Economics is not fulfilling its true potential as a science

[Accardo]

There have been lots of reactions about the role of economists to the recent world financial crisis; inflation, food hike, increase of poverty rate etc. I thought about it, when I was reading this story of John Reed as Citicorp CEO from the book "Origin of Wealth", that economists do not efficiently represent the world in times of economic crisis. You can read the story to better understand the thread;

"In 1970, Citicorp, along with other major American bank had lent aggressively to the government of developing countries, in particular to those in latin America. Reed’s predecessor, Walter Wriston, had proclaimed that such lending was “safe banking” be soverign government did not default on their debts. Wriston was proved badly wrong. When in August 1982 the Mexican government was unable to roll over its massive debt This set of a chain of event that resulted global financial crisis. The next several years saw widespread defaults, currency devaluation, and economic collapse in several countries. When the dust settled, millions of poor people found themselves poorer and banks found that $300 billion had evaporated from their balance sheet. Citicorp alone lost $1billion in a year and was sitting on 13billion in bad debts".

Few questions from Reed

Reed wanted to know how it happened? how the crisis had happened? and how it could be prevailed from happening again?  He consulted several experts, involving leading economists from Academic, Wall Street and government. Reed himself was well versed in economics from his student days at MIT. Yet the economists had little new or useful to say about the crisis. In fact reed believed that their recommendation during the crisis had been dead wrong.

Reed wanted a new way of doing things in economics, the old methods doesn't contribute to positive changes.

think of it, a high number of the ideas of the industry or fields are more than 100 years old. Then the economics formal theory and mathematical theory are now handicapped by impractical assumptions or directly contradicted by real world data.

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

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[Iroh]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

Not all economist carry the same view and opinions on how to go about making positive changes in the economy and while they could recommend policies, they actually can’t implement them.

You wouldn’t fault just the economist for failing to contribute sufficiently to curb economic problems in a country and the world at large.
In a country, Representatives in government are the ones who votes on new policies being put forward and they tend to vote more on policies that would put more money in their pockets and that of their already wealthy donors thus constantly increasing the gap between the rich and the poor.

 

[Husires]

Saying something and developing theories is something that implementing them in reality may differ a lot. Reality may give different results to economic perceptions. Therefore, economics provides impact work, monitors indicators and develops them to know whether the impact is successful or needs to be modified, and so on. There is no rigid idea in the economy and all the economies of the world now are not capitalist. Completely or completely communist, and some are a mixture of the two to suit the economic situation of a country, and what may suit this country may not suit the rest of the countries.
The United States is trying to put its people and the US dollar first, so it is taking all measures to make this possible, which may lead to harm to some other countries and peoples, but this does not mean the failure of politics because those countries are not concerned with it.

[Die_empty]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

The world is complex and ever-dynamic. I agree that some of these old economic theories can be applied to solve some present economic problems but cannot handle all of them. New challenges should be handled creatively and innovatively based on the peculiarity of such problems. The problem with economists is that they want to apply the same economic principle to a new problem expecting a positive result.

If you check the history of most of these economic meltdowns that have occurred over the years you will discover that greed is behind more of them. Some of these major banks went bankrupt because of the financial recklessness of the managers. Some of them issued unsecured loans to businesses they have a personal interest in. An example is the economic problem in China which is caused by the slump of the real estate industry. The problem started when banks were giving loans recklessly to real estate companies without considering the consequences. I will be right if I say economists are the problem and they also claim to be the solution. This is why they will always reject Bitcoin because it will reduce the extent of their influence and malpractice.

[Accardo]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

The world is complex and ever-dynamic. I agree that some of these old economic theories can be applied to solve some present economic problems but cannot handle all of them. New challenges should be handled creatively and innovatively based on the peculiarity of such problems. The problem with economists is that they want to apply the same economic principle to a new problem expecting a positive result.

If you check the history of most of these economic meltdowns that have occurred over the years you will discover that greed is behind more of them. Some of these major banks went bankrupt because of the financial recklessness of the managers. Some of them issued unsecured loans to businesses they have a personal interest in. An example is the economic problem in China which is caused by the slump of the real estate industry. The problem started when banks were giving loans recklessly to real estate companies without considering the consequences. I will be right if I say economists are the problem and they also claim to be the solution. This is why they will always reject Bitcoin because it will reduce the extent of their influence and malpractice.

Like the story, you'll notice how Wriston trusted the people he lent money and didn't worry about the possibility of loan defaults. Time and problems are different, similarly, solutions should be unique according to the current problem. Optimizing the old theories to fit their personal greed, is a waste of resources, which effect affects the society. The less privilege will suffer more and companies will see losses because the allocated loans are not utilized proficiently to yield returns to the bank. The intriguing aspect of it, is that these economists occupy the top of financial institutions. And all these happen at their watch, yet they can't solve the problem they create. Contrarily, similar things happen in cryptocurrency projects, exchanges and some defi projects lend huge amount to different start ups whose management isn't capable or eligible to meet up the standard of replenishing the borrowed funds. Thereby causing a crash on the lending project, and affecting other customers and businesses linked to the Lending project.

