Non-economists often describe economics as a "dismal science", but I think this is a misleading description. Economics appears dismal only because economists often focus on problems which seem difficult to solve and, very often, these problems relate to the living condition of those who are not making sufficient progress, or whose progress could be threatened in future. Malthus's original prediction about population running out of sustenance is perhaps the most famous dismal forecast. Similarly, forecasts about climate change in future and its likely effects will qualify as dismal in the extreme.
And yet, such analyses perform an essential function. They draw attention to basic problems which, if not addressed in time, will snowball to unmanageable levels. Our critics should remember that we economists focus on problems not to revel in them, but only to draw public attention to these issues and their possible solutions, in the hope that the attention they receive will lead to a resolution.
This is well-reflected in our own experience in India with the evolution of perceptions on key issues and on how to design public policy to achieve the key socio-economic goals. Economists have been at the forefront of thinking on these difficult issues and have taken the lead in getting new ideas accepted. However, we should also recognise that once new ideas get established, they get transformed into orthodoxy, and orthodoxy typically doesn't change when circumstances change. It is then left to other economists to enter the fray and challenge established beliefs and argue for new approaches.
Lord Keynes captured the essence of the problem when he said: "Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back."
The real role of the economics profession is to subject orthodoxy constantly to the test of analytical scrutiny and empirical investigation. I hope conferences such as this one will serve to do exactly that, because this is precisely how progress has been made in the past.
Taken from a speech given by the Indian Prime Minister to the 92nd annual conference of the Indian Economic Association on SundayReuse content