Economics, bound

I’m intrigued by [Daniel Davies’ suggestion]( that what the recession shows that economists should steer clear of talking about anything other than the economy itself. In the era of Freakonomics they “abandoned the study of production, consumption and exchange”, in favour of “awful amateur-hour sociology”.

In spirit, although perhaps not explicitly, this runs counter to one of the other big currents of economic punditry I’ve lately been bombarded with. Parts of the French media, [Esprit]( and [RiLi]( for instance, have been pushing behavioural economics as the solution to all that ails economics. In this view, economics failed by concentrating too much on rational behaviour — they couldn’t see the bubble-inflating irrationality driving companies and traders, so they failed to predict the inevitable collapse.

It’s theoretically possible to have both these views — to argue that economics should take lessons from sociology and elsewhere in order to understand the markets, but avoid themselves dabbling in social problems. In practice, though, won’t the blending of sociology and economics always cut both ways?

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