Recent commentary and analysis: nuclear, Eskom and Molefe

I’ve recently provided commentary and analysis on the somewhat related issues of Brian Molefe’s reappointment as CEO of (South Africa’s national power utility) Eskom, as well as the case against procurement of nuclear energy. An argument that has emerged from Molefe’s backers is that he ‘turned-around’ Eskom during his tenure, while allegations against him remain unproven. Leaving aside the latter claim, in a recent op-ed I argue the credit given to Molefe for the end of load shedding and improvements in certain financial ratios is misplaced. A number of analysts had noted the role of falling demand in ending load shedding, but less attention has been given to the scale and significance of the financial support Eskom received from national government in 2015.

While my preference is to focus on the public finance and public economics dimensions, in the current context one cannot ignore political economy issues. I note here that Molefe’s reappointment is not just concerning for given his alleged improprieties, but more so because of what it implies about the failure of a much wider range of accountability mechanisms that should be keeping dysfunction at Eskom in check.

The failure of those mechanisms has been linked to various vested interests and the push to procure a fleet of nuclear power stations. I’ve previously written on why the current case for nuclear procurement is weak, as are previous, vague claims from Eskom that it can finance the project itself. So I was glad to be invited to debate some of these issues at the recent Nuclear Power Africa stream at Africa Utility Week. (Unfortunately, at the last minute Molefe and Minister Lynne Brown cancelled their scheduled attendance at the conference). As far as I could tell, I was the only panel member who argued that the case for nuclear was weak; given that I was also one of the few who did not have a direct vested interest in nuclear procurement proceeding, this is perhaps not surprising. The range of vested interests – some explicit, others concealed – keeps growing, and that presents its own challenges.

This is the one-page summary I used for my presentation:

Nuclear_AUW2017_SMM(There’s some fun to be had adding more arrows, linking the various issues).

What was clear from the sessions across the day is that, as captured by one report, after a number of setbacks the various nuclear interests (politicians, bureaucrats, academics, utilities and consultants) are ‘regrouping’. The dominant tenor of the talks was that ‘we need to get the broader public to understand why nuclear is good for them’, and that critics – whether energy experts or economists – are simply misguided.

Suffice to say that while the various arguments for immediate nuclear procurement continue to shift and evolve, having listened carefully to them my own view is that they remain unconvincing. I’ll summarise some of the more important areas of contention in my next post, along with some interesting new arguments and why they are flawed.

Statement regarding the Parliamentary Budget Office and recent CCMA award

The Parliamentary Budget Office (PBO) was established to provide Parliament with independent technical advice to support it in exercising oversight of public finances. The importance of this role should be evident given the recent Cabinet reshuffle and ratings agency downgrades, which have raised concerns about public debt, public service pension funds, a prospective nuclear deal and the finances of state-owned enterprises amongst others. These are all matters about which a functioning PBO would be expected to provide credible insight and guidance to Parliamentarians.

There are, however, serious concerns regarding the functioning of the Office. These relate to the content and objectivity of its advice. This became apparent to me shortly after I joined the PBO in 2014. The resulting dynamics in the office led me to resign in 2016, and were also the basis for an unfair labour practice complaint brought against the PBO at the CCMA.

On the 26th of April 2017 the CCMA issued the commissioner’s award, which did not find in my favour on the narrow labour issues raised. While I am disappointed with this outcome, it is important to place the case in the broader context of the need for a competent, functional and credible PBO that is beyond reproach. In this regard, the Commissioner held that – as I had testified – the Director of the PBO had indeed offered to provide me with the interview questions for the position, I had declined the offer, and he had lied about this in his testimony (i.e. under oath). This example was only one of a number of issues raised in the process, but on its own raises very serious questions about the functioning and management of the office.

The Act governing the PBO is expected to be reviewed and amended later this year. In that process, the end goal must remain paramount: to build an independent, technically and ethically credible institution that the public and Members of Parliament can rely on for non-partisan analysis of public finance issues that is conducted without fear or favour.