[Alpha Marine]

First of all, the economists are not the ones that implement the rules. They just advise and give their own professional opinion, it's left to the people with real power to effect change.
I remember a certain time in my country when economic and financial bodies were stressing that we were heading into a recession at this rate, no nobody listened. The people in government just kept on with their daily lives as if nothing would happen. IMF even made warnings. They told the central bank many times to take caution but nobody listened till we went into recession.
So how do these economists stop economic meltdown when people don't listen to them or take them seriously?
Some climatologists have been singing about climate change for a long time but nobody takes them seriously. Would you blame them for the natural disasters and hazards we face because they refused to listen?

Another thing is Economics is not a pure science. The theories don't give the same result everywhere at all times.
Chorine turns litmus paper white anywhere, but an economic theory needs certain factors to give certain results.
An economic or financial theory or system that worked in an Urban area might not work in a rural area.

[Accardo]

So how do these economists stop economic meltdown when people don't listen to them or take them seriously?

Valid points, but things do not just begin, something led to why the Government doesn't listen to them. If after their warnings, the economic meltdown occurs, and the Government runs to them for solution, they don't come up with great solutions. Such things can as well demoralize the Government from adhering to their further warnings and advise. If they worked effectively to repair the underlying problems, which the Government or banks may need their assistance, a lot complaints about the less important theories.

Another thing is Economics is not a pure science. The theories don't give the same result everywhere at all times.
Chorine turns litmus paper white anywhere, but an economic theory needs certain factors to give certain results.
An economic or financial theory or system that worked in an Urban area might not work in a rural area.

yeah, that's right, the only solution about the diversity of economic behavior according to locations, is by understanding the economic data of different zones, then use them to tackle financial problem that can arise in future. It all begins with making and enforcing the right decision.

[tjtonmoy]

The world is growing fast and so is everything around us. The economy is evolving as well. For this reason, old methods may not work as we as they did in the past. Imagine people doing farming work in the past and earning while contributing to the economy. Now you can earn just by sitting in your room. The way of earning has changed so has the economy. Analyzing the data from the present will never be similar to the data from the past. So we will need new ways to deal with new problems.

Some old methods still might work, but that won't be perfect. You are limited to experiencing things that happen around you. You can also gain knowledge by researching other places, but still, you can not know everything. People may be able to solve many economic crises on a small scale but to do it worldwide, that's a tricky job. Because not everyone thinks the same way. Different people have different goals and motives. So even if economists are able to bring out a solution, not everyone will be able to follow that or not follow it intentionally. So it all comes to every individual. We have to think about ourselves. We need to help ourselves to secure our personal economy. That way it will help the country and others which will help the world economy.

[hyudien]

Reed wanted a new way of doing things in economics, the old methods doesn't contribute to positive changes.

think of it, a high number of the ideas of the industry or fields are more than 100 years old. Then the economics formal theory and mathematical theory are now handicapped by impractical assumptions or directly contradicted by real world data.

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

Every economic theory has a period and period of time to be implemented. But that doesn't mean it doesn't provide positive value. It depends on the economic system adopted according to the goals you want to build. Economists put forward theories based on observed facts so that solution after solution is born. If we don't know the history of the economic role of each country, the place we live in might not be freedom until now. The crisis is not meant to be stopped immediately, but rather to minimize the possibility. Look at the crisis period that has been experienced, we have evolved to be able to repair a broken system. In the case of practitioners, the solution will not completely disappear. The crisis arises over time, so it must be resolved gradually.

[so98nn]

This is what happens when our government starts fooling us with a Trojan horse. On the outer side, it is always looking good but inside it is just a crooked economy that they have built. I think it is like they are showing us everything is very normal, we have enough credits, loans are running perfectly, and prices for day-to-day life things are in line but it's nothing like that. The thing is, it doesn't matter if they are studying the economy properly or not, there is a whole bunch of corrupt government authorities that will run everything for their own benefit and nothing else. Even if there is a way to overcome things easily they would not start implying those solutions immediately because that would be dangerous for their profits. They will let the chaos happen, use the stones to throw when elections are at the doorstep, and then start recovering things. I never understand why it is the highly developed countries with the best minds that are getting the worst hit if they can overcome everything in a year or so. Isn't it tricky?

[dothebeats]

First, not all economists have the same ideas and theories that they all simultaneously follow, you'll be surprised at how much these people clash with their ideas and have such lengthy arguments about it (I remember watching two economists being interviewed and they just started a debate out of nowhere that lasts for more than an hour, it was crazy). Moreover, laying out ideas, knowledge, plans, and theories is different from implementing them, believe me when I say that implementation is the hardest part of any project or action, I'm sure a lot of people will agree on that. Besides economist are just mostly sharing their knowledge and professional take on things because that is what they studied, the implementation is not up to them at all.

[Cryptomultiplier]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

All they can do is speculate or predict or project, but to implement is more the work of the government and a willingness on the part of the government.

