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
- Economics is a collection of models; cherish their diversity.
- It’s a model, not the model.
- 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.
- Unrealistic assumptions are OK; unrealistic critical assumptions are not OK.
- The world is (almost) always second best.
- To map a model to the real world you need explicit empirical diagnostics, which is more craft than science.
- Do not confuse agreement among economists for certainty about how the world works.
- It’s OK to say ‘I don’t know’ when asked about the economy or policy.
- Efficiency is not everything.
- Substituting your values for the public’s is an abuse of your expertise.
Ten commandments for non-economists
- Economics is a collection of models with no predetermined conclusions; reject any arguments otherwise.
- Do not criticise an economist’s model because of its assumptions; ask how the results would change if certain problematic assumptions were more realistic.
- Analysis requires simplicity; beware of incoherence that passes itself off as complexity.
- Do not let maths scare you; economists use maths not because they’re smart, but because they’re not smart enough.
- When an economist makes a recommendation, ask what makes him/her sure the underlying model applies to the case at hand.
- When an economist uses the term ‘economic welfare’, ask what s/he means by it.
- Beware that an economist may speak differently in public than in the seminar room.
- Economists don’t (all) worship markets, but they know better how they work than you do.
- If you think all economists think alike, attend one of their seminars.
- If you think economists are especially rude to noneconomists, attend one of their seminars.