Concerns about economics: Time to investigate background

Nobel laureate economist Paul Krugman in his insightful column titled Does Economics Still Progress? in the New York Times published on September 27, 2011 fumed saying: "And all this makes me wonder what kind of an enterprise I've devoted my life to". The enterprise Krugman is telling about is economics. His view about the progress in economics since 1971 to the present time is succinctly caught in the following statement: "In 1971 it was clear that economists knew a lot that they hadn't known in 1931. Is that clear when we compare 2011 with 1971? I think you can actually make the case that in important ways the profession knew more in 1971 than it does now."  There is a grain of truth in Krugman's statement and we will not have to wait too long to observe the inevitability of Krugman's statement. The question arises: why can it be argued that one can make a sense that the profession knew more in 1971 than it does now? There can be ample reasons to claim so.
What is important is not to point out ample reasons going in divergent directions from the core point but to single out those that converge to the core or the answer. We argue that the dilemma that Krugman is seeing is mostly ideological.  Krugman clamoured that the financial disaster caused no intellectual discomfort for those who made their models of no allowance for it. In particular, he is very much reluctant to call it 'Economic Science', because it is too immature as a discipline to call itself a science. Not only Krugman is having these kinds of concern, there are a lot of others who have such concerns.
Probably such concerns have less to do with ideological fights than with the background checking of economists. What can we can expect from a person who after devoting his whole life studying natural science such as physics turn out ultimately as an economist? The expectation is exactly equivalent to our rational expectation. It is less likely that we would hear from such an economist that market is not perfect. He would in most of the cases claim that market mechanism is exactly equivalent to natural science mechanism where prices adjust automatically to demand and supply to clear off the market.
There is no doubt that the market mechanism has some intrinsic truth like the natural laws but that is not tantamount to saying that the market is perfect and is able to locate fully stable equilibrium left on its own. If a person studies economics in this way, it is better that he studies economics on Jupiter and Mars where no human beings exist, but matters only. So, it is better that Paul Krugman considers the problem from the core. The core is the background checking of those people whom universities give the entry to the graduate studies in economics such as PhD in economics. Let us try to view the problem from this angle.
WHY SHOULD ENGINEERING STUDENTS BE DENIED OF THE OPPORTUNITY? It is controversial to claim that engineering students should be denied the scope of PhD studies in pure economics. People have freedom to choose and learn. Nobody has the right to prevent them from doing so. This kind of claim is totally irrelevant here, because freedom doesn't bear any sense here. For example, a person studying sociology can also claim that he has the right to do a PhD in astrophysics and university should give him the chance to study, provided that he meets certain criteria. This is granted and creates no problem, since the person studying physics will not be to manipulate the discipline imposing his personal beliefs and ideologies. But when a person graduating in electrical engineering enters a graduate school to do PhD in economics, there remains a lot of issues to address. First of all, as Krugman cited, economics is not a science. The person who spent his whole life studying matters only which are guided by natural laws would be more likely to think laws in economics as a reflection of natural laws. Though economics has laws and theorems, these are more intrinsically grounded in human interactions than in matters. Second, to study economics it is more important to know about society and its basic structures. How does it work? What kind of vision would lead to more equality? To cite an example, an economics PhD degree holder can view himself/herself in different ways depending on his/her personal orientations to a society as a whole. He/she can view the service in terms of demand and supply where he/she will deliver lectures in a university and will be paid accordingly. He/she can view his/her service as a lecturer in terms of contribution through which he/she strives to reduce human beings' misery by working in underprivileged and underdeveloped regions to provide good quality education for those who are socially deprived. Furthermore, he/she can view his/her service as a means to gather higher personal well-being only. Depending on the different course of actions of this PhD degree holder, the market will perform in different ways.
In whole economics, nothing can be greater than this myth: Market moves on its force. Actually, force is created by people and by their course of actions, not by market itself. Think about a market system on the planet Jupiter. What kinds of force exist there? Who trades there? None trades there, and, hence, no market force exists there. Market is the total reflection of the choices individuals make and such choices are guided by the underlying motivations they carry behind their choices.  
