How Economists Cause Harm (Even as They Aspire to Do Good)

Why do economists avoid ethics, and over-simplify harm? George F. DeMartino (‪@uofdenver‬) dives into the work behind his new book "The Tragic Science" and how economics can do better.
Learn more: georgedemartin...
ABOUT THE BOOK
A forceful critique of the social science that has ruled-and damaged-the modern world.
The practice of economics, as economists will tell you, is a powerful force for good. Economists are the guardians of the world’s economies and financial systems. The applications of economic theory can alleviate poverty, reduce disease, and promote sustainability.
While this narrative has been successfully propagated by economists, it belies a more challenging truth: economic interventions, including those economists deem successful, also cause harm. Sometimes the harm is manageable and short-lived. But just as often the harm is deep, enduring, and even irreparable. And too often the harm falls on those least able to survive it.
In The Tragic Science, George F. DeMartino says what economists have too long repressed: that economists do great harm even as they aspire to do good. Economist-induced harm, DeMartino shows, results in part from economists’ “irreparable ignorance”-from the fact that they know far less than they tend to believe they know-and from disciplinary training that treats the human tolls of economic policies and interventions as simply the costs of promoting social betterment. DeMartino details the complicated nature of economic harm, explores economists’ frequent failure to recognize it, and makes a sobering case for professional humility and for genuine respect for those who stand to be harmed by economists’ practice.
At a moment in history when the economics profession holds enormous power, DeMartino’s work demonstrates the downside of its influence and the responsibility facing those who practice the tragic science.
‪@universityofchicagopress958‬

[@cben86]

I have a degree in economics and agree with the issues raised in this video. I look forward to reading this book.

[@rcmrcm3370]

That's really sad, I feel for you.

[@paranadasimple7087]

Neoclassical economics is nothing but an idealization of capitalism. The whole concept of perfect competition, rational choice, utily maximizers are justified to pretend capitalism is the best system ever. If you really want to understand economics, we need to go back to the clasics, Smith, Ricardo, Marx

[@alannajohnston3452]

I also have a degree in economics and I wouldn't read this book if you paid me to do so! I have a personal code of ethics, as a Stoic. I'm not the type of person this guy is speaking about. He's talking about politicians, who have not ethical system, imo. My personal ethics are enough to keep me from EVER causing harm.

[@alexeylozovoy3549]

The

[@SlickSimulacrum]

@@alannajohnston3452 , As an ideologue of ridiculous arrogance, you are almost certainly a part of the problem. Grow up and get aa more dynamic comprehension of reality. Your "babies first ideology" diatribe is laughable.

[@Sociology_Tube]

I am a sociologist with a PhD and you are the first economist I can truly and fully respect: you're not one of the criminal hitmen of capitalism, you are an ethical man.

[@Chathuranga_CA]

Thank you soo much, im from SriLanka now in the bottom eleven countries in the world, it is an immense task to convince "Educated" about the true issues about the worng approaches for development. Wish these knowledge is in our native language, Will try my best to make such public.. thank you again

[@robertspeed6200]

In dealing with our HOA, I have found that the problem with the "Stakeholders" approach to problem solving is that certain individuals place their short term personal profit above the general health long term of the group. We are dealing with a situation where certain owners are placing the ability to collect rent or sell their unit above public safety. In a vote of the ownership, public safety will be cast aside in favor of personal profit. There has to be a balance between the two.

[@thomasbentele2468]

That balance should be provided by the law and by the democracy. That works less well with our increasing corruption and revolving doors.

[@vg7985]

Our HOA solution - no rentals. Occupied by owner only. Written in our bylaws.

[@Zero11_ss]

HOA = Suburban Tyranny

[@HistoricalPerspectiveRBr]

Shifting the subject slightly, history has an enormous, almost incalculable, effect on our lives, but studying it (which is what historians do) largely doesn't. There is a slippage at work here - the economy is hugely important, and we do in fact police it with moral and ethical rules (albeit nowhere near as well as most people would like), but economists don't. At 10.00 it gets interesting because the topic moves to advocacy and maybe that should have an ethical component, but it still operates from an assumption that policy makers do things because economists tell them to (which is nonsense, policy makers do what they want to do, and if they cannot find an economist who tells them it is the right thing they'll just find somebody who isn't an economist). But I think that is the interesting thread which is picked back up at 15:40. It would be better to focus on that.

[@VGSpeedPro]

From a non-economist person, I agree with the intention of these set of ideas, sounds better then what we have. My only doubt is this: how you would manage to keep the stockholders on equal footing (power wise)? I know, that in principle, all would be fighting for the same ultimate end-game, but we also know that the nature of people in power is to take advantage of everything they can for themselves and the people they represent, and I am pretty sure that would happen here. His example about RAND is a good one, because they mainly work for who pays them their paycheck and how to give all the advantage/power to that (those) entity(ies). Just go read the one they did on how to collapse Russia for the DOD in 2019.

