Diane Coyle in her book COGS and MONSTER WHAT ECONOMICS IS AND WHAT IT SHOULD BE argues to rethink about her economics discipline as per new challenges. Coyle highlights that economics discipline is not diverse and it has monolithic nature of mainstream journals and top economics departments. Besides having gender balance, economists have to be well versed with approaches adopted in psychology, sociology, history and have to develop comprehensive computer skills to understand things in digital world.
Economists has not much to celebrate due to inherent difficulty in forecasting macroeconomic variables and therefore, are in a difficult situation as media and society often talk about economics in terms of main macroeconomic variables. Good governance is based on intelligent public policy which is crucially dependent on how well we measure economy. GDP is decreasingly a good measure of progress, which is hardly surprising as it was constructed as metric for the economy of 1940s.
Economists are influential in public policy domain but they have failed to address some of the important challenges of modern economy and stuck in era of measuring agriculture, industry and typical services and designing policies accordingly. There is very valuable contribution in Microeconomics and most economists are not forecasters but work on a very wide variety of subject from innovation to health care to pensions. Economists have failed to communicate their discipline with masses. There is a gap between masses and economists’ understanding about economy. In case of Brexit, economists message did not resonate with just over half of the people who voted. Coyle points out that economic statistics measurement in business as usual is not useful for policy making. There is need to redesign public policies in digital era. Designing competition based policies among digital companies, where winners take all, on the pattern of tangible output is no workable and pose immense challenges for which economists need to think hard for new approaches.
There is a growing wedge between the kinds of economic statistics available and society’s well-being due to challenges posed by digital and data markets. According to Coyle,
Economics now needs both theory and evidence about what actions, by government or others, will lead to better outcomes when both government and markets are bound to fail. Coyle demands a fresh thinking where technocrats should consult other social scientists to become political economists and also develop capacity to become good computer programmers to understand digital technologies.
I found it very interesting and very engaging book in many ways. It helps to get an overview of economic history, Keynes vs others, 2008 GFC and a thought to work in digital era.