Internationally, similar institutions are expected to maintain the highest standards of objectivity and political neutrality; standards that the South African PBO has failed to demonstrate. Perhaps the most famous international example is the Canadian PBO, which in 2011 produced a costing for parliamentarians of the government’s fighter jet procurement plan that was significantly higher than the estimates the government had published. The Office was attacked by the Prime Minister at the time, but supported by society at large and subsequently vindicated: government eventually acknowledged that the costs were higher than originally stated and the procurement remains on hold. The Canadian example is in marked contrast to the South African PBO’s analysis of the desirability and feasibility of the proposed nuclear energy procurement. The PBO’s report failed to cost the project, or assess its implications for public finances. In a more recent example from Kenya, the country’s PBO raised concerns about omission of a large increase in debt repayments from budget documents.

Since some of the issues raised at the CCMA go to the heart of these expectations, and it is my view that the basis for its finding is deeply and materially flawed, I am considering taking the award on review to the Labour Court. This is an expensive option – the estimated cost is R500,000 or more, and is prohibitive for an individual. However, the basis on which staff are appointed to, and promoted in, PBOs is one of the most critical factors in their success. Combined with the importance of the PBO and the upcoming amendment of its governing legislation, public interest organisations may find this case to be an appropriate mechanism through which to contribute to the establishment of the kind of PBO the country deserves.

Some thoughts on the Finance Minister’s adviser and his critics

The debate around the new Finance Minister Malusi Gigaba’s new adviser, Chris Malikane, has gone beyond the deeply flawed proposals he has made, to claims about his academic credentials and integrity. I want to agree that the proposals are flawed, but that some of the attacks on Malikane are as well. Furthermore, they draw attention to some serious issues in South African academic economics that require mature discussion.

Most of the 8-page ‘manifesto’ published, and extensively publicised in various articles and interviews by Malikane, is not worthy of serious analysis. (Although one effort to take it seriously, by Charles Simkins, is worth reading – as is the more acerbic piece by Richard Poplak). It is primarily a political document and contains no substantive content relating to economic policy and public finance. There’s a crude Marxist analysis of class, and a shopping list of things that should be nationalised and services that should be provided. The only interesting assertion is that the working class should throw their weight behind those black South Africans who have become an elite through corrupt government tenders, rather than through credit-based black empowerment schemes. Like the other assertions, no serious justification is provided. But it certainly explains why Malikane’s radicalism has found favour with Gigaba, whose predecessor appeared to be successfully blocking a range of efforts at tender-related corruption by individuals associated either with the President or the Gupta family. The thinking from Gigaba – a man better known by some for tabloid stories, tailored suits, expensive ties and appearances on Top Billing – may have been that Malikane would provide some solidity to the fig leaf of ‘radical economic transformation’, while Malikane – who has otherwise been quietly exerting influence in left-wing, or trade union movements for some time – clearly thought that his revolutionary moment had arrived.

Some have attempted to defend Malikane on the basis of his academic credentials – to the point of also insisting that his evidently wrong-headed proposals (such as ‘expropriating banks’) cannot be criticised except through detailed academic analysis. At which point it is useful to invoke a phrase attributed to the Italian computer programmer Alberto Brandolini: “The amount of energy needed to refute bullshit is an order of magnitude bigger than to produce it”. Just because the minister’s adviser has published some academic papers on other subjects does not mean we must presume that his manifesto carries additional weight. Indeed, the primary disappointment for many who had  reasonably high opinion of Malikane up to this point is quite how threadbare his analysis and proposals are.

Where things are getting messy, however, is in attacks on Malikane’s academic credentials. These in fact open-up a big can of worms regarding the state of South African academic economics. (One reason I have been delayed in writing a comment on the Malikane’s saga is that I had been drafting a conference paper on what ‘decolonisation of the curriculum’ might mean for South African economics).

