Saving economics from itself - Times of India

From 1980s to mid-2000s, economics was seen as a master-key to the world. Ronald Reagan and Margaret Thatcher in the West ushered in a firm market mindset in policymaking, and the calculus of incentives now fully pervades public life and administration. But after the global financial crisis of 2008-09 and the populist surge of the last decade, the discipline finds itself on the defensive.
The runaway power of global financial markets is now widely seen as a distorting force that deepens inequality and gives capitalism a bad name. What was the role of economists in sustaining ‘Frankenfinance’, many ask. Economics is too reliant on assumptions about calculating individuals (‘cogs’) while ignoring intangible values like the environment, say some. It’s all complicated math and abstracted models and ignorant of history and context, say others. Cogs And Monsters:What Economics Is, And What It Should Be, by British economist Diane Coyle, tries to reset its compass.
Many of these much-heard criticisms are straw-man arguments, she says, because academic economics has already changed in the last two decades. Mainstream economics is no longer a monolith, it now studies psychology and behaviour, the effects of technology, the power of institutions and culture and the long shadow of history. It has shifted its weight from macro to microeconomics, from theory to applied work.

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Saving economics from itself - Times of India
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