Article by Ricardo Hausmann: “Many of today’s most urgent global challenges, from stagnant growth to climate change, require ambitious, innovative policies. Yet economics has shifted away from creative problem solving toward a narrow approach that is incapable of devising practical solutions to complex, real-world problems….Should the world have dentists or lawyers? Obviously, it needs both, given that each profession serves different purposes. But when it comes to economics, the question is more complicated, because the field confronts an internal identity crisis over what kind of economists it should produce: policy architects or program auditors.
The distinction matters beyond the halls of academia. Auditors are methodical rule-followers. They arrive with checklists, verify compliance, and flag deviations from established norms. Their work is careful, precise, and fundamentally conservative; it focuses on ensuring that systems function according to predetermined standards, rather than imagining new possibilities.
Architects, on the other hand, are creative problem solvers. They must reconcile competing goals and address complex spatial, material, and financial constraints. Their work is inherently innovative – they envision what does not yet exist.
These professional archetypes attract different personalities and sensibilities, and they require different skill sets. Yet over time, economics has increasingly abandoned the architect’s mindset in favor of the auditor’s, changing not just who enters the field but also what they seek to accomplish.
This shift can be traced to a common misinterpretation of Kenneth Arrow and Gérard Debreu’s first fundamental theorem of welfare economics, which asserts that, in the absence of market failures, free markets lead to efficient outcomes. While Arrow himself believed that market failures were pervasive, the theorem fostered a defensive stance within the field: if markets usually work, then economists’ job is to protect them from interference…(More)”.
