Policy Debate

Economists Aren’t up For Sale

Angela Merkel with economist Christoph M. Schmidt IW
How many economists does it take to change a lightbulb? Source: Maurizio Gambarini/DPA [M].

In Germany there is a backlash against certain professions: politicians, for starters, are accused of “living in a bubble” and of being interested solely in getting re-elected. Researchers allegedly can be “bought,” while journalists are suspected of “spreading fake news,” and so on. This is not just unfair toward these three careers (vocations even), it also damages democracy and society as a whole.

Every group takes on a specific, clearly defined role in society. And it is the job of the media as the so-called “fourth estate” to portray facts and facilitate a public discussion, making them an important watchdog of democracy. Science also has a debt to society, a real responsibility: It brings the results of its research work into the debating arena of society and politics as a basis for sound decision-making.

For that to happen, scientists have to leave the ivory tower where some of us still like to reside, and open our minds to a dialogue with politicians, the media and society as a whole, so we can offer advice, but never exert influence. Politicians and the media should see us as critical partners to help them fulfill their tasks.

It’s seen as unpatriotic for economists to criticize German economic policy – like, for example, Germany’s trade surplus.

It is not necessarily reprehensible for politicians to accept recommendations from scientists and make them their own, just as it is not necessarily wrong for scientists to accept consultation commissions from politicians. In many countries, especially in Britain and the United States, it is considered an honor to be able to advise politicians. Perhaps that is why it is no coincidence that the economists of these two countries are the leading authorities worldwide, and nearly every Nobel Prize for economics has gone to American and British researchers in recent decades. Because “good” science is the kind which is relevant to society.

Giving advice about economic policy in Germany is one of the tasks of the economic research institutes, the scientific advisory boards of the ministries and the so-called Council of Experts. It is important that such advice is transparent, scientifically sound and based on evidence criteria.

But economic scientists have made two big mistakes in recent decades: On the one hand, they did not succeed in understanding economic correlations well enough to be able to advise politicians, the business sector and society as a whole. They failed to see the global financial crisis coming, because the economy was based too much on theoretical models which neglected the hard facts and figures. In Germany in particular, we have hung on to old orthodoxies for too long – and we continue to do so. Our second mistake was not communicating clearly enough. It is not enough just to be understood by other economic scientists. We have to speak a language that politicians, the media and of course citizens can understand as well.

But other professional groups should also accept their share of criticism. Especially in Germany, politicians try to enlist scientists for their own special interests. It is seen as unpatriotic for economists to criticize German economic policy – like, for example, Germany’s trade surplus of more than 8 percent of its economic output.

Some people in Germany see such criticism as an attempt to strengthen the positions of the French or American government at the expense of Germany’s, but this is wrong. Because it is a sign of weakness to go out into the world wearing blinkers and stay impervious to good arguments from other countries.

And there are some in Germany who react viscerally to any vindication of the monetary policy pursued by the European Central Bank, which they consider to be anti-German and detrimental to Germany. And yet there are very good arguments why the ECB’s monetary policy is actually in the interest of Germany: Putting an end to the euro zone’s sluggishness will also be beneficial to Germany and secure its prosperity.

Every aspect of the economy is global. The science of economics also has the task of communicating different perspectives – from Europe and the rest of the world – to Germany and especially its decision makers. Only those who see the big picture can make the best possible use of research and advice on economic policy.

Politicians and the media should respect the role of economic scientists and not try to hijack or attack them whenever they disagree with them. Economic sciences should be measured exclusively applying the criteria of scientific excellence and relevance to society. It doesn’t have to please everyone.

 

To reach the author: gastautor@handelsblatt.com.

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