What can economics learn from medicine?
By Peter Swann
[Editor’s note: G.M. Peter Swann is Emeritus Professor of Industrial Economics at Nottingham University Business School]
Arnold Harberger once said that, when he thought about economics as a discipline that also has practitioners, “the analogy I like best is with medicine … a profession with one foot planted in medical science, the other in what we know as the practice of medicine.”1 And Keynes famously suggested that, “if economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!”2 If the analogy with medicine and dentistry was good enough for Harberger and Keynes, then it is good enough for me.
Nevertheless, we should be clear that there are some fundamental differences between economics and medicine. This point has been well made in a thoughtful piece on the RWER Blog by Peter Radford.3 Therefore, I shall limit myself to listing five things that economics can usefully learn from medicine.4
First, it is widely recognised that medicine is not a single discipline, but a federation of semi-autonomous sub-disciplines.5 Indeed, this is true of many other disciplines too, including: physics, chemistry, neuroscience, materials science, cognitive science, computing, geography, history, and business studies. Medicine is one of the best examples of a federation, because the sub-disciplines enjoy (and need) some autonomy but adopt common standards to facilitate trade between them. In comparison, the economics discipline appears to be much closer to the unitary state model of an academic discipline. True, there are sub-disciplines, but they have little autonomy, and are expected to conform to the methodological standards of mainstream economics. Many of the problems recognised by critics of the mainstream, and by practitioners and those who use economics, would be easier to solve if economics were such a federation.
Second, many of the problems identified by critics stem from an inadequate empirical foundation to economics. Within the medical federation are three absolutely fundamental empirical sciences that are required knowledge for all who practice, study or research medicine: anatomy, physiology and pathology. They are sometimes called the ‘three eldest daughters of mother medicine’. They are heavily empirical, they involve detailed direct observation and description, and they underpin many of the other medical sub-disciplines. In comparison, the study of economic anatomy (structure) is sketchy, and the study of economic pathology (disease) is very underdeveloped. Indeed, one leading perspective asserts that pathological conditions are rare in free markets. Granted, the study of economic physiology (function) is very well developed (e.g. production functions, demand functions, and so on), but it is a ‘black box’ version of economic physiology, that rarely builds on economic anatomy. The dominant empirical technique in economics is econometrics, which uses indirect inference rather than direct description, and is therefore very different from anatomy.
Third, in addition to these three fundamental sciences, the federation contains a variety of sciences formed by the fusion of two disciplines (e.g. biochemistry), and a wider variety of complex hybrid sub-disciplines. I don’t suggest that there is, or should be, an economic equivalent to each and every one of these. But economics would benefit enormously and would be far better placed to answer some of the criticisms it faces, if hybrids like these were to emerge within the economics federation. Why is that? Other disciplines criticise economics because, despite the fact that trade plays an essential role in the economy, the economics discipline does not seem to recognise the importance of trade with other disciplines.
Fourth, as noted in the earlier quotation from Harberger, one thing that medicine and economics have in common is that they both have scientists and practitioners, though the nature and number of these practitioners is very different in the two cases. It is instructive to compare the extent of scientific interaction between practitioners and scientists in the two disciplines: this interaction appears to be markedly better developed in medicine that in economics. Within medicine, indeed, there are some sub-disciplines that build on collaboration between practitioners and medical academic, but that seems much less common in economics. I have been involved in several such collaborations and am clear that they offer exceptional opportunities to learn things that cannot be learned from conventional academic research. Collaborations of this sort could deal with many of the criticisms of economics emanating from business and government.
Fifth, and finally, to borrow the words of John Donne, no discipline “is an island”. What is expected of a discipline is not simply what the scholars of that discipline want to do in their discipline. There are wider social expectations which are discussed, informally at least, in a form of social contract. Medicine appears to have a good, though not perfect, understanding of the social contract governing their disciplines. But in economics, the picture is mixed: some economists appear to be sensitive to this social contract, while others appear to have little interest in what the wider world wants from economics.
I believe the idea of a federation can in principle offer the best of both worlds. It allows the core of the discipline to follow its traditional research approach, while creating new sub-disciplines to do the things that the core cannot do, and does not want to do. I understand that some researchers and practitioners from the core sub-disciplines may be sceptical about some of the new sub-disciplines. But there is a simple test of the usefulness of the latter: can they provide empirical methods or theoretical advances that work better than available methods in the core? If so, then they have earned their place.
- Harberger, A.C. (1993), ‘The Search for Relevance in Economics’, American Economic Review, Papers and Proceedings, 83 (2), 1–16
- Keynes, J.M. (1930/1963), ‘Economic Possibilities for our Grandchildren’, in J.M. Keynes (ed.), Essays in Persuasion, New York: W. W. Norton & Co., pp. 358–73
- Radford, P. (2014), “Is Medicine a Model for Ethics in Economics?”, Real World Economics Review Blog, rwer.wordpress.com/2014/02/24/is-medicine-a-model-for-ethics-in-economics/
- These are discussed in greater depth by Swann, G.M.P. (2019), Economics as Anatomy: Radical Innovation in Empirical Economics, Cheltenham: Edward Elgar Publishing
- Bucher, R. and A. Strauss (1961), ‘Professions in Process’, American Journal of Sociology, 66 (4), 325–34. Klein, J.T. (1993), ‘Blurring, Cracking and Crossing: Permeation and the Fracturing of Discipline’, in E. Messer-Davidow, D.R. Shumway and D. Sylvan (eds.), Knowledges: Historical and Critical Studies in Disciplinarity, Charlottesville: University Press of Virginia, pp. 185–211.
From: pp.4-5 of WEA Commentaries 9(1), April 2019