We spoke to economist Russ Roberts today about how his views on economics have changed over time. Roberts told us he longer believes that we can find policy answers in empirical data and offered today’s jobs summit as an example:
We have to be honest we don’t really have a good idea of what creates jobs in this particular set of circumstances we’re in. We have some past experiences, but even those which are inevitably what we use to base our studies on, those may not apply in this situation. This particular recession may be unusual it may have assets and aspects that don’t replicate what happened before and therefore the policy answers are not likely to repeat themselves. So I think the whole idea of suggesting that we can a la physics or a la engineering, figure out the solution to the job creation problem, it’s not just we’re going to be off — it’s that whole enterprise is intellectually bankrupt.
It is the difference between economics and biology. In biology, a biologist doesn’t pretend to know how many frogs there are at a particular point in time in the rain forest. He may have an estimate but if you ask him well “how many will there be in six months?”, he can’t give an honest answer about that. He can’t even give you an honest answer and he won’t pretend to give you an honest answer if you ask him well “what will happen in six months if something changes in the rain forest to the frog population?” That’s what we expect of economists and that’s wrong. We’re not good at that.