Topic: Economics is not fulfilling its true potential as a science (Read 360 times)

We're blaming the "old thinkers" today, isn't that right? That makes sense. Yes, let's ignore millennia' worth of economic wisdom because, well, look at Bitcoin now. Yes, I understand that we shouldn't be stuck in the past, but we also shouldn't be blind followers ignoring the traditional. Balance is the key, though

CBDCs? Yeah, central banks are trying to get involved in the market, but it's important to remember that they are not inherited any crypto's philosophy. They are heavily controlled, centralized, and subject to the government. They’re the “safe” version of cryptos for those who fear too much freedom might be dangerous. And greed leading to economic crises? That's a story as old as time. It's not about the tool, be it fiat or digital currency, it's about human nature. Maybe that's what we need to "innovate"

I like your words a lot. This is the real truth and there's nothing that could deny this fact. This has been the case for so long and there's nothing stopping it. People will always try to find their own benefits and take advantage of every situation if they get a chance. As long as this exists, corruption will continue to exist along with it. And as the world is changing every day, there's no stopping it. It will just continue to grow more and more.

This is why we need to face every difficulty on our own. When you start to help yourself, in that process you also help others. This is the best way to make this easy. As long as everyone starts doing it, not only the country's economy but the global economy could be improved. Fix your personal economic situation first and that will help everyone. That's the idea and it's all about people following this path.

That's because leaders and people don't really listen to any of them, if we really did follow or heed their advice, there's a big chance that we're going to see a financial prosperity but no, their advices are being riddled with holes by big businesses and banks because in all of the advices given by the best economists out there, the big businesses and banks are the one that's going to be affected negatively and so they actively discredit economists when they talk about something big.

To be fair that has been the case for politics for over 2000+ years. Even during the "democratic" period of Rome, even though it wasn't as "democratic" as it is today, we still saw a ton of corruption and that was an issue. Corruption and politics go hand in hand and there seems to be no end to it at all.

We need to realize that it is not going to be too simple to get rid of it neither, there is absolutely no incentives about it neither. There are corrupted people who are beloved by their public as well, just because they are not the other side. Which is why we are not going to see economics will get any decent anytime soon, we are going to end up with a result that would be ending up with a lot of trouble that could make it worth a lot more.

We cannot blame economists for the global financial crisis.  Economists only present their opinions and do not implement them.  The whole system is responsible for the financial crisis of a country.  Here the failure of the government is the most.  Lack of government accountability.  I believe that the desire of the powerful to make their own pockets heavy is responsible for the economic collapse of a country.  The more responsible the government of a country is, and the more vocal it is about its duties, the better the country is.  On the other hand, the more dishonest the system of the country, the more the consequences of the country.  A dishonest system will eventually bankrupt a country.

You see, when there's an economic problem and you inquire about economists, everyone comes with their theories and opinions. They sit together and decide which is best ( it depends on your definition of best though), probably suppressing the solution that would have worked most.
 
Also, economists see situations and problems in terms of long-term and and short-term. There may be a solution at hand, but that solution has to last for years, probably decades before you see its results.

And lastly, Henry Ford once said, "If everyone understood how our monetary system works, our economic problems would be solved before tomorrow morning" ... But unfortunately, that's not the case. Economists bring their theories and possible solutions, but the people, the individuals in the country are the ones to actually carry out those solutions. Take inflation for example, it isn't caused by economists but they bring up policies to prevent, manage, or stop it. The effectiveness of those policies depends on the individuals. It depends on whether they save or spend, whether they invest or build up liabilities, whether the private business export or import... Etc.
So, I don't think all economists do is brag. They're probably working really hard, harder than you think to stabilize the world's economy.

In my view, economists have limitations in conveying what's valid and likely to work well in every piece of advice they offer. An economic crisis arising from unpaid debt is an unexpected event, clear evidence that economic failure in a country can occur at any time.

This issue extends beyond the realm of economists, where there's still a fair share of unpredictability in every prediction made. Relying solely on knowledge and logic isn't sufficient. It all requires a dash of luck to ensure things go according to plan.

Innovation doesn't have to be just about technology. But innovation must also exist in relation to economic science and economic practice. Likewise in economic philosophy. We should not rely too much on knowledge from the past. We have to make small improvements and adapt it to current world conditions. Adapted to human conditions and continuously developing technology. Examples are fiat and digital money such as Bitcoin. The people who don't want to accept bitcoin are those who are stuck with the old thinking about fiat. And it is difficult for them to accept new things that are actually present not to replace but to add to the rich diversity of payment instruments which can become alternatives that develop according to the times and technology.

