Economics as a social science or, more precisely, economists as social scientists, have a lot to answer for in the widespread misunderstanding of the discipline among the general public, the media, and even other social scientists.
Especially on this side of the Atlantic, most academic economists pointedly avoid taking up the mantle of public intellectuals, probably because they regarded it as beneath them, thereby inflicting a double whammy: leaving the door open for practitioners/charlatans (or 'city economists', as they are known) to occupy the public square and failing to engage in the conversation necessary to explain the remarkable successes and the enduring limitations of economics.
This is not a trivial gripe, as a properly informed public would be in a much stronger position to judge the soundness of proposed policies and to assess the value of possible alternatives.
The perfect example of a completely misdirected and possibly misleading sustained attack against 'mainstream economics' can be found in the astonishingly popular writings of Harvard philosopher Michael Sandel. He is no straw man: according to his Harvard website, China Newsweek
regards him as 'the most influential foreign figure of the year' [unspecified], his works have been translated into 27 languages, the BBC has broadcast his The Public Philosopher
programmes on Radio 4, followed by the even more impressively titled The Global Philosopher
He informs us that one of his global lectures in Seoul, South Korea, was attended by 14,000 people in an 'outdoor stadium'. But perhaps his most popular achievement was the worldwide success of the best-selling What Money Can't Buy
. Courted by both the Conservative and the Labour parties, he is definitely the most popular critic of the poverty of economics.
For an economist, reading this book is an eerie experience, similar to witnessing in a court of law a skilled prosecutor forensically demolishing the character of your auntie Beth, besmirching her personality, and belittling her achievements. You start to feel sorry for her, only to realise that you never had an auntie Beth in the first place.
I shall consider one of Sandel's favourite examples of the moral bankruptcy of economics:
Consider the case for a free market in human organs – kidneys, for example. Textbook economic reasoning makes such proposals hard to resist. If a buyer and a seller can agree on a price for a kidney, the deal presumably makes both parties better off. The buyer gets a life‐sustaining organ, and the seller gets enough money to make the sacrifice worthwhile. The deal is economically efficient in the sense that the kidney goes to the person who values it most highly. But this logic is flawed, for two reasons. First, what looks like a free exchange might not be truly voluntary. In practice, the sellers of kidneys would likely consist of impoverished people desperate for money to feed their families or educate their children. Their choice to sell would not really be free, but coerced, in effect, by their desperate condition.
('If I ruled the world', Prospect
, 12 September 2012.)
I have not been able to find a single textbook advocating the trade in kidneys, but even if such a book existed it would prove nothing as economic reasoning ought be to judged by its best examples, not on the basis of elementary textbooks.
Kidney donation is not just a contentious issue debated among economists and philosophers. It is literally a matter of life and death. In 2016, over 100,000 patients were on a kidney transplant waiting list in the USA and over 500,000 on dialysis (an expensive, burdensome, and life-devaluing procedure). In 2016, in Scotland, 179,850 patients aged 18 and over were recorded with Chronic Kidney Disease (stage 3-5) and currently over 400 are waiting for a kidney transplant (with a median waiting time of three and a half years).
Let us examine briefly the relative responsibility of economics and moral philosophy as academic disciplines in the current unsatisfactory state of affairs. A simple calculation reveals that if cadaveric donation were the default option, the kidney shortage would not have arisen in the first place, as the number of kidneys from cadavers is sufficient to provide the vital organ that can prolong and improve the lives of patients with renal failure. The absurd and irrational belief that viable organs cannot be transplanted from dead people to save the lives of fellow humans cannot be ascribed to economists.
In fact, it is an indictment of moral philosophy for its persistent failure to challenge religious superstitions that endow corpses with magical properties. I do not refer to the outright prohibition of any organ donations for Shintoists, Jehovah's Witnesses and Christian Scientists, but to the subtler but not less insidious web of irrational anti-scientific beliefs (the 'soul', the 'afterlife', etc.) that have created and perpetuated the mystique of the inviolable cadaver. [Oddly enough, the only country where the sale of kidneys is legal is the Islamic Republic of Iran, that well-known paradise of hyper-rational free-market economics.]
Sandel's own brand of communitarianism does nothing to free society from the asphyxiating stranglehold of religion on morality. Indeed, Sandel (who believes that 'religion gives a framework for moral enquiry […] and points us to questions beyond the material') advocates precisely the opposite, in so far as he wants to give more space to religion-inspired morality in the public sphere.
Enough about the contribution of moral philosophy to the problem of organ donations. What about economics? Ignoring the vast literature on the economics of organ donation, I shall focus on a single economic theorist who, as the pioneer of the application of game theory to 'optimal matching', was well placed to apply his 'spurious science' (Sandel's definition of economics) to the issue of organ donation. His efforts have been instrumental in changing legislation in the USA so that a game-theory based mechanism of live kidney exchanges is now in place and copied in several other countries (including Scotland).
His highly mathematical model (yielding a unique, efficient, dominant-strategy, incentive-compatible equilibrium, no less) is replete with the kind of 'implausible' assumptions that would make some philosophers have an apoplectic fit. And yet, by applying his model to carefully calibrated economic experiments, he has devised a mechanism for increasing both donor registration and actual transplantation, granting donors priority in the event of needing an organ themselves. A much more substantial contribution, at both a theoretical and practical level, one could argue, than Sandel's.
His name? No, you would not find him cited by Sandel, somewhat curiously, given that Alvin Roth was until recently a colleague of Sandel's at Harvard and not exactly a minor figure, as a recipient of the Nobel Prize in Economics in 2012.
O judgment! thou art fled to brutish beasts. And men have lost their reason. (Julius Caesar
, Mark Antony's eulogy.)
Dr Manfredi La Manna is a Reader in Economics at the University of St Andrews