Yes Scotland Response: If different respected economists cannot agree which side has the strongest case, how seriously should the public take their opinions?
The great economists of the past – e.g. Smith, Marx, Marshall, Keynes, Galbraith – were political economists, they included real life people and relationships in their discussions, analyses and theories. What they had to say was founded on their own and others’ experiences of markets, behaviours and practices. Their work was based on in-depth discussions with industrialists, workers and consumers. Their classic books and papers are as accessible and relevant today as when they were written, because they had gained an understanding of how the economy and society worked. In modern terms, they embraced all the social sciences and a number of the humanities – to them, geography and history mattered.
This all contrasts with the dominant esoteric approach offered by the macroeconomists, yet these are privileged by the media in independence discourses to the neglect of those who consider firms, labour markets and other elements. Narrowly based on economic models with their need for restrictive heroic assumptions of general equilibrium, continuing and unchanging relations between economic variables, they are less reliable and insightful. The IMF and FT are among many commentators to point to the failure of macroeconomists to forecast recessions or to warn of the imminent crisis in the macroeconomy in the late 2000s. Widely quoted surveys of macroeconomists have very few who look outwith the UK to the experiences of our nearest small neighbours during this period of crises, despite their superior performances. Papers and such surveys of independence, however, are enthusiastically reported by the media as if they represented facts and inevitabilities – ignoring their inherent limiting assumptions, neglect of class and gender, their poor track records, and that the surveys of ‘opinion’ are exactly that and fail to recognise their prejudices and lack of knowledge and understanding of how people, entrepreneurs and other actors would react to change.
But then look at those economists who are in favour of independence, Professor Sir Donald Mackay for instance. They are political economists, well informed by decades of discussions, debates and analyses with employers, policymakers, practitioners and unions. They do macroeconomic narratives but also analyses of industries, labour markets, the oil and gas sector, etc., they have established their own enterprises, run development agencies, advised governments and companies, and have a much better understanding of what motivates entrepreneurs, workers and consumers. Those within the Scottish political economy tradition also tend not to stop at the mathematical results of modelling but rather seek solutions to revealed problems of e.g. gender inequalities, poverty and low productivity, and propose improvements and responses to challenges.
Who do we trust – the better informed and not the technocrats.
Professor Mike Danson, Professor of Enterprise Policy, Heriot-Watt University and a member of Academics for Yes