But the step of creating a CBDC is also a good step, it's just that currently people prefer freedom and a decentralized system. The point is, if we want to develop economically, we have to think according to the times and we also have to think outside the box. Sometimes stepping outside of common thinking can bring big changes. As long as it is in accordance with the regulations of the country where we are located and in accordance with human values.

But regarding the economic crisis, I think it all started not from economic ideas. But all of this happened due to the greed of certain parties which weakened the economic balance and an economic crisis occurred.

It is true that Reed's frustration with economists and their inability to effectively prevent economic crisis is a sentiment shared by many but not all of them agree with his perspective. it is important to understand that every field of science has its limitations and challenges. One of the primary reasons economists often struggle to predict and prevent economic crisis is the complexities of economic systems.

As far as narrowing gap between rich and poor is concerned, in my opinion, the most effective approach nvolves education and skill development, which can be put into action by governments with the required political commitment.

I am from a 3rd world country so I know how it goes very well. Corruption everywhere. The thing you have mentioned about projects getting started and getting finished. That's because people involved in these projects are always forced by their co-workers or higher-level persons to make a budget where they can make an extra profit. One of my friends is in civil engineering. He told me that if the whole project needs 200 million, they will make a budget of 800 million. And the corruption is so much in there that the original budget which is 200 million will never get used fully. they will cut the percentage from that too. Making it a 100 million budget project with low-quality materials.
Where corruption happens this much, how can we imagine the government listening to some opinion from an economist? And if you go against it, you will be tagged in such a way that you will never be able to continue to work and other sectors or companies will never accept you for that tag.

Everyone keep coming with his own theory thinking that that's the best way to give an approach to the economy and this is one of the reasons you discover we keep having new theories each day and this is in other way making things gets more complicated because the way the scientific approach applies to human lifes is different from the economic approach, but each has to work along with each other to form a unified result towards the development of the economy in each of their research and have thesame take on their roles to tackle economical challenges.

There is a very big difference between theoretical assumptions and practical reality. The world before now was ruled by elites who are scholars who based their everyday life from the results of their analysis gotten from ancient data and experiences and this information served as basis to solving problems that are related to human life and the economy of the world. This data did not fell them, but as the world grows, things become more dynamic and some of these data are being updated with the new world order.
This is the reason adaptation becomes  the solution. Everyone must be ready to change with the ever dynamic world and to solve their problems with the resources available to them.

And what makes you think it is the job of economists to contribute to society? Lets look at the fiat system, even a kid would be able to understand that such a system will be too unstable and benefit only those at the top, and yet economists all over the world defend the system with all what they have and they think that anyone that criticizes it does not know what they are talking about, so in my opinion the evidence is very clear, economists exist to help those at the top to take advantage of everyone else, and when you think about them in this way then you can see they are doing a good job.

True that imagine a person who is in power have a percentage gain in every project he created.  This is one of the reason why a country overspend and underdeliver because of this kind of system.  If I am not mistaken the political leader of a community can have 25% of the amount of the project he wanted to implement.  This simply shows that the project has been overcharged by 25% even before it started.  Worst the scenario where the budget had been released but the project was never finished.


The example I stated above is one of the system that can be considered corrupt.  Imagine people are paying these government official for their job and these government officials aside from the regular payroll even have a 25% overcharge on their created projects and it would be lucky if the project realized but most of the government projects are unfinished. So how could an economist fix that?  Economist has no authority nor have power to sue these corrupt officials that is milking the stash of the country.

This is an amazing question, the question of how much of a science economics really is. There are certain guidelines and principles that help determine what is and what isn't scientific knowledge. You might think it's enough for explanations to be confirmed by observations/experiments, but that's actually wrong. As Karl Popper pointed out, what actually matters is falsification, namely the ability to disprove an explanation/theory. If it's possible to set out criteria to disprove something, and it stands the test, that's scientific knowledge. That's why when testing new drugs, for example, there are control groups taking placebo to see whether the effect is truly measurable.
Now, lots of our natural scientific knowledge is like that, based on facts and falsifiable. There's also sociology which is at least partially like that, as we can see that political polls tend to be very successful in determining election outcomes (and if they didn't, we'd see that it's not scientific).
But now, let's take Economics. A lot of it is theories, theories that help understand financial behaviour, but often not something specific enough to be falsifiable. Major economists can also often disagree completely about some things, which doesn't add science points to it. I don't know Economics well enough to state that it has no strict scientific knowledge, of course, but at least a significant part of it is not science.