Understanding Peer Review in Economics

It turns out that the issue of decolonising economics is closely related to some of the misguided aspects of attacks on Malikane. The first, by Stuart Theobald, starts off well enough by noting that Malikane’s published, peer-reviewed work either has relatively little relation to his recent arguments or even – in some cases – seems to contradict those arguments. This is a particularly useful point to make for those who, naively, argue that Malikane’s arguments must be substantive because he has published some academic papers. Where Theobald strays into dangerous territory is in his inferences about Malikane’s integrity and assertions about the wonders of academic peer review.

Theobald’s characterisation of peer review in economics makes me suspect that he has never published anything in the discipline. Very few academics I have come across or read, including Nobel prize winners, have such a rosy view of the peer review process; in practice it is far from the notional ideal of a meritocratic system in which originality and quality are what determine publication. And any problems – of cronyism, bias toward researchers in certain institutions, ideological influences and so forth – are amplified if the basic thrust of your work is critical of, or very different to, the dominant narrative. It does not surprise me that Theobald, given his demographic, views on economic policy and his area of work (banking and finance), might not be able to appreciate this.

Which brings us to the issue of whether Malikane is dishonest for publishing work with conclusions he does not agree with. My short answer: no. It might be inadvisable, and it is something I personally try to avoid doing (at some cost), but the system is structured in such a way that it can self-sabotaging to only publish what you believe rather than what you can do. (Some have suggested that there should be betting markets in which economists show their confidence in their empirical claims by putting money on it). Either you will publish in journals not recognised by your peers, or your career will stall at a junior level – and the associated administration and teaching burdens limiting the very time you need for that ‘against the current’ research that is so good it breaks into the mainstream. When co-authors are involved this is even more difficult. These challenges are essentially what Malikane is gesturing at when he says, quoted by Theobald:

Don’t confuse my academic writing and what I believe to be true…you know the business of publishing is so ideologically poisoned that what is published is not necessarily scientific…we sometimes write in order to simply play in the publishing game…not necessarily because we think what we publish is correct…there is heavy ideological repression in academia…

Theobald paints this as sinister and possibly an “act of intellectual dishonesty”. He softens that with a few acknowledgements that Malikane is basically right, but then returns to a naive notion of academic publishing.

Finally, Theobald makes the important point that we should not try and judge Malikane the person but rather “whether he has good evidence and reasoning for his claims”. Unfortunately, he then goes completely off the rails by saying that: “until [Malikane] publishes them in a way that involves assessment by his peers, we must assume he does not”. Which peers? In what journal? I doubt Malikane would have trouble publishing in the Review of African Political Economy, but would Theobald accept that as adequate? (Leaving aside that he is not an academic economist, so it’s not clear what basis he would use).

Regardless, as an academic economist who has also worked in the public sector, I would never accept a policy claim just because someone had managed to publish a paper on it; the idea that successful peer review in economics shows that a claim is ’right’ is completely misguided, and any economist who advised a minister on that basis should also be fired.

There Are Many Flavours of ‘Bogus Economist’

This usefully brings us to the even more problematic contribution by Co-Pierre Georg. Let me start by saying that I was interested, albeit surprised to see – in Georg’s somewhat crudely-stated concern about ‘white male patriarchs’ – channelling critiques I myself have made in the past of untransformed gerontocracies and academics behaving like rent seekers. I have, also, for some time been politely raising concerns with various role players about such dynamics at an organisation where Georg has been an associate for some time; I hope Georg is as vocal on such matters of principle within his institutions, and even when it is personally inconvenient.

The basic assertion of Georg’s article is that people should not trust ‘bogus economists’. Hard to disagree with, but the devil is in the detail. In my draft conference paper on decolonisation, I made some similar critiques of the quality of the local academic economics to those discussed by Georg. Beyond that, though, we are again in swampy terrain. Georg’s assertion basically translates as: ‘people should not trust economists I think are bogus, which obviously doesn’t include me, my co-authors, patrons, friends, etc’. It’s not a new trick, including for fake radicals in economics. In a recent comment an otherwise respected senior scholar in macroeconomics (Paul Romer) published a rather disgraceful attack on various other economists for what he calls ‘mathiness’. Among these was one of the most famous female economists of the 20th century, Joan Robinson, who by virtue of her gender, left-wing views, and being dead, was perhaps an obvious target for Romer. Critiques of excessive or inappropriate use of mathematics in economics are as old as the modern version of the discipline itself. But a close reading of Romer’s critique reveals a petty, self-serving definition of the crime: when economists he doesn’t like use mathematics they are guilty of mathiness, whereas when economists he does like (obviously including himself) use mathematics then it’s done properly. Georg’s argument boils down to a similarly crude skeleton. (Romer, incidentally, was then appointed chief economist at the World Bank – illustrating how dysfunctional economics can be in other places).

