The Twenty Commandments

charlton-heston-as-moses-from-the-ten-commandments-1956

In these uncertain times….scrap that, all times are uncertain. In these turbulent times, when economics and the social sciences have taken a pounding due to their inability to adequately predict the future or designate risk, it is useful to remember Dani Rodrik’s Twenty Commandments from his book Economics Rules: The Rights and Wrongs of the Dismal Science:

Ten commandments for economists

  1. Economics is a collection of models; cherish their diversity.
  2. It’s a model, not the model.
  3. Make your model simple enough to isolate specific causes and how theyr work, but not so simple that it leaves out key interactions among causes.
  4. Unrealistic assumptions are OK; unrealistic critical assumptions are not OK.
  5. The world is (almost) always second best.
  6. To map a model to the real world you need explicit empirical diagnostics, which is more craft than science.
  7. Do not confuse agreement among economists for certainty about how the world works.
  8. It’s OK to say ‘I don’t know’ when asked about the economy or policy.
  9. Efficiency is not everything.
  10. Substituting your values for the public’s is an abuse of your expertise.

Ten commandments for non-economists

  1. Economics is a collection of models with no predetermined conclusions; reject any arguments otherwise.
  2. Do not criticise an economist’s model because of its assumptions; ask how the results would change if certain problematic assumptions were more realistic.
  3. Analysis requires simplicity; beware of incoherence that passes itself off as complexity.
  4.  Do not let maths scare you; economists use maths not because they’re smart, but because they’re not smart enough.
  5. When an economist makes a recommendation, ask what makes him/her sure the underlying model applies to the case at hand.
  6. When an economist uses the term ‘economic welfare’, ask what s/he means by it.
  7. Beware that an economist may speak differently in public than in the seminar room.
  8. Economists don’t (all) worship markets, but they know better how they work than you do.
  9. If you think all economists think alike, attend one of their seminars.
  10. If you think economists are especially rude to noneconomists, attend one of their seminars.
dani-rodrik13
Rodrik is likely to become much more popular as demand for understanding the tensions that come from globalization rises.

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s