of employment, some might move away, and so forth. The dynamics at play are many and varied.
While this inherent chaos may give rise to instability, it is also the primary reason behind humanity’s continued growth. The ‘human element’ does not submit to a ‘paint-by-numbers’ perspective, rather it continues to surprise economists and throw challenges to the existing understanding of how the world works. However, making sense out of this unpredictability is what economists are needed the most for. Their understanding of the human economic behavior against the backdrop of a specific socio-political way of organizing society is precious to prepare for the future. Particularly in the current world of growing insecurity and instability,economists are needed to ensure the continuous growth and evolution of humanity, but in the most harmonious way possible. In fact, the deteriorating condition of environment has also added another dimension to the problems faced by current economists, as every policy decision today needs to go through the wringer of environmental sustainability.
A common ground needs to be achieved between economists and non-economists to stop this distrust from festering further. This can only be done when non-economists understand the inherent complexity of the economic world and accommodate the economists’ role in trying to make sense out of the disorder. The economists on the other hand, need to make the domain less academic and more matter-of-fact. The popularity of Raghuram Rajan is a fine example of how an academician can be snappy, witty and admired by the masses, just by communicating in a matter-of-fact tone with less academic jargon.
Economists need to focus more on how people think as opposed to measuring the extent to which laypeople fail in their understanding as compared to trained professionals. At the same time, the need for economists needs to be recognized and focused on much more than before, as they surely do a better job of containing the chaos that is human behavior and use the information for the collective benefit of the economy at large. It is after all, much better than the alternative option of allowing the messiness and complicatedness to play out in its full expression, creating a kind of havoc and chaos that could just as well implode society from within.