Furthermore, Georg peddles a version of how economics can inform policy that is popular with certain types of academic economists, but bears little relation to reality. In this model, people who can write the most complex mathematical equations, estimate the most complex econometric models and get published in high-ranked journals are best-positioned to advise on policy. This might be funny if it were not so misguided and, in its own way, dangerous. There are some individuals who have managed to make the transition from producing cutting-edge academic work (by mainstream standards) to giving good policy advice, but it is the exception rather than the norm. The last thing a finance minister needs is some social incompetent who thinks he can figure-out a policy solution by writing down an equation, running a model or looking for a ‘peer-reviewed solution’. If you need an academic perspective, your adviser talks to a deputy director general who gets someone in the research cluster to do it, or outsources it to an academic like Georg.

Yet Georg goes even further, offering to define for us what a ‘proper academic’ is. But the best he can do in this regard, like Theobald, is to refer to ‘peer review’. I have already made clear that this is a naïve, and in Georg’s case arguably self-serving, use of the notion of peer review. One can tell that Georg, like Theobald, is not exactly familiar with the challenges of swimming against the current. Or, in fact, advising on broad economic policy in the complex South African terrain.

A Necessary Debate

 In some ways, the great tragedy of the Malikane saga is that, in principle, he should have been in a position to be a very good adviser – albeit one with strong left-wing views. While the likes of Theobald and Georg might be good advisors at lower levels of the hierarchy on specific issues relating to banking and finance, Malikane’s broad credentials should have made him a better choice for a general adviser to a minister. Given that, fortunately, it looks like his manifesto will have no impact whatsoever – with various politicians suddenly realising that talking-up radical economic transformation is a bad idea if it means emptying the fiscus you had planned on appropriating – the most harm done is to Malikane himself. But he has also damaged the possibility of more open discussions about economic and fiscal policy, which means that in fact those who should be most angry with him are economists (including myself) who believe such a conversation is sorely needed.

The bigger picture that Theobald and Georg’s misplaced attacks draw attention to is the state of South African academic economics. Some time ago as a student I witnessed the destructive consequences of the failure by some, otherwise very respectable, academics to reconcile tensions within the local discipline. The result, I think, has been for many to bury their heads in the sand and hope for the best. Or, less innocently, to set-up fiefdoms in which they can propagate their own views and agendas without the inconvenience of differing views.

To be fair to economists, similar behaviour happens in a range of other South African academic disciplines. However, besides the fact that this is an unhealthy state of affairs, legitimate calls for transformation and decolonisation (appropriately defined) will only ratchet-up these tensions and it would be best to address them openly and as maturely as we can. The position I have come to is in some ways rather obvious: we need to raise standards, but we also need a wide diversity of views and therefore should be pluralist in our approach to defining who is a competent economist (academic or otherwise). In that context, we would be advised to avoid doing things like accusing a fellow academic of not being a ‘proper economist’ or being ‘intellectually dishonest’, when they have a PhD from a very reputable North American institution, some competent publications, and extensive engagement and knowledge of South African civil society. When the institutional winds change, you may find that the knives are in your own back. These are surely not the kind of dynamics we want to encourage.

Reshuffles, downgrades and South Africa’s public finance drama

The last week has been tumultuous for many South Africans, not least if you are an economist concerned with public finances and the associated political economy dynamics. I had predicted that the President would make another attempt at a finance ministry-targeted reshuffle some time from the end of March onwards. The basis for that prediction was the timing of Parliament’s recess period, as I discuss in greater detail in this article.

