Bounty: Even a World Banker Rips Other Economists
Criticism of the field comes not only from rebels but also big name academics.
May 2, 2018
Jeffery J. Smith
People who think they know everything are a great annoyance to those of us who do.” — Isaac Asimov

Mainstream economists seem nonchalant about their own colleagues critiquing them.

Lars Peter Hansen, who in 2013 was granted the ersatz Nobel Prize (actually, the global bankers’ prize), said, "I believe that the recent financial crisis exposed gaps in our knowledge.” His colleagues’ response was a gap itself.

One half of the go-to team for housing prices—the Case-Shiller Report—also writes for the National Bureau of Economic Research. Addressing them Karl E. Case said, “While a great deal of attention has been paid to house prices in the United States, economists have devoted very little time to the study of land prices. In fact, there are virtually no generally available data on land prices in the United States. It’s not clear why this is so… Nonetheless … It is a virtual certainty that the increase in volatility across regions is the result of differentials in land [not house] values.”

Yes, compared to the routine of calisthenics through which professional economists put the statistics for sales of buildings, especially homes, the attention that the pros pay to the numbers for sales of land is barely a slight nod. No, it’s not clear why most conventional economists overlook one of the only three factors in production, nor why mainstream statisticians do not ferret out land values. However, it’s hard to ignore the powerful political influence of those now corralling the lion’s share of land rent.

At least one official voice howls in the academic wilderness (we howl at the academic wilderness), and that is Albouy and his team (Ch 13). Yet his monumental work goes un-cited by his brethren. (We mention it to insiders every chance we get.)

While we find economists asleep at the wheel—being unwilling or unable to tabulate a good number for the worth of Earth—actual members of the discipline find many more faults. According to those economists, their cohorts get nearly everything wrong, from basic assumptions to technical writing. Yet ironically, even the critics miss land, the discipline’s most blinding blindspot, just as the “complacents” do.

Everywhere you look, land, land everywhere, but not a plot to count. Furthermore, land’s rent is big and powerful—everything you’d want in an economic phenomenon—but economists don’t measure it. Two strikes—one away from being out.

Are the two phenomena—absent land and crippled economics—linked? Is the reason why economics frustrates even economists because they lost land as a factor? So that now they founder and devote all their resources to distractions? And code their claims in impenetrable jargon? Thereby facilitating the adoption of conventional mistakes as gospel?

What’d They Say?

The Guardian’s John Lanchester lists his favorite (least favorite?) jargon. One is “quantitative easing”. It’s a euphemism to cover up the fact that the biggest central banks create brand new money from nothing and hand it over to lesser banks and friends until they can pay it back. One main way the recipients avoid bankruptcy and amass funds to repay the gift is to buy government debt. Able to count on banks to always buy their bonds, governments slide (or rush) deeper and deeper into debt.

A more colorful phrase than the usual jargon was the Chairman of the Fed’s suggestion, citing libertarian Milton Friedman, to toss cash out of helicopters.

Insider critics of jargon can occupy lofty positions—at least for a while. Paul Romer, Chief Economist of the World Bank, criticized “Bankspeak”, the jargon of his underlings, and typical of practitioners of the discipline in general. Romer’s own boss—the head of the World Bank—responded forcefully and, instead of supporting clarity in exposition, stripped away some of Romer’s job duties.

In 2015, Stanford University’s Literary Lab found the Bank’s writing “codified, self-referential, and detached from everyday language”. They’re the ones who coined the term “Bankspeak” for the lender’s “technical code”. They also noted that Bank authors would link long chains of nouns with the word “and”, thereby producing mind-numbing lists.

Among his sins, Romer:

  • ‍imposed a quota on the conjunction “and”,
  • ‍canceled a regular publication by the Bank that didn’t have a clear purpose,
  • ‍insisted that presentations get straight to the point, cutting staff off if they talked too long, and
  • ‍let others know it’d be a good idea for his subordinates to dive right into public debates and align their work with the goal of the Bank—ending extreme poverty and reducing inequality.

The Development Economics Group—DEC, the research department of the lender—issues reports composed in a dense, convoluted style. Romer urged researchers to write more intelligibly, using the active voice to be more direct.

He erred in focusing on precision in communications and not on the feelings of economists. The more than 600 DEC employees pushed back and the Bank president sided with them. Now Romer no longer oversees the DEC. Nor, if you’d been waiting for the other shoe to drop, does he work there at all, after speaking frankly in an interview.

