In today’s world, next to the politicians, the most powerful men and women have been the group of people who call themselves ‘economists’. Raised in the citadels of universities and premium institutions they emerge in the open world occupying key positions, making themselves indispensable and invincible. They are everywhere and in every sector ~ advising sovereign governm – ents, international institutions, corporates, academic and financial institutions, NGOs, miscellaneous organizations and individuals. Nothing moves in this world without the advice of economic and financial experts.

Economists in the World Bank and the International Monetary Fund (IMF) have appointed them selves as guardians of the world economy. They determine the principles of economic policies (like Millennium Development Goals ~ MDGs ~ to be completed by 2015), which member-States are expected to follow, also monitoring their economic trajectories. Their advice, even if they go wrong, is never challenged While my own life has largely been shaped by the discipline of economics as a student, teacher and researcher, I must confess I could never fall in love with the subject.

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Why I could not align myself with the community of economists could be attributed to two main reasons. First, I could not reconcile myself with the effort of elevating the discipline of economics to the level of pure science breaking away from the tag of a social science and the discipline of political science prompting universities to award Bachelor of Science and Master of Science degrees to students taking economics as the main subject. My second concern has been that economists (not all but a great number of them) have done more harm to the world than good. This may be construed by many as an anti-academic tirade and I may be accused of making an unprofessional, irresponsible statement amounting to character assassination. But the fact remains that economics cannot be considered a true science because economic theories can never be experimented in a scientific laboratory and the outcomes cannot be predicted as they concern complex human and social behaviour. Experiments of economic theories conducted in the ‘social laboratory’ more often than not prove to be wrong giving varying results.

About a hundred top economists including dozens of Nobel Prize winners living in the USA and their models could not predict the 2008- meltdown, the worst economic crisis in human history. This puts a question mark on the true utility of economic predictions for social good. Random and large-scale induction of mathematical and statistical tools, equations and formulae along with elements of psychology and sociology has made economics a hybrid and overrated discipline. Introduction of a ‘Nobel Prize’ in economics has added extra glamour to the discipline giving all-knowing economists an unintended glory and dignity and also over-confidence (or arrogance). The discipline of economics owes its origin to Adam Smith (1723-1790), a professor of Moral Philosophy at the University of Glasgow who published two revolutionary books ~ The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The Wealth of Nations is considered to be the first treatise on economics and Adam Smith is regarded as the “Father of Economics” and “The Father of Capitalism.”

Adam Smith advocated a laissez faire (leave alone) economy against the existing mercantilism, with least interference from the government. Smith did introduce in his theory an element of morality and philosophy taking a leaf from his earlier book, The Theory of Moral Sentiments. According to him, “enlightened self-interest” of the entrepreneurs and “the invisible hand” of the free market would create more wealth, employm – ent and prosperity for the nation. Written 250 years ago, The Wealth of Nations still remains an immensely readable and relevant book, which laid the foundation of the discipline of economics, the nomenclature of which had been “Political Economy.” Classical economists inclu – ding Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus and John Stuart Mill dealt with various economic issues as part of political economy as economics as a distinct discipline was yet to be recognized.

None of them studied economics as an academic subject; they were all either philosophers, clerics, civil servants, politicians or political economists. Jean-Baptiste Say (1767-1832), a French cleric, political economist and businessman, known for his ‘Say’s Law’ (supply creates its own demand) was in favour of competition and free trade. David Ricardo (1772-1823), a politician and a member of the British Parliament, formulated theories of wages, labour, profits, value and the famous theory of Comparative Advantage for foreign trade, influenced a generation of economists.

Thomas Robert Malthus (1766-1834), an Anglican cleric and political economist created a sensation by his book on human geography, An Essay on the Principle of Population (1798) which predicted what is known as the “Malthusian catastrophe.” John Stuart Mill (1806-1873), philosopher, poli – ti cian, political economist and a civil servant had been a great social influencer of the time. Along with Jeremy Bentham, Mill had been a forerunner in socialist thinking as evident from his theory of Utilitarianism in economics ~ ‘maximum good for the maximum number.’ Modern economics took its roots from the neo-Classical economists pioneered by Alfred Marshall (1842-1924). Marshall had basically been a mathematician (receiver of Cambridge Mathematical Tripos) and a student of physics but owing to a psychological crisis, he turned to philosophy, metaphysics and ethics, which in turn led him to economics. Starting as a lecturer in moral sciences, he became the principal of the University College, Bristol and later a professor of political economy in Cambridge University, a position he held till his retirement in 1908.

He was succeeded by two of his disciples and well-known economists ~ Arthur Cecil Pigou and John Maynard Keynes. Of the neo-classical economists, Alfred Marshall had been the doyen and quite a phenomenon. He is regarded as the ‘father of modern economics’ and his magnum opus, Principles of Economics (1890 ~ 750 pages growing up to 870 pages in eight editions) had been the basic textbook of economics in the English-speaking countries for a long time and established his world-wide reputation. Marshall planned to write the book in two volumes ~ volume-I on theories of micro-economics and volume II on Macro economics; however volume II of the Principles was never published. In the Principles, Marshall developed the microeconomic concepts and theories (explained a few in graphical forms) of demand and supply, elasticity, marginal utility, consumer surplus, cost of production, increasing and diminishing returns etc. covering the three divisions of micro economics ~ consumption, production and distribution. Marshall had been the first scholar to offer a definition of economics. Marshall said, “economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of material requisites of wellbeing…It is on the one side a study of wealth and on other side, a study of human welfare based on wealth.”

One significant aspect of Marshallian economics has been that while Marshall took economics to a ‘more mathematically rigorous level,’ he never wanted ‘mathematics to overshadow economics and thus make economics irrelevant to the layman.’ Notwithstanding a strong mathematical background, Marshall refrained from using mathematical tools in the text of his Principles of Economics and put all the mathematical formulations in the appendices and the footnotes for scholars.

He said, “Use mathematics as a shorthand language rather than as an engine of enquiry…Keep to them till you have done… illustrate by examples that are important in real life …Burn the mathematics” (letter to A L Bowley). Today’s economists will tend to violently disagree with him. Recognizing that any scientific discipline like economics evolves as a result of contributions from many, Marshall, however, downplayed the contributions of other contemporary economists like Leon Walrus, Vilfredo Pareto, Jules Dupuit and Stanley Jevons, whose ideas were found assimilated in his Principles.

(The writer is a former Dy. Comptroller & Auditor General of India and a former Ombudsman of Reserve Bank of India. He is also a writer of several books and can be reached at brahmas@gmail.com)