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Zapiro: “Shift happens”

The new Minister has been brought in on the back of the President’s (empty) rhetoric about ‘radical economic transformation’ to benefit the majority of poor, black South Africans, but he is known more for his snappy dressing than radicalism; if the FT is correct about his favoured brand, then two of his many ties would equate to the proposed new monthly minimum wage. The combination of supposedly radical rhetoric with personal profligacy is on its own questionable, but there are many more reasons to be concerned.

It was therefore not a great surprise to many analysts when S&P downgraded South Africa’s foreign currency sovereign debt rating to sub-investment grade (‘junk’). After the downgrade by S&P, which I had also expected having paid close attention to presentations at their one-day conference in Johannesburg only a couple of weeks earlier, I provided some commentary with an emphasis on the reasons for the downgrade and possible economics and public finance implications. One of these interviews, with Ayabonga Cawe at PowerFM, is available here. In the first interview I did, on KayaFM, I made a deliberate point of stating that we should not allow anyone to mystify the obvious: that Gordhan has been removed for similar reasons to Nene, implying ‘capture of the state’ (as per the Public Protector’s report). In that context, the new finance minister simply lacks credibility and any statements made about continuity and protecting the fiscus will likely be taken with a pinch of salt.

With the inconvenient oversight of Minister Gordhan removed, the South African Revenue Services announced its final revenue collection figures for 2016/17 in a chummy press conference with the new Minister. This attempted to paint a R30bn revenue undercollection (relative to the revenue forecast in the 2016 Budget) as a success, because it exceeded the 2017 Budget forecast (i.e. the one revised down by R30bn) by R0.0003bn… Unfortunately, many journalists reporting on that event were taken in by the claims of success. I had already dealt with much of this in an article in the Finance Mail. In fact, given concerns about SARS delaying refunds to inflate collection figures, and given inadequate data submitted to Parliament, I have submitted a formal request for more detailed data to SARS and hope to follow-up on that in due course.

Needless to say, the capture of the Finance Ministry makes Parliament’s oversight role even more critical. But as I have argued in some detail (here and here), and ventilated in my CCMA case, the Parliamentary Budget Office is neither equipped, nor inclined, to provide the robust analytical support expected of it under the Money Bills Act (2009). I will have more to say about this in due course.

After the decision by S&P, Fitch has now also downgraded South Africa’s foreign and local currency sovereign debt rating: setting the stage for more dramatic consequences if another agency also downgrades local currency debt to ‘junk’.

These are dangerous times for the South African fiscus, economy and society at large.

Presentation to Parliament’s finance committees

I am now affiliated to the new Public and Environmental Economics Research Centre (PEERC) at the University of Johannesburg, within which I intend to continue putting my public finance and public economics knowledge to good use.

As already noted, I recently published an article on the legislative process that guides the adoption of Budget proposals by Parliament.

And this week, along with my colleague Jugal Mahabir (who has experience at National Treasury and the Financial and Fiscal Commission), we made a short presentation to the finance committees on the fiscal framework and revenue proposals.

The time available (4-5 days between the tabling of the Budget and the submission of public comment) limits the depth and sophistication of the analysis, but with greater preparation this is something I hope to improve on at each successive iteration.

Parliament has the final say on the Budget

Ahead of the Minister of Finance’s Budget Speech tomorrow, I’ve just published a piece in The Conversation, explaining the core components of South Africa’s annual Budget and the fact that Parliament ultimately has the final say on each of these – subject to a public consultation process. The full process is guided by the Money Bills Amendment Procedure and Related Matters Act (2009), which I worked with extensively when I was at the Parliamentary Budget Office.

The conclusion of the article, that Parliament’s oversight may provide some reassurance in the current political context, is less comforting in light of an article published today which reveals that a vacancy has suddenly been created on the standing committee of finance. The last time that happened was when the then ANC whip of the committee, Des Van Rooyen, was notoriously made Minister of Finance for a weekend. It appears likely that Brian Molefe, former CEO of Eskom who is named dozens of times in the Public Protector’s ‘State of Capture’ Report, will be appointed to this vacancy – having been surreptitiously added to the ANC’s list of MPs. And this in turn may be a stepping stone to his appointment to cabinet in a last ditch attempt, by a faction close to the president, to take control of public finances for nefarious ends.