The economists don't run the world. The politicians are the ones making the important decisions. Some politicians have good economic advisors while others have bad advisors or simply don't listen to any advise coming from experts.
There was a saying. "If you gather 20 economists in one room, you will get 21 different opinions." The global economy didn't change that much in the last 100 years, that's why the economic theory stays pretty much the same.
The example you are giving with Citigroup and Latin America has little to do with the economic theory. This example is more suitable to the financial theory, rather than the economical theory. A bank, which is managed by greedy people loaned money to a bunch of corrupted populist Latin American governments. The outcome was pretty much expected.

Powerful and rich people are laundering money and we just watch and are unable to do anything. Do you think that the government does not know about this? Of course, they know. Because they are the ones helping them in the first place. Millions and millions of currency are getting laundered and all we hear about is news.

What I am trying to say is, that even if the economists are doing their best to provide the best solution, the system itself is corrupted. No matter what it is and how good it could affect the economy or in times of crisis, how it could solve the problem, the system won't allow for that to happen. All they care about is personal gains. The rich will get richer while the poor will stay poor and face the hard times. I know I am getting political here, but that's the truth here.

The best theory is the theory that is practiced and implemented. If it was just a theory, anyone could make it, but what is difficult is implementing what is in theory into real life to overcome existing economic problems. In my opinion, economists make quite a big contribution in overcoming economic problems and in increasing economic progress. It's just that the implementation of theory is not optimal and there are other inhibiting factors because sometimes what is in theory is different from what happens in the field. So this is where, besides having to understand existing theory, we also have to learn to work tactically to face problems that are beyond our previous expectations.

Do not confuse economic science with astrology, like who thinks that astrology and astronomy are the same or that both are science.

Economic sciences are part of theoretical studies that require putting into practice. But they depend on human and natural variables, both within their probability influence.

Catastrophes, pandemics, etc.  And the unpredictable human factor in their behavior makes any economic benefit based on theory an unpredictable result that cannot only be presumed to work because it has a background based on economic sciences.

Thank you for your opinion, and after I saw your post, I immediately remembered someone who once said to me that "Theory without practice is a lie & Practice without theory is arrogant."
And indeed, when talking about economics, many people put forward a theory to solve existing economic problems, but they themselves never put into practice the theory they put forward.

Theory is a guide for those who enter the world of business, with theory being a guide so that we have clear ways and goals in doing business.

Don't think too much because the journey and time are very short. So when you understand a theory well enough, what you have to continue is to put it into practice. It cannot be denied that what is in theory is sometimes different from what happens in the field. However, to find out whether this theory is effective or not, we have to try it.

This is true, there are a lot of professors who have shown how we could get out of the current situation we are in and nobody cared about what they said as well. It's just a shame that people spend decades into mastering one thing that can decide the lives of tens of millions of people and they are not cared about.

Why did this person learned it so much if we are not going to care about them anyway. It makes no sense that the people in power are not the people who have the information that we need, and the ones who have the information that can make our world better, are not the ones who are in power. This causes the ones who have the power, to ignore the ones who can make the nation better and causes the nations to get worse.

Why would Banks worry over someone else's money? The deposits are not their money.... so they can be reckless with their lending practices. We saw what happened with the fractional reserve banking in the previous crisis... Banks simply created "money" out of thin air and they gave loans to people that were not able to pay it back.

The governments look the other way, because they use tax payers money to bail out the Banks when they f@#$k up. The CEO's and managers got bonuses for the way that they supposedly "saved"  the Banks. 

Economics is not a topic to just discuss without considering some other elements that also constitute it progress, there are so many people who think that this should be vested on one side than allowing the general participation of everyone being involved in the exposure we give to the economy, we are all interdependent of each other in an economy, for economical growth to occur, we must not rely only on the economist alone to sustain an economy.

It's not fair to lump all economists together. Economists like Milton Friedman and Thomas Sowell have been opining on the failure of government to follow basic economic principles for decades. Meanwhile, so called economists like Paul Krugman, conflate economics and politics, praising liberal failures in fiscal policy.

Economists opine on matters related to monetary/fiscal policy. The politicians act within their own whims, and it's entirely up to these politicians on who they choose to listen to. Economists are not in the position to form public policy, that's the job of the congress.

The western centered world financial structure effectively collapsed in the 2008 Crisis. The Federal Reserve Bank of the United States saved the system by printing money. The printed money was given to big banks and these failed banks were made to look as if they had not failed. This money printing operation was gigantic. In its 200 odd year history, the US had only printed around 825 billion dollars of money until 2008. America's huge industrial infrastructure, mega cities, two world wars, the cold war, the Vietnam War, the Iraq War, major scientific breakthroughs and the Moon Landing Project and so on... All of this was done with a monetary base of 825 billion dollars.

In 2008, in order to make it look like the crisis did not happen, the US printed 3.3 trillion dollars of money in a few years, about four times more money than it had printed in 200 years. Following the FED, the central banks of other developed countries also started a race to print money one after the other. If the field of economics is based on printing money in every crisis to cover the negativities of the system, then we cannot talk about economic development, growth and poverty reduction. The world is not the old world and crises are no longer experienced in the style of the Great Depression. I wish they were like that and it would be possible to come out of the crisis in a V shape, but the crises we are experiencing today are crises that spread over many years and are difficult to return.

With each passing of time, there is really innovation in all countries, where the old way is no longer used because the civilization that exists in each country has been upgraded. That's why we are living in modern times now that we have modern technology.

Today, the beauty of the economy of each country depends on whether the good economists who give advice to their leaders in each country will follow it. If they do, there will surely be a good result or growth in the country, but if a leader does not follow the good advice of an economist, the country will for sure have a crisis. That becomes the role of an economist in a country.

I just thought of a way to explain to OP the difference between theory and the economy as a model of study and real-life application.

You can build a car that is perfect, it runs smoothly it can drive at any time anywhere, it has a billion sensors, the car will be great except the moment you're driving legally and carefully and a drunk driver is swerving on your line coming 200 km/h at you and totally destroys you!
It was not your fault, not your car's fault and nothing could have prevented this from your side of the story.

Same here, there is no way to prevent some of those things, if you go into 5 or 10 years bonds, how can you make sure
- a virus doesn't screw the whole economy
- a war doesn't start
- an asteroid doesn't hit the earth
- Hitler's grandson doesn't become president of Bartovia?


It's the doom and gloom section, haven't you got used to it?

Economics is a social science, not like physics, where there tends to be more consensus, and yet in physics there are paradigm shifts. To this we have to add the fact that ideology is imbricated in economics, which makes objective knowledge more difficult, so to speak. But there are things on which there is consensus and they work, such as, for example, that raising interest rates serves to lower inflation, and lowering them to stimulate economic growth.

Regarding the meltdown you ask about, it is relative because a left-wing economist will tell you that what is going wrong is because not enough regulations and state control have been established and someone on the right will tell you the opposite, precisely that the economy is going wrong because it has not been deregulated and liberalised enough.

What meltdown? The global economy is growing, global poverty is declining, developing countries are developing. We just recently had a global pandemic and we handled it quite well, it didn't become a Great Depression 2.0.

So far all the dooming about the repeat of 2008 crisis has been proven wrong. This of course doesn't mean that there will never be a crisis, but to say that the field of economics is useless and yielded no results sounds absurd to me. Today's economy seems more resilient because the hard lessons of crashes were learned.

I do not think they are to be blame for the economic distress. Economists are here and have knowledge about the economy but they don't have the power to implement what they know.  Remember, the one with the power are those who are sitting in the government.  So do not blame them for the economic meltdown.  The situation is the same with a company that is getting bankrupt and you happen to know the situation and know the solution but you are unable to help because you are not affiliated with that company thus you have no rights or authority to fix such a problem.

Even while driving, you’ve got to hit some bumps on the road. It’s the way it is in my country. You can never win all the wars you fight, it’s a profit and lose market. You win some and you lose some. You can only hope that your profit out weights your loses.

Being an economist doesn’t make you a perfectionist that can solve all the problems arising in your immediate environment. You can only solve a few and maybe some theories would not apply but then, there are other theatrics that do applies in other aspects to living.

Like we can see in demand and supply curves,
Economies that produce more of what they consume and do more in export other than import would always have a fairly stable standard of living. These are some bases to stability and humanity is sure to create its own problems. We could only try!

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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?

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.

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.

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.

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.

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.

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.

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.

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.

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.

 

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;


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?