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Global Strategic Foresight Community

CONTENTS
 Economics Growth and Development

The Possible Future of the Economics Profession

Scenarios Relating to the Social Contract Between the Economics
Profession and Society

Rafael Ramírez, University of Oxford

The economics profession has long been granted an implicit social contract, whereby benefits from
economic expertise accrued for society are rewarded with enormous power over society’s everyday
affairs. But since the global financial and economic crisis, limits of what economics can do have been
made visible, rendering the social contract plausibly susceptible to change. Various scenarios for the
future are possible: one is “the official future of economics”, where the profession remains adaptive and
close to power, with no significant change to the social contract. An alternative depicts the “economics
emperor” as having been discovered to wear far fewer clothes, raising interesting questions as to
whether “citizen scientists”, engineers, machines or even anybody with decent schooling and access to
relevant technology could take over many of the tasks that are currently economists’ exclusive domain.
 

It is increasingly accepted that the economics profession will need to adapt to a Share this page:

more complex world. As befits a field perceived to exert such immense influence,
 56  93
the profession has long been granted an implicit – as opposed to legal – social
contract, whereby benefits accrued for society are rewarded with enormous power
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over society’s everyday affairs. 

But since the global financial and economic crisis, the contract between
Author
economics and society can plausibly be considered much more susceptible
to change. 

The profession, and especially its “market” manifestation in finance, has put itself
at the centre of power. Alternately idolized and vilified, economists populate and
run key ministries, central and commercial banks, rating agencies, the financial
press, insurers, private equity, and sovereign and hedge funds. They counsel the
 
most powerful among us and are often afforded near ecclesiastical deference. The
Rafael Ramirez
profession is expected to keep societies from “going under”, to help management
Fellow in Strategy and Director,
be prudent, to enable us to do well and to hand over a better world to future
Oxford Scenarios Programme,
generations. 
Saïd Business School,
University of Oxford
Economics, and the theories the field rests upon, has been resilient – so far.
Although it trembled with the 1930s depression, the profession has not only
survived but also thrived in the years since. It has done so despite enduring major Disclaimer
setbacks periodically, the most recent being the ongoing crisis which began in All opinions expressed herein are those

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6/9/2015 Global Strategic Foresight Community - Reports - World Economic Forum
of the authors. The World Economic
2008. Economics has spawned and accommodated a broad set of ideas and Forum provides an independent and
impartial platform dedicated to
concepts – Keynesian, supply-side, neoclassical, behavioural economics, to name generating debate around the key
topics that shape global, regional and
but a few – that often disagree with one another. Mathematics and its algorithms, industry agendas.
the spreadsheet’s ubiquity, computer servers and faster communications have all
bolstered the field. With these tools, financial arrangements, analyses and the
Highlight
policies they support appear ever more “scientific”, “rational” and “objective” – but
all too often beyond the understanding of all but a few “economics experts”.
What are possible futures for
the economics profession?
Yet the failures of the profession are numerous, growing and now potentially lethal.
Systemic risk has not been priced into products. Climate change illustrates that the
longstanding tactic of treating things to which it is difficult to affix a numeric value
as “externalities” may ultimately prove fatal. So-called “trickle-down” economic
development has not worked as expected. Growing inequalities may give rise to
socially and politically unviable conditions. Many millions are excluded from “the
game” economists describe and do not benefit from the efficient resource
15
allocation promised. This year alone, 21 million individuals, as outsiders to “the
market”, have themselves become commodities exchanged for drugs, weapons or
16
money by traffickers; 36 million are slaves.
15 16

Highlight

Exploring the social contract

between society and the
economics profession

Questions have arisen about the fundamental assumptions upon which economics
has been premised. To wit, LSE anthropologist David Graeber found no hard
17
evidence anywhere in history that money was invented to replace barter. To the
contrary, he showed the monetization of what might remain unpayable obligations
as having provided an alternative to violence – and how quickly the two can switch
places. In the July 2009 issue of The Economist, Paul Krugman said that much of
the past 30 years of macroeconomics had been “spectacularly useless at best and
18
positively harmful at worst”. The Dali-esque cover depicted modern economic
theory as melting down. Could it be that economics arose in a historically
anomalous period, one we are now exiting? Could the conditions that favoured its
pre-eminence be ending?
17 18
It is not impossible to conceive that societies might take away, or at the very
least severely curtail, the license to operate they have afforded the economics
profession.

One possible way for such a shift to occur might be via civil society movements,
such as the “altermondialistes”, “Occupy Wall Street” or the “Indignados”, who
advocate an alternative societal model to the growth-based one advocated by
19
economists. A second might be through creative destruction: obligations might
come to be automatically traded and accounted via apps, with software engineers
and technicians replacing economists, just as the navigator in the cockpit was
replaced.
19
Various scenarios of the relationship between society and the profession can
be imagined. 

One scenario might be called “the official future of economics”, where the
profession remains adaptive and close to power. Here, no significant change in the
20
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6/9/2015 Global Strategic Foresight Community - Reports - World Economic Forum
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economics profession’s license to operate in society would occur.

20
An alternative scenario, referred to as the “Naked Economics Emperor”, depicts
economics as having been discovered to wear far fewer clothes. Here, a rewriting
of the contract between society and the profession would occur, raising interesting
questions. Could banks become like utilities? Deprived of their current complexity,
anybody decently schooled and of reasonable intelligence could run banks. Could
“citizen scientists” include economics to help the local citizenry directly engage in
21
economic decisions? Could machines and engineers take over a lot of what
economists do now? How might such changes occur without society suffering?
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Exploring possible futures of the economics profession and potential changes to its
contract with society offers opportunities to reconsider long-held assumptions and
to investigate key issues confronting the field, allowing proactive steps now to
address them. 

The World Economic Forum’s stated mission is to improve the state of the world.
Surely, then, it is important to contemplate the potential future of economics; after
all it is the “E” at the centre of the World Economic Forum’s logo.

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