Is pandemic economics passé?

There is no doubt that we live in a unique historical moment. The question is whether the comparisons of the Covid 19 pandemic with the Spanish fever make sense, because the world today is so different from the one that was more than a century ago.

In interpreting this moment of civilization, it seems that economists are privileged in relation to intellectuals from other fields. Contrary to the general understanding, economics is an extremely sophisticated science, a very dynamic system of natural and social sciences that interact intensively with each other, and is therefore extremely demanding for study and scientific analysis. In addition to all the skills necessary for dealing with economics, it requires a special intuition and, as the famous classical economist Marshall wrote, a special, almost artistic sensibility of a researcher.

There are very few professional economists, but the questions they ask are of civilizational importance. One of the most influential economists of today, the American Nobel laureate Joseph Stiglitz, the former first economist of the World Bank, focuses on the problem of inequality within and between countries. Going on a virtual mission on the planet, Professor Stiglitz warns that these inequalities will become even greater and the global system unsustainable, if developed countries focus only on their own recovery from the consequences of the pandemic. Unfortunately, such trends are expected because for example, the US administration will first deal with the historically highest unemployment rate in the US since the Great Depression. Analyzing the official data, another leading American economist, Nobel laureate Paul Krugman, who deals with macroeconomic issues, even doubts the validity of those data. Professor Nouriel Roubini, known as Dr. Doomsday because he predicted the financial crisis in 2008 almost perfectly, is very pessimistic about the development of relations between the global powers, anticipating even very close "warm" contact between them.

A professional economist has the opportunity to analyze all this, and many other exact facts from a scientific aspect. That is the privilege of an intellectual, but it is also his destiny. Namely, as my great professor Radmila Stojanović said, who I am sure is the greatest Serbian economist ever, and probably one of the best in the former state - the economy is a subsystem of a large social system and subordinate to the political system. This systemic or cybernetic approach in economics is an ingenious idea, and like most other ingenious ideas, it is very simple. The approach was introduced by the professor in the mid-1960s, which I was very lucky to hear in both undergraduate and postgraduate studies, but this systematic approach was not accepted and did not come to life. Globally, economics went astray in the 1970s and 1980s. The same situation is in our economic schools; I know from my experience for high school education.

To conclude: the pandemic crisis has caused such changes that it seems that even economic science is not able to guess where the global economic system will go "after" the pandemic. This total disorientation of the economy is not the result of the fact that the crisis was caused by an exogenous blow, because economics knows such types of theoretical models. The only thing that is certain at this moment is that the pandemic or economic crisis that follows in one form or another will not have any similarities with the previous great crises, not even with the one from 2008, which, according to many, marked the end of an economic era in the sense of civilization. Professional economists do not expect politicians to turn to them asking for advice because - what could they advise them that they have not already done?

Is economic science passé?

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