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INTERVIEWS
WITH ECONOMISTS
JOHN
QUIGGIN
John
Quiggin is an Australian Research Council Senior Fellow, based
at the Australian National University. He also writes a fortnightly
opinion column for the Australian Financial Review. He has previously
held positions at a number of Australian and US universities and
at the Australian Bureau of Agricultural and Resource Economics.
Professor Quiggin has worked in fields including risk analysis,
production economics, the theory of economic growth and environmental
economics. He is also prominent as a commentator on policy topics
including unemployment policy, microeconomic reform, privatisation
and competitive tendering.
What
is it about economics that attracted you to the profession?
The fact that I could use a wide range of skills (mathematical,
literary and logical reasoning skills) in a way that made a difference
(hopefully for the better) to people's lives. In particular, I've
always been concerned about social inequality and unemployment
and I feel that the answers to these problems are largely in the
area of economic policy.
What
do you think of the public perception of economics and economists?
Unfortunately,
the public perception in Australia is rather negative. I think
the excessively dogmatic application of free-market principles
(commonly, if misleadingly, known as 'economic rationalism') has
led to a view that economists are more concerned about narrow
notions of efficiency than about the realities of people's lives.
This isn't, or at least shouldn't be, the case.
What do you think of the current direction of economics?
There are lots of interesting developments in economics at present.
Economists are increasingly coming to grips with problems they
have previously neglected, such as the way in which institutions
work, and the role of 'non-economic' factors like altruism and
commitment. These developments haven't had much of an effect on
economic policy as yet.
What do you think is the role of an economist?
Economists must first try to understand the economy better, then
try to translate that understanding into a contribution to the
public debate over social and economic issues. There is a tendency
for some economists to specialise in research, and cut themselves
off from the policy debate, while those involved in making public
policy fail to keep up with research developments. I think this
is unfortunate.
Is economics today different from what it was 50 years ago?
The most important difference is that 50 years ago, Keynesian
ideas about macroeconomic policy were just coming to dominate
the thinking of the profession. Keynes argued that governments
could maintain full employment by raising public spending in periods
of depression. This approach seemed to work very well for about
25 years, up to the early 1970s. In the last 25 years, Keynesian
policies haven't worked very well, but we have yet to find an
adequate alternative.
At the higher academic levels, economics is now much more mathematical
than it used to be. On the whole this is a positive development,
but it sometimes leads to people practising abstract mathematical
theory for its own sake.
What contribution can economics make to current policy debates?
Most current policy debates (even those on social issues like
crime, drugs and homelessness) have significant economic components.
Carefully applied economic reasoning can help to produce better
policy outcomes and avoid unintended consequences that arise when
people respond to the changes in rules and incentives created
by policy changes. Unfortunately, this doesn't always happen.
Sometimes economic arguments are ignored because they conflict
with powerful interests. At other times, wishful thinking on the
part of economists committed to free-market reform has led to
mistaken policies. Both of these tendencies can be seen in Australian
telecommunications and media policies.
What advice would you have for current students in economics?
First, remember that economics matters to people's lives and that
getting economic policies right makes a big difference to our
success or failure as a society. Bearing that in mind, don't be
put off by the seemingly abstract nature of economic theory, and
by the need to use mathematical reasoning. The tools of economic
analysis provide a very powerful way of understanding what is
going on in society, and how to produce better economic and social
outcomes for everyone.
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