Perhaps the problem is less economics and more what’s taught about economics at the undergraduate level. Most business and political leaders don’t have more than an undergraduate education in economics, but Microeconomics 101 avoids a game theoretic treatment of the idea of competition. Game theory still makes the assumption of perfect rationality, but it’s still able to model much of the myopic behavior that pulls societies into recessions. And it’s been around for decades. So has behavioral economics. And since the nineties we’ve seen much attempt to model bounded rationality.

But policy makers have and will continue to cherry-pick research that seems to justify what they want to do anyway.

Of course the business world and the academic discipline are connected, and, frankly, that’s probably one reason why this debate is even happening — because straight free market economics is so profitable to teach, there is always going to be the tendency to over teach it (you make a lot more money as an economist than you do as a lit professor, for ex; and it’s a door into the business world as an undergrad). I was connecting the two only insofar as that’s an explanation for why the discipline is powerful and has to be reigned in.

(I’ll point out too just to be hyper-clear: the problem is the monopoly of any discipline, not economics in particular. All disciplines have gross features. It only happens to be that one’s has entered into reflexive equilibrium with the depressing aspects of our culture.)

I began the post by saying that economics as a discipline will change a lot in the next few years. Those posters on campus about behavior economics have indeed “tipped me off.” They validate my claim. They are the signals and features of the sort of change that we’re going to be seeing in the field. That’s a good thing!

Economists are extremely interested in topics such as development, legal institutions, democracy, and cultural impacts on human behavior. If all the posters on campus about cutting edge behavioral economics haven’t tipped you off, economics at Harvard is centered around explaining and locating the effects of behavior ungoverned by “perfect rationality”.

That’s not to say that economics is “enough” as a methodology and that all the other social sciences are irrelevant. After all, I am a social studies concentrator. But I really take issue with this straw-man argument so typical of humanities concentrators who confuse anger about unethical business practices or lack of proper government regulation with a criticism of academic economics.