Liberty Discussion on ‘Don’t Blame Economics, Blame Public Policy’ by Ricardo Hausmann

On 27 September 2019, the members of Liberty Discussion Group sat down at Gaia Restaurant and Coffee Shop to discuss the article ‘Don’t Blame Economics, Blame Public Policy’ by Ricardo Hausmann.

Given the fact, that economists are often blamed for market failures, recession or their inability to make predictions about recessions, Ricardo Hausman’s article seemed to be a good point to start discussing on who should shoulder for world’s ills. Participants who thought that economists should be spared of such blame pointed out that economics is pure science that studies how different variables act and react in different situations, and policymakers can only rely on economics for theoretical guiding, but it doesn’t prescribe solutions to practical problems.

Other participants were against the idea of confining public policy within the domain of economics. Economics is only a part of public policy, which also needs to take other social, cultural and political factors into account. Participants pointed out the multidisciplinary nature of public policy meant that looking at public policy from an economics angle was not sufficient.

Many participants opined that the analogy of physics and engineering may not apply to economics and public policy. This lead to a discussion on whether is economics, as a science, is as reliable as physics. Participants were critical of economics’ the focus on aggregates and quantification of aggregates, based on which public policies are drafted. However, other participants were quick to point out that methods and methodologies of economics are valid and reliable. Moreover, they also pointed out the development of behavioral economics, which takes social and psychological factors into account.

If economics does not warrant any blame, a participant opined that the exclusive character of policy space. Only a limited number of people can influence policymaking and these people often do not listen to policy recommendations given by economists and researchers.

Lastly, one of the participants cautioned against buying the Growth Lab model. Participants doubted the feasibility of training public policy students in a similar manner as medical students.

Although all participants agreed that economists should not be blamed, what other aspects of public policy are responsible for many problems we face. As time was limited, members could not discuss more on these issues even though they desired to. But as always, members can always continue their discussion on the Facebook group.