In economics it’s not enough that ideas or conclusions be based on concrete data; to be effective they must be shared by society. In other fields of knowledge, such as medicine, it is enough merely that the doctor knows the remedy in order for the patient to accept it.
In economics it doesn’t work that way, even if there are second or third opinions in agreement. In economics it is essential that public opinion agrees with the views of the experts in order for them to be applied. Dissemination and acceptance of economic ideas is absolutely essential to their success.
In these times of crisis (not just economic) it seems that ideas are systematically imposed by slogans. The aim of this article is to highlight the principles on which there is agreement among economists and, for the other issues, to appeal for reflection and dedication to the task of finding new common ground. All of this with the intention of trying to solve the specific problems that now require solutions.
As a complement to “The Ten Principles of Economics” by Mankiw, or rather, to support or confirm them, we present “The Rules of the Game of Economics,” taken from the fourth edition (2000) of the book Economics. Theory and Policy by Francisco Mochón. As you can see, the similarity between the “principles” and the “rules” is apparent.
The Rules of the Game of Economics
—We all want more, but we have to choose with appropriate criteria.
—For all economic actors, the cost of a thing is what has to be given up to get it.
—If we want to get more with the resources available, we must turn to specialization and trade.
—Economic activity is usually best organized by transactions freely made in the markets.
—The public sector can sometimes correct and improve the way the markets act.
—Economic actors respond to incentives presented.
—To understand economics one must know how economists carry out their analysis.
—Economists seek not only to understand reality, but sometimes also to change it.
—Economics must simplify reality in order to comprehend it: the models.
We can deduce therefore that, if on the issues identified there is agreement, then on those not covered by the principles and the rules there is no degree of consensus. Changes in the theory and practice of the science of economics are constantly under discussion.
The economics section of any bookstore contains a surprising number of books trying to explain the economic crisis and how to get out of it. The same is true of the opinion articles from newspapers and magazines.
A large number of well-founded economics blogs are available on the internet. The information at our disposal is so boundless that merely pre-selecting sources or authors to consult becomes a problem.
Economists should make an effort to explain, in the clearest and most informative way possible, why on some points there is widespread consensus. They should also should identify the points on which no such agreement exists, and explain why that is so. And all of this under the umbrella of the phrase from Borges that is so easy to relate to, “there may be enemies of my opinions, but if I wait a while, I may also be the enemy of my opinions.”
Excerpts from the article “Principles Generally Accepted in Economics” by Juan Francisco García Aranda. Extoikos No. 7, page 81. Available here.