[@Avianthro]

Reality is that economics is far from being a hard science and is trying to deal with extremely complex (manifold variables) with often highly non-linear feedback loops in open systems...it's just damn near impossible to do hard science in that kind of situation, except under very limited conditions that rarely exist in the real world. Every economist just winds up being a guesser using an unproven theory. Sometimes they may get a few things right at the macro level over the short term, rather like meteorologists who often do pretty well at the macro weather forecast (for a region of thousands of square miles) and over a time frame out to maybe 2-3 days. They can tell you it's likely to rain and about how much within that region, but they cannot tell you if it's for sure going to rain at your house and how much. Some of them are just using modern "weather ropes", like radar and satellites, that can tell you a storm is on its way only after it's already formed. Also, it's really hard to assess whether the following of an economist's advice was a wise thing or not...depends on what you measure to assess that and when you measure. So, how can you really credit or blame an economist for anything when they don't even have a science by which one can judge them? The thing is that they shouldn't even be taken too seriously as if they are hard scientists, and we who do take them seriously are fools...like someone who trusts a totally uneducated-inexperienced person claiming to be an civil engineer (BTW, that's a hard science) to design and build a skyscraper and then blaming him when the thing falls down...Yes, it's his fault but every bit as much our own as well. Confucius said, "True knowledge is this: If you know something, admit that you know it. if you don't, admit that you don't." Economists should simply admit that they don't know except when they are making a simple prediction or policy with obviously very limited error possibility, and even then they should admit to their uncertainty. That would be ethical enough for me.

[@thomasbentele2468]

Very true. Sometimes they are used as political scientists to influence the public opinion and by that the economic outcome. In such engagements, they can never say that they only speculate, or fabricated blatant false studies .

[@smithjohnsonwilliams]

An Economist saying "I don't know"? Great joke hahaha

[@vg7985]

For last few decades I believed that best models for economic predictions should come from meteorological like models, models that are based on chaos theory. You know.. butterfly effect and so on. I always thought that most economic models are just plain stupid.

[@Avianthro]

@@vg7985 Yes, that's a good idea and I'm pretty sure some economists have already does some work-research in that direction. The thing is that it wouldn't be any better than our weather models are, and would likely still be even worse. Remember too that chaos theory is just that: a theory that shows us how highly nonlinear systems can behave, but it doesn't really give any predictive ability. It can tell you a great many possibilities as to what may happen but cannot tell you which one is actually going to happen. Even with a better mathematical model, perhaps with some nonlinear "chaos theory" added, the big problems remain: Too many variables, especially human ones, not measurable at high enough spatio-temporal density and accuracy and an open system subject to unpredictable factors-influences from outside, not like doing chemistry in a closed and sealed laboratory, but like doing it outdoors in all kinds of weather, and with animals, contaminant chemicals, etc. that can totally ruin your experiments.

[@Zero11_ss]

@@smithjohnsonwilliams I took an economics class in college and the guy told us if we don't know just make it something about being "on the margin" as that answer will fit and be correct most times. It wasn't my major.

[@rifelaw]

Let's be honest, it doesn't end well when people without math skills (e.g. Reinhart, Rogoff, and every econ prof I ever had) pretend to do math while pretending to do science.

[@thomasbentele2468]

They have to deliver the outcome, the Money masters like. Play for pay.

[@vg7985]

I think it's a concept, not math problem. When you have faulty theory, math won't fix it, but will make it worse. In general, I believe that economists should rather apply laws of physics, not pure math in their calculations.

[@emmanuelameyaw9735]

​@@vg7985 Economics is not physics. Economics has their own laws and theories.

[@vg7985]

@@emmanuelameyaw9735 if you look closer, you’ll be surprised how many economic and social models are based on theories of physics. For example, conversion model in economics is based on catastrophe model in physics, which explains how explosion occurs. Or loss of energy in physical model is very similar to entropy in economical models.

[@strech5412]

Thanks for work here! Strongly advise you see the work of Frank Barrett, Prof of Business Organization at the Navy’s Postgraduate School Monterey, he studied Jazz vs Symphony organization methods, his book Yes To The Mess says very much the same message as this video, ten years ago.

[@MarkDemarest]

BRILLIANT talk. 🙌 Thank you. 💪 #OneToFollow 🔥 Will be buying his book! 🧠

[@MikeRLloyd73]

Engle's called it "social murder"...what harm from policy on those within oursociety well over 100 years ago : 8:40

[@realKytra]

Great talk!

[@flow963]

Excellent. Thought provoking. Gracias iNET.

[@stevenmeyer8211]

Flapdoodle! DeMartino is delusional. Economists do NOT have that much power. Their job is to provide a rationalisation for what people with real power want to do anyway. Economics is nothing more than the contemporary equivalent of "Divine Right of Kings" theology.

[@tuckerbugeater]

Economists can make recommendations that kill millions of people. But the blame can't be easily traced back to them. Economists are just a small part of a complex adaptive network anyways.

[@stevenmeyer8211]

@@tuckerbugeater They can make recommendations. But only those recommendations that profit people with power will be implemented.

