Beyond pseudo-scientistsSince the 2008 global financial meltdown, many policies were implemented but the economy is still in crisis. Structural problems such as a widening gap in income distribution, a low birth rate and aging society are serious issues. Economists have failed to present proper solutions.
Economists are well-treated in various sectors. There are many demands for economists in economics-related ministries, the central bank and research institutes. The Constitution stipulates that the president have a National Economic Advisory Council for economic policy recommendations. The media sometimes profiles economic tutors of presidential candidates. Because there are not normally reports about political, social and science tutors for the president, economists seem to be special.
But there is criticism that economists are popular not because they assess reality accurately and present proper resolutions, but because they present answers that powerful people want to hear. As economics has no fixed laws — as opposed to natural sciences — it comes with various policy recommendations. For example, there are many theories on how much an economy will be stimulated by increasing government spending. Depending on the details of the expenditure and household conditions, the effectiveness of a policy can vary. It is also hard to have an accurate prediction of the effectiveness of policies on interest rate cuts, corporate tax hikes and regulation of conglomerates.
Some economists present unverified policies by selecting economic theories with certain ideologies to satisfy politicians. Some defend the government policies and conglomerates and become outside directors for public companies and business groups. Some do not hesitate to argue that one policy will change the world.
And many of them are often pseudo-specialists. They win admiration and praise from the people and enjoy satisfactory lives by being something like secular priests. They, however, are not dedicated to virtue.
Pseudo-economists often distort and exaggerate economic theories. Cold medicines sold at drug stores come with a warning that patients must be careful of adverse effects and take the pills as prescribed. But a cure-all peddled by a pseudo-economist comes with no warnings.
Excellent economists work for universities, but they pay little attention to the real economy. Their priority is publishing meticulous theories and papers using foreign data in foreign academic journals. It is hard to publish research using Korean data in a renowned international journal. It is also hard to obtain raw data for research from a public office in Korea. Although state-run institutes conduct research on the Korean economy, it is hard for them to carry out neutral, long-term research uninfluenced by government ministries and the National Research Council for Economics, Humanities and Social Sciences, which pays the bills.
It is not just in Korea that economists have failed to play a proper role. John Maynard Keynes, the most renowned economist of the 20th century, said, “If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid.”
John Kenneth Galbraith, the author of “The Age of Uncertainty,” said, “Economics is extremely useful as a form of employment for economists.”
Although economists often make wrong forecasts and fail to present effective resolutions for a crisis, economics is still useful. According to the Economist magazine, big ideas in economics are still very useful in assessing realities. It gave six examples of theories including those used for strategic decision-making of companies and countries, information asymmetry and instability of financial markets.
Of all the social sciences, economics is the only discipline that is given a Nobel Prize. It is treated as highly as physics, chemistry, physiology and medicine. Critics say the Nobel Prize gives too much prestige to economics, but it is still considered a refined science.
For Korea’s economics to become more useful in resolving real issues, the specialists must have self-reflection. Although there are many academic societies, no publication has been created to meet the global standard. We need a system in which talented, young economists can build up their theories and expertise and conduct good research on the real economic issues of the country to help the government devise effective policies.
Having different evaluation methods for the new and established scholars are another way to achieve the goal. In order to allow experts at home and abroad to have excellent studies on Korea, the state-funded research budget system must be revised. A world-level private think tank, where experts will gather and conduct research, is also necessary.
This recommendation also applies to other fields. We need true experts in politics, diplomacy, security, humanities and science to build a future Korea, not pseudo-specialists. We must nurture true specialists with abilities, passion and devotion and use them wisely.
Translation by the Korea JoongAng Daily staff.
JoongAng Ilbo, Aug. 29, Page 31
*The author, a former chief economist at the Asia Development Bank, is a professor of economics at Korea University.