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Economics, an Uncertain Glory

A Comment on “What Is Wrong with the West’s Economies?” by Edmund Phelps

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Abstract

In What Is Wrong with the West’s Economies, Edmund Phelps adds to the growing self-criticism of economics. He argues that Western economies no longer support “good life” as they are neither inclusive, nor innovative. The “suppression of innovation by vested [corporate] interests” and “repression of potential innovators by families and schools” are responsible for the sorry state of Western economies. He adds that the “failing in the West’s economies is also a failing of [West’s] economics” and calls for “a modern economics that places imagination and creativity at the center of economic life”. I argue that Phelps misdiagnoses the problem. The lack of encouragement to innovation is not the main shortcoming of economics; rather it is a manifestation of deeper problems. Economics can be rejuvenated only when both teachers-cum-researchers and students alike drop their statistical-mathematical glasses and step back into real space and historical time.

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Notes

  1. The phrase “field economics” is borrowed from Frederick Cooper and Randall Packard quoted in Jerven (2013: 89).

  2. Economics also suffers from another language problem, namely, reliance on word games, where metaphors borrowed from markets are used indiscriminately to recast problems so as to render them amenable to economic analysis. See Gomez and Moore (2006) and Ferraro et al. (2005) who discuss how the misleading use of language has facilitated the entry of economics into the fields of religion and management, respectively. We can add education to this list.

  3. About 3 years ago, a landslide caused by monsoon showers stranded me in a remote town near the India-Myanmar border. A young tribal student leader came on his own to see me. Not long after we had started chatting, without any instigation from my side, he lamented that his grandparents were “backward.” He backed up his claims with long list of features of their alleged backwardness including the lack of familiarity with English. The discourse of (under-)development/backwardness has convinced him and millions of others that there is nothing valuable in their societies and has transformed them into passive recipients of ideas generated in some culturally and ecologically distant “advanced” society.

  4. An eclectic reading list that might nudge students to rethink markets and goods would include the likes of Douglas (1990), Buchanan and Vanberg (1991), Gambetta (1994), Rosenbaum (2000), Gomez and Moore (2006), Karpik (2010), Trautmann (2012), and Root (2013).

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Correspondence to Vikas Kumar.

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I am grateful to Manfred Holler and Poonam Mehra for comments on various drafts. The usual disclaimer applies.

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Kumar, V. Economics, an Uncertain Glory. Homo Oecon 33, 321–332 (2016). https://doi.org/10.1007/s41412-016-0018-z

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  • DOI: https://doi.org/10.1007/s41412-016-0018-z

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