John Kay is one of those rare economists whose views are both understandable and consistently worth listening to. He's just published an article on the failings of modern economics, which is essential reading for anyone who is still wondering why economists don't actually seem very useful in real life. A few sound bites:
"It obviously cannot be inferred that policies that work in Grand Theft Auto are appropriate policies for governments and businesses."
"Economists who assert that the only valid prescriptions in economic policy are logical deductions from complete axiomatic systems take prescriptions from doctors who often know little more about these medicines than that they appear to treat the disease."
"There are, nevertheless, many well paid jobs for economists outside academia. Not, any more, in industrial and commercial companies, which have mostly decided economists are of no use to them. Business economists work in financial institutions, which principally use them to entertain their clients at lunch or advertise their banks in fillers on CNBC."
"Economists – in government agencies as well as universities – were obsessively playing Grand Theft Auto while the world around them was falling apart."
The full article >> The Map is Not the Territory: An Essay on the State of Economics
I think it is true and with even more advanced gaming now on its way, I think it highlights an important point. The bankers and economists are seemingly cut off from reality and live in the society of the spectacle. Ignorance is no longer an excuse for what they have been doing for years. The game is finally up and it is time to face the music.
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