Jacob Zuma, Stratfor and Naspers

I just had a piece published by Pambazuka, in which I critically assess claims that President Jacob Zuma is a victim of ‘white monopoly capital’ and ‘Western intelligence agencies’; the evidence suggests a very different conclusion.

A few investigative newspaper articles, combined with Stratfor emails leaked by Wikileaks suggest a relatively close relationship between Zuma and Stratfor (an infamous, private agency closely linked to US intelligence agencies). Furthermore, Zuma has continually taken actions – even against his own party’s policies – that have significantly benefitted Naspers (an oligopolistic operator, originating in apartheid, in the media space, with a virtual monopoly in paid TV in South Africa). Finally, Zuma has made a number of statements himself that appear to demonise poor South Africans: depicting them as lazy and entitled. This last point also contradicts the resurrected narrative of ‘radical economic transformation’, on which I will publish a separate piece soon.

The Wikileaks cables are a treasure trove on the Zuma-Stratfor link and it seems appropriate to ask why there has been so little reporting on that. Similar issues arise around the Naspers link.

I copy-in below a version of the Pambazuka article with hyperlinks for those who are interested in sources and reading further.

Continue reading “Jacob Zuma, Stratfor and Naspers”

Placeholder: A South African economics curriculum

In some previous posts [here and here] I discussed my experience of, and thoughts about, the University of Cape Town (UCT)’s undergraduate economics curriculum. I committed to writing a final, constructive post on what I think a South African economics curriculum (not particularly limited to UCT, or undergraduates) should look like.

That intention was partly overtaken by events and time constraints, but mainly I decided that the question deserved more lengthy treatment than just a blog post. So I am drafting a paper, which I hope to present at a few, relevant conferences/workshops, and once that draft is completed I will post a summary here.

My case against the Parliamentary Budget Office: part II

As noted in a previous post, I am pursuing a case against the Parliamentary Budget Office at the CCMA.  And as also indicated in that post, I am not going to comment on any specific issues relating to the merits of the case, or the process, until the latter is completed. Nevertheless, given that the reporting of the matter has been intermittent and only partially informed, it is useful to recount some further, basic information here.

The most recent component of the hearing (day 5 and 6) took place on the 19th and 20th January, with the intention that the matter be completed on the 20th. Unfortunately that was not possible, for reasons which will become known in due course.

Media presence

More importantly, while the media were initially granted access, the two journalists present were requested to leave shortly after I started my cross-examination of the Director of the Office. The result is that the first two reports (News24 and Business Day) that did appear could effectively only report on 75% of the 5th day of the process and did not report any of the content of the Director’s cross-examination. One article reported the Director’s assertions, but not the testing of these assertions and more substantive issues; resulting in somewhat one-sided coverage.

While the media can only report what they observe, one might expect that the media’s (gentle) ejection from the process would be reported to at least provide readers with some context for the sudden cessation of coverage.

Meanwhile, in another case at the CCMA, the media have continued to be present despite the applicant (Mr Adrian Lackay) testifying to fairly sensitive matters, such as the alleged ‘rogue unit’ at the South African Revenue Services (SARS). Of course, every case is different and commissioners use their discretion to make such determinations. It is worth noting, though, that Lackay’s case led to the breaking of new ground on media access to CCMA arbitration thanks to work by Media24 and amaBhungane. Apparently the Commission has subsequently published rules and guidelines that formalised the position that public access, including media access, is the default. (Though many people, including legal practitioners, remain unaware of this).

Credibility

Naturally, when one raises matters like those that have emerged in this process, attacks on one’s credibility are par for the course. Exposing, directly or indirectly, the abuse of public resources and compromising of appointment processes to positions in public institutions is a sure way of engendering some hostility. In this instance, such attacks have come in blustered form within the process from Parliament’s representatives, statements by the Director (to the media and in testimony) and comments by one former colleague in testimony.

