Eric Kemp-Benedict: Let’s not look for a unified field theory of economics, OK?

In a guest essay for the New York Times, Rana Foroohar argued that neoliberalism is an idea whose time has passed. If true, that would, in my opinion, be a very good thing. She also claims that neoliberal prescriptions generated extraordinary growth until 2008, an opinion with which I disagree. But that is a topic for another day – here, I want to push back against her assumption that economics needs a “unified field theory”.

To be clear, while I am responding to Forrohar’s essay, I don’t mean to single her out. The idea that there must at any time be one “right way” to do economics is widespread.

Foroohar tells the story of the displacement of Keynesianism by neoliberalism. But Keynesian economics didn’t disappear. Keynesians not only still exist, they are extremely active. They create and debate new ideas. What was displaced is the orthodoxy of economic policy. The call for a “unified field theory” is a call for a new orthodoxy. I would plead for a saner path.

I got my PhD in theoretical physics, where I learned a lot about unified field theories. Over the decades since I left physics, I have become an economist. In other words, I became a social scientist. And social science doesn’t have unified field theories. Instead, it has a variety of concepts and frameworks. Sometimes the frameworks are incompatible, but more often they give different and useful views into the social world.

In my own work, I get inspiration from many economic traditions – post-Keynesian, evolutionary, ecological, classical, and so on. The traditions that don’t fit are the ones most closely aligned with neoliberalism. If neoliberalism is on its way out, then I believe that recent work in these other traditions offers a very promising way forward.

But I don’t want to replace one orthodoxy with another. And in my experience, policymakers aren’t asking for a new orthodoxy, either. What they want is insight into possible opportunities and pitfalls as they pursue their social and political goals. For me, the policy problem dictates the method, not the other way around.

Rather than an orthodoxy, I would argue for a common understanding of what makes good practice. As a tentative list, I would say:

1. Look at the economy in historical perspective;
2. Try to understand the broader context in which the economy sits;
3. Ask policymakers and other stakeholders for their long-term goals;
4. Propose a specific way to use economic theory to inform those goals in context;
5. Be very clear about the limitations of data and models.

This list is nothing new. There are economists already working this way, and I am just one of them. The important point is that it is not a one-size-fits-all “unified field theory”.

That is not to say that economic theory isn’t helpful, with all of its various frameworks. Approached with an open mind, a specific framework can be selected that fits the policy context. In this way, economists can build a bridge from economic theory to policy.