Gone forever are the days when sitting in his office, a great scholar could create a new theory, which revolutionize thinking about economy. It was possible in the eighteenth and nineteenth century, maybe for the last time in the twentieth century, in the time of Keynes, but it is no longer viable in the twenty-first century. The fundamental work that has had the greatest impact on the evolution of economic thought in the twentieth century is, written in 1935 and published a year later, Keynes’s work on the mechanisms of a market economy and impact mechanisms on the economic situation. Now, due to the huge variety in economic matter, he could not write such a work or would have to stop at too high level of generalization. Analogies with other disciplines have caught my eyes, because these are not Edison and Eastman times, this is not the time for inventions of geniuses from the garage. This is the time of large R&D centers and interdisciplinary, huge, expensive, multi-year programs. But glimpses of genius always happen and they are very handy. If they also appear in the area of the economy – good for us.
These considerations gives the irresistible conclusion that the economy of the future must be heterodox. Times of orthodoxy, expressed in homogeneous schools of economics, also proclaimed uniqueness, are gone forever. Recalcitrant economists, who insist on their models, as the only legitimate and, worse, applicable to every seemingly similar situation in time and space, more often are wrong. Examined matter is complicated – the reality which surrounds us everywhere, environmental, economic, social, cultural and political and technological reality – and therefore relations within it, which want to understand and try to describe it, are complicated. Embracing what is going on, requires multi-threading, leaving the traditional mainstream economics (some with pleasure use Anglicism – mainstream economics), and using heterodoxy in place of worn out orthodoxy. You do not have the old, sacred canons, because reality has changed qualitatively.
Future economy will be less and less mathematicised and formalized, and in relatively increasing extent will be embedded in a cultural context. In the twenty-first century academic textbooks proportions of words and patterns, as well as narrative arguments and charts will change in favor of the former – contrary that has happened in the twentieth century. The departments of economics and business schools will need to teach more anthropology and cultural studies. Not at the expense of mathematics and econometrics, but next to them. This opinion in the future will be more and more obvious, today’s suggestion will become tomorrow’s canon.
Some economists put in particular their hopes into behavioral economics coupled with traditional macroeconomics, seeing as the first can become an instrument of improving the latter. If something creative emerge from this, perhaps there would be fewer mistakes in macroeconomic policy. But it can also give rise to an economic Frankenstein, which will lead us astray. Not from today and from yesterday I believe that without a better understanding of the behavioral evidence of rationality shortage, we cannot comprehend the ground of errors in economic policy. However, I have no doubt that it cannot be set to optimize policy decisions based on behavioral models of rationality and irrationality of behaviors. A good economist can explain the errors of the American central bank Fed (Federal Reserve System), which has not blocked rising evidence of the economic crisis, as well as which policy we should carry out to avoid similar mishaps in the future, without relying on sophisticated models of behavioral economics. Once again we may be threaten by triumph of form over content.
Behavioral economists are tempted to assume that, because we are so often not rational, rather than insist on the fact that we should be rational and theoretical generalizations should be done based on this, it is worth to try to model alternative theories of irrational or not fully rational behaviors. This is supported by computerization using more and better data on the one hand, and the achievements of other sciences, from physics to neuroscience, on the other. This may give rise to neuroeconomics. Just do not get upset…
Maybe in the future theoretical economics will become simply an instrument of empirical economics? Do we follow in this direction? There is an increasing number of situations in which you do not need to make assumptions about the object of research, because you can rely on the extensive factual empiricism. In the U.S. they say that all the information can be found somewhere on one hard drive. In fact, it is not all even there – and still too often we do not know on which one – but empirical field of research in comparison with what was and is, is rapidly expanding.
Moreover, it is interesting to see how the story comes full circle and once again, like in the days of central planning, placing high hopes in the giant supercomputer capabilities. While it is already getting harder and harder to meet veterans of centralized economy era – dreaming about such computational power that today has the Titan supercomputer that could provide optimum planning – there are more and more economists that believe that a centralized computer calculations will in future serve to slow down, and even to eliminate market failure. In some way this will happen, but this direction of evolution of economic thought is not promising too much, because computers will count, and economists again miscalculate.
Some things you need to observe other count, while others invent. Significant economist of his time Vilfredo Pareto (1848-1923), to the output of whom we even turn today, said that if it is the price of tomatoes that he do not know – which is a parameter necessary to solve the complex multi-level system of equations – he sends housekeeper to the market to check out how much are the tomatoes. Now it is not sufficient to just look at market trading, then put the data into a sophisticated computer model and insist on results. We should also doubt and constantly circulate between empiricism and theory, not just knowing how to count, but also not forgetting what and why is counted.
It is not far to the next observation. Economics must be interdisciplinary. This statement may at first glance strike. How to be an interdisciplinary discipline? Yes, but maybe now we should talk about economics not as a social science discipline, but simply about interdisciplinary economics, or, if you prefer, about an interdisciplinary approach to the study of economic processes. The reason is that many – more and more – happen on the meeting. And there is the most interesting. At the meeting of the economy and society which examines sociology, social psychology, anthropology, history, at the meeting of society and politics we examine the political science and sociology of power, at the meeting of the economy and the environment, which studies the ecology, at the meeting of the economy and culture, which studies, among others, anthropology, the relations of the economy and technology, being particularly the interest of management science, moreover, which is the part of economics. These meetings are more. In order not to lose sight of what is important, you have to look for appropriate set of lenses, not just the glass of one scholar in the traditional, narrowly understood economic speech. If we agree that thinking has the future, then let us agree to the fact that interdisciplinary thinking has a great future. In general and in particular in relation to the management and investigating it economics.