Bad as it is, what World Bank economists crank out is as good as it gets. Members of the discipline rank the World Bank tops in development research. In terms of the number of times its output is cited, they’re first, ahead of the London School of Economics, Brown University, and Harvard University.

Other than Bernanke’s use of Friedman’s helicopter, we find professional presentations of their findings to be tough sledding, hardly packaged for we laypeople. Our being uninitiated non-specialists on the DIY kick, we strain the eyes peering at tables and reports and articles. We wade through all the numbers, jargon, and faulty reasoning.

Jargon Justifiable?

It’s their peers whom specialists write for. They don’t write for we lay readers, despite the fact most academics collect salaries from government spending and it’s the public paying taxes that funds the government. Their writing in jargon is more designed to cover-thy-butt than to reveal important truths.

Another economic institution has dealt with the jargon problem not by handcuffing a critic but by revising its writing. That’s the World Economic Forum’s Global Agenda Council on Space Security. They’re publishing a book to explain in plain language how space-based technologies and services can help society face its greatest challenges.

One wonders to what degree jargon is useful to convey thoughts to other specialists versus serving as a code to exclude non-specialists. And given the caution with which economists must tread, is being obtuse a way of flying beneath the public’s radar, and thus the elite’s? Jargon creates insiders and outsiders, becoming a badge of belonging. Humans are wired that way. Every generation and every discipline does it.

Cliques are OK for teens, but for those supposedly adding to society’s storehouse of knowledge? And who’re paid from the members of society paying taxes? If taxpaying lay people can not understand their tax paid academics, how’s that fair?

Clipping Romer’s wings reminds economists that even prominent ones—Romer is often short-listed to receive the so-called “Nobel” Prize—can not rock the boat. If they can’t even raise the bar for communication, how could they consider doing something as fundamental as researching a basic factor in production, i.e., land? It seems they can’t.

Yet—more irony besides insiders objecting to their discipline’s jargon—pointedly ignoring land could be the root cause of corrupt economics. Without land rent to include in their calculus, economists can not calculate logically. Without much of importance to say, they still say much, and say it guardedly. Academic economists can’t shake themselves free of the habit of expressing themselves in ways to avoid impolitic mistakes.

Clarity, a Sine Qua Non

Life in the cloister insulates one from having to deal with challenges effecting a majority of humankind. To reach the goal of sensible specialized writing, “we also need to connect our academics to the real world rather than trying to free them from it,” suggests Jack Stilgoe, a Senior Lecturer in the Department of Science and Technology Studies at University College London.

Scientists going at each other, debating opposing points of view, is par for the course. It’s one way theories and hypotheses get tested and perhaps proven—part of the scientific method. Fortunately for real scientists, they can slug it out in the laboratory or in the field. Unfortunately for economists, they can not.

It’s like the blind men and the elephant, each specialist defining the whole by the part that matters most to them. Even those who seek to know how economies operate miss the stream of spending for nature and what it means to the rest of the economy. Writing non-clearly allows and reinforces thinking non-clearly—which helps explain why economics in particular and social studies in general are such a mess.

If any discipline needs sound data and logical argumentation it’s one which can not conduct experiments. Real sciences can make predictions and conduct experiments. Yet they still take measurements quite seriously (maybe because they can). Economists cite some statistics, such as they as are (Ch 17), but that’s far from foolproof. Hence they can believe and espouse anything—and do.

Universities make scholars study statistics and other things that their phones can do for them. What if, instead, they made students study writing? How to compose a clear sentence, and how to write intriguingly. If academics wrote more clearly, would they think more clearly? I bet they would. You should’ve seen my thinking before I started writing.

This article is Part 16 of a series highlighting the forthcoming book, “Bounty Hunter: a gadfly’s quest to know the worth of Earth,” by Jeffery J. Smith. To date, the experts have not risen to meet the challenge. Indeed, some have even stood in the way. Yet the payoff for knowing this datum is huge.

Find Out More.
Inside information on economics, society, nature, and technology.
Jeffery J. Smith

JEFFERY J. SMITH published The Geonomist, which won a California GreenLight Award, has appeared in both the popular press (e.g.,TruthOut) and academic journals (e.g., USC's “Planning and Markets”), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland's mass transit agency), and recruited activists and academics to A member of the International Society for Ecological Economics and of Mensa, he lives in Mexico. Jeffery formerly was Chief Editor at