The economy of a country or state is a direct correlation of the decisions the CBN of the state makes.
 A good economist like Dr Okonjo Iweala, who is the director general of world trade organization and one time minister of finance in Nigeria may  have done well to provide a good financial service to the nation in terms of her knowledge, application and models she set in place before exiting office and landing a big financial role of director general.

I think it is not all in one bracket to say economists are not fulfilling the true potential of it as a science. Good economist know what and how to go about it. The ones who have no idea just blab and state theories that are outdated.

[icalical]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufyficiently to control or stop world economic meltdown? 

No, they can't just fix the economy by knowing how to fix it, they don't have the power and resources. Fixing a macro economic problem required huge political power and resources, even in a scale of a country, let alone a global economy. Just like all those scientist, both Economist and Scientist can only make a suggestion and expert analysis on the matter, they still need to push government and people who has the political power to actually execute a possible solution.

[fuguebtc]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

If even a giant organization like the government cannot prevent a crisis, then what are those economists? You need to remember one more thing, they are talented, they have great research works but that does not mean they know everything in this world and can solve all problems.

I am sure that even when you are having difficulties in life and you go to financial advisors. They can't even guarantee that they'll get you out of trouble, let alone a country's economy. What they can only give you are the ideas they learned from books and whether it will help you succeed or not, they themselves don't know anything.

[Rruchi man]

Career courses should be able to shape the thinking and improve the problem finding ability of the people who study it. They should be able to find solutions to challenges with the principles of what they have studied and expand the solutions that they can offer far outside what has been documented in their old textbooks. The problems found in those textbooks, are problems that solution has been found for, it does not contain all the future problems like some of the problems facing the economy these days, and there is no solution for it, just principles to guide thinking to create solutions for this new problems.

Reed wanted a new way of doing things in economics, the old methods doesn't contribute to positive changes.

Some economist are masters of the theoretical, they are not good at thinking outside the boundary of what they have learnt  and within the principles guiding their course to find new practical and applicable solutions, so the old methods that they know yield no positive results and are not helpful.

[Juse14]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

Sometimes the theories and views of economists do not match what is happening in the field. They are drafters, not implementers.
Those who can change the economy are those who are directly involved in the economy who do not only rely on theory but they also rely on the experience they have gained in dealing with economic problems. Those who have been involved in economics for a long time and have sufficient experience tend to work tactically and sometimes don't care about theory.

[khiholangkang]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

Sometimes the theories and views of economists do not match what is happening in the field. They are drafters, not implementers.
Those who can change the economy are those who are directly involved in the economy who do not only rely on theory but they also rely on the experience they have gained in dealing with economic problems. Those who have been involved in economics for a long time and have sufficient experience tend to work tactically and sometimes don't care about theory.

Yes, I know that people who have tactical behavior are able to solve every problem directly in the field without requiring long, complex planning and discussions to make decisions to solve problems. But again, this depends on the problem, sometimes to solve a problem you need a theory to solve it and this needs to be formulated and considered carefully.

You need to know that when someone is involved in the world of economics and has a lot of experience, they work tactically, but in their brain they already have a formulated road map to take and that is the theory they got from their experience.

What OP said about the discussion on how to stop the world economic crisis, I think it is very heavy and quite broad in scope, because talking about economics, there are many connections, such as currency, politics, policy, trade, cooperation, and many more that can influence economic crisis, so naturally they (the experts OP mentioned) don't say much.

[Unbunplease]

Sometimes the theories and views of economists do not match what is happening in the field. They are drafters, not implementers.
Those who can change the economy are those who are directly involved in the economy who do not only rely on theory but they also rely on the experience they have gained in dealing with economic problems. Those who have been involved in economics for a long time and have sufficient experience tend to work tactically and sometimes don't care about theory.

Theory is often at odds with practice, it's true. But without theory, it is difficult to achieve much ecocnomic success. Understanding of economic cycles and interrelationships helps to conduct more complete analysis and make more accurate forecasts of the development of the situation

[BIT-BENDER]

What do you think about economists, who study the theories of economics and brag about being vast in the study of economics, yet doesn't help or contribute sufficiently to control or stop world economic meltdown?  

Economist can only do the much they can do. There is no world order yet so every country is in charge of their economy, and the head of the country makes the hard decision many of which are motivated by the advice he gets from those that surrounds him.

The government appointments individuals to advice them in various sector and if they gave the economy role to a substandard individual then the country may not grow. The countries with good economy worked for it starting from the government economy enhancing plans and programs and also their relationship with the human resources the country has.

[palle11]

Reed wanted a new way of doing things in economics, the old methods doesn't contribute to positive changes.

Maybe a new way of doing things may take note of the new infiltrations in the system which now bring about the modern economy that needs to be study and solutions provided. The old methods should have kept providing and contributing to positive change but it is yet to accommodate the new models which is now the realities of life because in the past, certain circumstances never was occurring like it is today. Certain factors can be responsible to divert the economic policies of government like war, COVID-19 to date is a major set back in country's economy as budgets for economic projects were used to fight COVID-19 pandemic, to execute different wars, terrorism compacting etc which were very minimal in the past. Therefore, those have to be considered to see the reason old mettod doesn't contribute to positive change anymore.