Many years ago, the distinguished economist, William H. Hutt, wrote a pamphlet called “Politically Impossible?” He argued that economists should not seek political relevance by proposing only those policies that they perceive as politically possible, practical or feasible. They should speak truth to power, so to say, and advocate those policies that they perceive to be in the “public interest.” (Interestingly, it is often considered a key element of the economic rationality of agents to be able to distinguish the desirable from the feasible.)
As I see it, there are four important reasons for this view. First, economists are not very good at predicting what will be politically feasible. After all, they are not very good at forecasting economic events. Why should they excel in the political realm?
Second, from the public’s perspective it is important that they know what the options are and what their consequences are. If there is any validity (and it may be slight) to the idea of democratic decisionmaking, it is important to distinguish the options from predictions about the political feasibility of these options. If a particular option is not discussed, how can it ever become feasible?
And this brings us to the third reason. We do not live in a static world in which the political balance of power always stays the same. The knowledge disseminated by economics can have an effect (even if small) on the political balance.
The recent Tea Party effect on the debt negotiations was far greater than commentators would have predicted at the beginning of the process. (This is quite separate from the issue of the desirability of that effect.) In fact, I think that the “violation” of conventional wisdom exemplified by the Tea Party is one of the reasons the talking heads are so beside themselves.
Fourth, economists have an obligation to speak the truth, as they see it. What is their truth? At a minimum, it must be to describe the general economic consequences of various policy options without the undue intervention of their own value judgments or with a clear statement of those values side-by- side the economic analysis. This is vital to their role as teachers.
One of the implications of this general perspective is that economists should not seek to be the darlings of the political pundits, the political establishment, the TV shout-programs, or the purveyors of conventional wisdom. They should seek to challenge. The increase of knowledge is disruptive. It is not fundamentally a conservative force. It annoys people and makes them uncomfortable.
It is “liberal” in the truest sense of the word.