Third, an engineering graduate is more likely to spoil economics by imposing his firm belief in the natural laws in economics models and theories. Students from natural sciences know a lot about mathematics but less about economics. Even then they managed to excel not because they are finer economists but because curriculum emphasises mathematics that has become a bread and butter for studying economics. Certainly, we cannot expect something better from the students of natural sciences than seeing a model filled with mathematical expositions built on the basic laws of economics where the usefulness of the model has gone beyond the reality and the comprehension is the limit of abstraction.
Mathematics is simply a language for economics to express the basics in a clear manner, not the bread and butter to bamboozle masses with the beauty of mathematics. What a person would think of awarding an economist Nobel Prize for the game theory which has almost become a playground for only mathematicians who often become champions in economics for employing mathematics but were total underdogs in the natural sciences? In economics, both in the present time and in the past, we have experienced such kinds of people who fled away from the natural sciences to become champions in economics by the mere application of mathematics.  When some graduate schools post on admission criteria that the programme is based on a higher level of mathematical abstraction, it enjoys the fruit of attracting a lot of lemons from the natural sciences who just aspire to become a champion in economics being boastful of mathematical knowledge. This kind of trend of degeneration actually gives an answer to Krugman's bewildering assertion that today we know less about economics than we knew in 1971.
In economics there is a well-defined history relating to the people who were at the same time fine mathematicians and at the same time fine economists. John Maynard Keynes, Knut Wicksell, Paul Samuelson, James Tobin, Kenneth Arrow, John Richard Hicks, Alfred Marshall, just to name a few. Keynes was a student in mathematics and later studied economics. But his monumental book The General Theory was the first revolutionary text that formidably opposed the classical self-stabilising market principle. Paul Samuelson is credited with making advances in mathematical economics and so is true about Kenneth Arrow and Hicks. What kind of difference do we see between an economist like James Tobin -probably the twentieth century's best Keynesian macroeconomist - and a physics graduate-turned-economist? Perhaps there is a gulf of difference, not because Tobin is just better because of the orientation toward economics. Perhaps, they viewed mathematics as a language to make the theory less ambiguous and to save the conclusion being lost in the ocean of literatures.  But today, the scenario has changed a lot. Mathematics is less likely to be seen as a language but more likely as the bread and butter without which economics is often thought to be impossible. This kind of impoverishment has led us to the point where it becomes a concern for us and tempts us to ask: Do we know better about economics than we knew in 1971?
Paul Krugman in another article titled How did economists get it so wrong? in The New York Times resented that  "As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. " He added: "models are guised up in fancy equations." To this, an economist from the University of Chicago named John H. Cochrane, who studied physics at MIT and later moved to economics, replied in an article titled How did Paul Krugman get it so wrong? that "Again what is the alternative? Does Krugman really think we can make progress in economics and financial research by reverting to a literary style of exposition and abandoning the attempt to compare theories quantitatively against data?" This reply is at best a distortion of what Krugman implied by his comment on the use of mathematics in economics. Perhaps, Krugman is objecting to the motivation of using mathematics in economics, not the use of mathematics itself where Cochrane is criticising Krugman for the mere use of mathematics.
Whatever the controversy is, Krugman's comment on the unnecessary use of mathematics to make the models more fancy forcing them to cross the limit of reality is quite justified. What is the use of a model equipped with fancy mathematical equations like the most literatures in the game theory, if the model fails to capture the reality? This kind of dilemma is mostly observed in the case of researches of the people, who came from the natural sciences to become researchers in economics.
To conclude, we just say that it is high time that we considered twice in welcoming people in the graduation studies on economics from a field that has little sociological content. Economics as a principle has some elements that people should devour long before preparing to get a graduation degree in economics or PhD in economics. What a society can expect from a PhD in economics who studies economics with the belief that the market is omnipotent and comes out with the degree believing that he is an ordinary agent whose duty is just to respond to market forces? What can we expect from such a PhD degree-holder who never mulls over why he can drink a cup of coffee in a luxurious restaurant and others can not? Is it because of the supply and demand only? If it is so, then we can expect only an impoverished state of economics, no better or worse.
The contributor writes from the University of Denver, USA.
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