[@thomasbentele2468]

So true. And most "alternative" economists only lead the people to the other edge (communism f.ex.) of the scissors, with what the elites cut the wealth from the middle class, to better control the society.

[@NewEconomicThinking]

Those "recommendations that profit people with power" are often the dangerous ones. They have also created a feedback loop in the discipline that shapes it into service of power, rather than the people.

[@vg7985]

The whole world , but few exceptions now days is build on the neoliberal economic theory. Are you saying it's not powerful but enough force?

[@walterdoti4107]

He talks about the need to face the complexity of social issues and then defines welfare state as simple as a politics consisting in a monetary compensation for people who can't afford an economic challenge (like paying for the healthcare of a son). Well, this is what I call a actual simplification. Because under the welfare system medical charges are cover by the State. And in that case you won't need any retribution from anyone. Given the fact that future is uncertain, wouldn't it be more intelligent to think that the government has to help people, instead of charge individuals with the responsability for their luck in life? The paternalistic argument is a very cinical euphemism to convince people that avoid helping them is a moral decision.

[@rcmrcm3370]

Yep, I hear a Post Hock justification for doing nothing. A literal "life is priceless".

[@thomasbentele2468]

One has to admit, that healthcare is not static. Every day, there comes more extremely expensive treatments into the health industries and its difficult to say, that everybody has to get even the most expensive therapies, because of the simple fact, that socialists whenever they tried, ran out of other peoples money. Thats like this even in welfare states like Germany, where I live. We have a public insurance system where we are forced pay up to 800 Euro a month. The health burocracy decides, what's the standard therapy. Then we have to wait months for an audience at a doctor and more for a clinic. If you want more or better or quicker, you should in addition insure privately. Only very high earners are allowed leave the public insurance. Completely unconditional is health care in Germany only for African and arab immigrants.

[@vg7985]

I don't think you understood him. He's arguing against this concept.

[@tomofnorthcal]

Yes we need ethics in economics but not just from one sided upper income and higher educated people. To be fair you need to consult with lower income and lower educated people. They are smarter than you think.

[@thomasbentele2468]

First thought: Stakeholder, nice word for communism and central planing and big, privatised? (world ) gouvernement as the Schwabians of Davos prefer. May be im wrong, but don't think so. Where is the word Republic and direct/representative Democracy by a fully informed citizenry to find here. What I don't understand is his view, that ethics where never intergrated in economics, when it was Adam Smith himself, who considered his "Wealth Of Nations" not to be his best writing, and wished very much to enter history with his other great book, that deals with ethics.

[@realdanrusso]

the critiques you're making sound straight out of neoliberal theory. .'economics eschews totality. welfare and economic intervention therefore irrational'

[@grayarcana]

Political economy ought to be the business of liberally educated philosophers, fit to counsel Princes or the Principal officers of a Republic. Economics ought properly to be a faculty of Cost and Management accountancy in the service of private interests, or, at most, the service of corporations chartered and charged with the management of certain public services.

[@fyimediaworld]

The problem with economists is not so much that they need an ethics board, it's that they think the economy is a natural phenomena, and they are in denial of the fact that economies are nothing more than societal constructs. So they treat economic events as though they are unavoidable, and humanity is at its mercy, like a vulcano. So we're all convinced that we are helpless to do anything, when in fact we have all the power.

[@stevenmeyer8211]

If economists were serious the introductory course would start with game theory and how to play poker.

[@vg7985]

Absolutely not, unless your economy is stock market and Wallstreet.

[@stevenmeyer8211]

@@vg7985 You cannot understand the behaviour of large corporations without understanding game theory. It's how oligopolies and oligopsonies rig markets.

[@vg7985]

True, but it's not introductory course of economics, more like advanced. I learned game theory at uni. We're solving some diet balancing model for practice. I was like 20 and was totally bored. I started understanding its application much later in life. Unless you're majoring in mathematical modeling straight from high school, it would not provide much value. This video pretty much tells that mathematical games with numbers without good understanding of underlying factors can produce distrourous results.

[@paranadasimple7087]

What? If anything game theory does NOT map to human behavior. You really think we only operate on utility/reward and risk? Hell no, there is culture, speculation, even religion that impacts how firms and consumers operate. Also firms cannot rig the market, what you call oligopolies are just large scale firms that need to be big because they know it's a mechanism to survive. But it doesn't follow that they will always be. Big coporationa fail all the time even when they seem to have more than 70 % of market share. Competition is ruthless, profit atracts players from all sectors. But we think that competition should be unlimited small players (neoclassical economics) and that does not address reality.

[@renatlottiepilled]

wow, welfare is bad, great ethical thought, not at all subservient to the powers that be

[@DC-wg1cr]

Guy just calls for popular economics and cooperative responsibility but leaves out collective ownership

[@TomTerrific1000]

More economic babble. We can't know the future, but we still have to know the future. The kinds of sensitivity analysis he's describing has long ago been developed in Engineering. Give up on Economics and do Engineering.

[@sourabhbhattacharya3411]

Surprised...

[@wangzijie9240]

Wasting time and life guy 😅