In the 20th century, economics consolidated as a profession; economists could afford to write exclusively for one another. At the same time, the field experienced a paradigm shift, gradually identifying itself as a theoretical approach of economization and giving up the real-world economy as its subject matter. Today, production is marginalized in economics, and the paradigmatic question is a rather static one of resource allocation. The tools used by economists to analyze business firms are too abstract and speculative to offer any guidance to entrepreneurs and managers in their constant struggle to bring novel products to consumers at low cost.I think the last sentence is a bit of an overstatement--not any guidance? really?--but you could raise a similar concern for the applicability of some economics research to public policy.
Wednesday, February 13, 2013
(Another) criticism of the current state of the economics profession
From Nobel laureate Ronald Coase: