In her new book, economist Diane Coyle seeks to reform her subject from within. She calls out the profession for its lack of diversity—for example, just 14.5 per cent of economics professors at US universities are women—but her main target isn’t economists but their ideas, specifically the question of how old economic premises fare in a digital world.
Can we still assume that consumers have individual, fixed preferences when platforms like Facebook hold such sway over our lives? Do old tools of competition policy still work in winner-takes-all markets? And what about keystone ideas like GDP or inflation, which turn soggy on contact with a digital reality?
Coyle’s point is not to dismantle economics but to restore it. And there is, she argues, lots of fresh material to work with. From complexity theory to market design, a new economics is emerging. The task, Coyle writes, is “to mainstream these divergences from standard models as the new standard.”
But if economics is so broken, why bother fixing it? Coyle argues strongly that her field is worth saving.
Yet a more sceptical position is tenable too—to argue not so much for the renovation of economics as for the diminution of its status. Perhaps we shouldn’t maintain the subject in its privileged position, but push for a more rounded public debate, in which economics sits alongside other disciplines like history, psychology and design.
Probably we need all these approaches. And either way, Coyle’s contribution is valuable. The book reads like a timely intervention delivered by a perceptive friend, in the kindest tone they can muster. Economists would do well to listen.
