Is Economics 'The Biggest Fraud Ever Perpetrated on the World?'

How a Twitter diatribe turned into an article in one of the world's most prestigious journals
Reuters

Twitter: Things happen there. As Twitter (the company) prepares for its initial public offering on Thursday, this is the pitch it’s made to investors and new users alike. Shaq has a Twitter! So does the President! One time, Senator Cory Booker even zinged a follower!

Maybe Twitter’s right, that these “moments” constitute part of what makes Twitter (the service) fun for its users. (Though I think the service’s popularity has more to do with its friendly normals.)

But maybe another kind of exchange can occur: Something a little more formal, a little more academic. Maybe the company should add to its list of famous firsts an episode which ended last month, when one of the world’s most prestigious medical journals ran a rebuttal... to a tweet.

Or to a series of tweets, actually. The story begins on New Year’s Eve, 2012. Richard Horton, editor of the British medical review The Lancet, was especially frustrated how he was hearing economists talk about the world. So he sat down, pulled out his iPad, and sent a stream of angry tweets:

(You can skip past these tweets, but they are interesting.) 

This full-on disciplinary assault was too much for three professional economists. One immediately shot back (on Twitter): “only ten misconceptions about economics Richard? No score for effort or insight!” And, in October, they had a larger opportunity to respond in The Lancet itself, the very publication that Horton edits. Their trolling rebuttal, Economics: the biggest fraud ever perpetrated on the world?”, appeared in that journal’s print edition last month. Its authors allege, with stylish restraint:

An informed critique of economics and its practitioners should be welcomed as a means to improve the discipline, but these comments seem to demonstrate a poor understanding…

 

The authors—David Parkin, John Appleby, and Alan Maynard—somewhat improvise their way to a structure. They begin to address the points—and the tweets—one by one. Sometimes they reject them outright:

The first two tweets are more an introduction than a cogent set of criticisms. Economics is, apparently, a “fraud”, and offers a “false promise”. There is no evidence given to support these assertions, so we cannot answer the case.

And sometimes they add more nuance:

Prices and souls: “The essence of economics is price. For those in health who argue for access free at point of delivery, we kill the soul of the economist.” Economists have indeed made a special study of the role of price in resource allocation. Prices are a financial incentive that affect how people behave in the supply or consumption of goods and services. However, economists also recognise that the use of a price mechanism is just one way to ration goods. There are many other ways, such as distribution according to needs, waiting times, or on a first-come-first-served basis. If a society—as in the UK— decides that another way of rationing better satisfies its aims (such as equal access to health care for equal need), there is no economic theory that suggests it is wrong.

They also argue that economics has as much of a soul as any other science: Physics, biology, and chemistry, they intone, have all invented weapons of mass destruction of their own. And, parroting the French entertainer Maurice Chevalier, they conclude with a sigh common to defenses of their discipline: “Well, there is quite a lot I don’t like about it, but it’s not so bad when you consider the alternative!”

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Robinson Meyer is an associate editor at The Atlantic, where he covers technology.

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