While such behaviour is to be expected, it remains very ill-advised to attack the credibility of someone who is, substantively, more credible than you are… In due course most of the truth about who acted professionally and ethically at the PBO, and who did not, will become known. It will then also become clear that serious action will be required to salvage some credibility for the institution.

A long road ahead

It is widely-accepted that independent fiscal institutions like parliamentary budget offices need to be beyond reproach:

the core values that IFIs both promote and operate under – independence, non-partisanship, transparency, and accountability – while demonstrating technical competence and producing relevant work of the highest quality that stands up to public scrutiny and informs the public debate (OECD Principles)

Unfortunately, it would appear that there is a long, difficult road ahead to achieve this in South Africa.

Economics: scientists and plumbers, or bullshit and mathiness?

On the 6th of January 2017 the Annual American Economic Association conference is scheduled to host a plenary address entitled The Economist as Plumber: Large Scale Experiments to Inform the Details of Policy Making. The speaker is the academic economist Esther Duflo, widely-acclaimed for popularising the use of randomised control trials (RCTs).

Given my PhD work in economics on external validity of RCTs and implications for policy, and parallel work in philosophy, I have a few thoughts on this subject. In a draft paper (first presented in 2015) entitled When is Economics Bullshit? I argue that practitioners promoting RCTs have systematically overstated the policy-relevance of results and thereby produced ‘bullshit’ (as defined in the famous essay by philosopher Harry Frankfurt).

A consistent problem in critiquing so-called ‘randomistas’ is that the goalposts have been constantly shifted. Early advocacy for RCTs within economics reflected a ‘missionary zeal’ (Bardhan). It has been suggested that experimental methods have led to a ‘credibility revolution‘: giving credibility to applied microeconomic work that apparently did not exist before. One recipient of the Bates Clarke medal argued that the introduction of RCTs indisputably rendered economics ‘a science’. In the policy domain I, along with other economists, have come across much grander and/or more extreme claims. But when challenged, proselytisers scale back the claims and deny ever overclaiming. So from missionary zeal, revolution and science we now have plumbing….

I look forward to reading Duflo’s speech/paper, but my own view of the methodology and philosophy of economics and RCTs suggests that plumbing is a very poor analogy.

In my own paper, motivated in part by claims that RCTs render economics ‘a science’, I tackle the question of scientific status head on. Using a revival of the so-called demarcation question (basically: how do we demarcate science from non-science or pseudoscience?) in philosophy, I argue that economics cannot (yet) be classified as a science, may never be classifiable as such and in the way it is used by some economists too-often verges on pseudoscience and/or bullshit.

The similarities between this very critical view and that of Romer’s recent critique of macroeconomics (which was made public later) are interesting. Romer focuses more on the use of mathematical modelling whereas my focus is on empirical methods. I will write a detailed comment on Romer’s piece later this year; I agree with some aspects but strongly disagree with others.

In its two presentations so far, my paper on bullshit has been relatively well-received by philosophers of science but not so well-received by philosophers of economics. There is good reason for this: the paper is even more an indictment of the current trend in philosophy of economics than it is of economics itself. The paper notes that in the absence of sufficient technical training and understanding of economics, philosophers in this area have increasingly taken the safer route of becoming apologists for the discipline. In effect, they compete to provide explanations of why economists are correct in their approach. (Exceptions to this, such as Nancy Cartwright – who has collaborated with Angus Deaton in providing important and influential critiques of RCTs – arguably prove the rule: Cartwright’s reputation was already established in philosophy of physics, causality and metaphysics).

The result, unfortunately, is that philosophy of economics currently has very little to add to economists’ critical understanding of their own discipline. Some critics, such as Skidelsky, argue that economists should read more philosophy, but while I am sympathetic to his overall stance I do not think economists would find much worth reading at present. Combining the abject failure of the ‘mainstream’ of philosophy of economics with the low quality of most economists’ reflections on methodological issues leaves us with few critical insights that could move the discipline beyond parochial or self-interested debates.