The problems that human mental equipment cause for science - discussed in previous posts - are as bad and worse for economics.

I think that what happened was a combination of two things. First, the academic side of economics fell too much in love with beautiful mathematical models, which created a bias toward assuming perfect markets. (Perfect markets lead to nice math; imperfect markets are a lot messier). Second, the same forces that lead to financial bubbles – prolonged good news tends to silence the skeptics – also applied to economists. Those who rationalized the way things were going gained credibility until the day things fell apart. . .

Economics is about modeling complex systems, and as such the models are always less than fully accurate. What economists do need, however, is some demonstrated ability to get big things right. They had that after the Great Depression, when Keynesian economics clearly made sense of both the depression and the wartime recovery. But now the profession needs to get back on track.

The old Soviet joke comes to mind:

"Under Communism, the Poles are fond of saying, only the future is certain; the past is always changing."

Economists have never, ever had "some demonstrated ability to get big things right", especially the Keynesians who predicted that the Soviets would overtake and crush the US right up until the day the Soviets collapsed. Keynesian models are no more useful than others in this. They may be "good to think" for those with authoritarian sensibilities and retarded ethics, but they are of little use to society.

There has been some recent cross-blog discussion of papers by David Levy and Sandra Peart that analyze the failure of economists to grasp the Soviet reality.

The problem, he said, was that we put too much trust in experts, and not enough in Soviet anecdotes. I demurred. The real problem, I said, was left-wing bias. Samuelson and other mainstream Keynesians were socialists at heart, so they bent over backwards to be "fair" to their ugly cousins behind the Iron Curtain. . .

They may have a case, but I'd like to see Levy-Peart expand their universe to include full-blown right-wingers. If you sampled all economists writing about the Soviet economy in, say, 1970, what would be the stronger predictor of negative assessments - ideology or elitism? I bet that in a decent multiple regression, ideology would crush elitism.

Trust in experts is left-wing bias.

Many in the mainstream media. . . tend to believe that a loss of trust in experts would be a bad thing. Trust in the experts is a key component of Progressive ideology. It goes along with the belief in social science, and the belief in elite education as providing a natural aristocracy. . .

What experts are really good at is circling the wagons to protect themselves. Talking points get repeated. Evidence that appears to cast doubt on experts gets picked apart, while evidence that appears to favor the experts is uncritically passed on. Ben Bernanke enjoys protected status. The global warming believers enjoy protected status. Stimulus advocates enjoy protected status. Above all, the label "expert" is carefully restricted to those who can be trusted to respect other experts and to denounce skeptics.

The real problem, IMV, is the same as that discussed in Skeptical Animus. Right or left schools of economists each have hyperactive "oh shit circuits" and hair trigger delete keys. They are unable to engage with reality because they are chiefly interested in confirming their biases, and when they only listen to one another in their small clubs they get away with it. They don't even see the contradictions. They appear to be vile and deceitful but this is (often) a result of their inadequate mental equipment more than character defects.

They would do better working together than in separate camps of circled wagons, but that would also mean that very little gets done since the underlying reality is that they have little grasp of what is going on and can't propose policies to manage that misunderstood reality. IMV this would be a good thing, but it would leave them vulnerable to populist charlatans with simple but false narratives that could incite riot - left or right, experts or not, it's all the same in this regard. The urge to "do something" is also part of the defective mental tool set.

This sounds hopeless but perhaps education could help in the same way as in the example cited in Skeptical Animus. Uneducated humans may be "intuitive Aristotelians" who believe that heavy objects fall faster but they can be taught, which changes their reflexive responses. Perhaps, then, people could be taught that the "do something" reflex is self-punking, dangerous, and that the sensible thing to do when faced with a dilemma of some sort is to think rather than do. Wild humans may have evolved to act first and think later, which kept their bellies fuller and their skin more intact, but it's not a good strategy at this stage of development.