Opinion / Liang Hongfu
Economists should repair the damage
By Liang Hongfu (China Daily)
Updated: 2006-04-11 06:06
In a recent televised talk show, the host posed this question to two
guest economic professors: Why have economists in China become so
maligned by the public when they should have been revered as champions of
the nation's economic success?
Instead of defending his colleagues, one professor said that many Chinese
economists, motivated by greed, have "betrayed" their profession by
masquerading as corporate consultants, offering unworkable solutions to
specific business problems. Economists, he said, are particularly
ill-equipped to play that role because they are trained in looking at the
"big picture" rather than solving specific problems.
In the past, many corporate leaders in China wrongly believed that
economists could help them manage their enterprises, streamline their
production processes, or promote sales, the professor said. Over time,
these corporate leaders have come to realize that the economists they
hired as consultants were giving them advice that didn't work as expected.
"Feeling cheated, these corporate leaders have been spreading the word
that economists are nothing more than just a bunch of fast-talking
snake-oil salesmen offering useless advice to whoever is dumb enough to
pay," the professor said. And subsequently, "we are all tarred by the
same brush," he said.
The other professor, from a different university, offered a different,
but equally unflattering, answer to the host's question. Economists, he
said, have lost their way and have become too "cold blooded" in their
obsession with mathematical solutions to economic problems. In their
relentless pursuit to maximize efficiency, as expressed in cold numbers,
many economists have ignored the "human side" of the equation, he said.
To these economists, the professor said, laid-off workers are seen as
collateral damage and the hardships that befall their families are a
small sacrifice the society has to make to achieve rapid economic growth.
"They (the economists) have lost their conscience," he said. "As such,
they have also lost the respect and trust of the public."
Both professors agreed that Chinese economists have made tremendous
contributions to the nation's spectacular economic progress, particularly
during the early stages in the 1980s. Much of the advice of the country's
leading economists was incorporated into many important government
economic policies that underline the rapid pace of industrialization over
the past 25 years, according to these experts.
Their subsequent fall from grace in the eyes of many people is
lamentable. There is a clear need for economists in China to consider it
their urgent task to repair the damage that was done to the credibility
of their discipline.
The professional expertise of economists is still needed to help chart
the future direction of the country's economic progress. But they require
the trust of the public to ensure that their advice is heeded by
policy-makers.
Some economists, like the two professors, are taking advantage of
speaking opportunities at public forums and business seminars to educate
the public, especially the business community, on where exactly their
knowledge and expertise lie. That could help clarify much of the
misunderstanding about the discipline that seems to be widespread among
the business community.
For sure, business people can benefit a great deal from the knowledge and
advice given by economists. But such benefits are limited to helping them
understand the business and economic environment in which they operate.
If they want advice on, say, corporate restructuring or project
management, they should hire a management consultant.
More economists around the world are beginning to pay greater attention
to the social cost of economic growth. Such a "softer and kinder"
approach is shaping up to be a predominant influence on future economic
policies of both developed and developing countries.
Many of the unfortunate side effects of rapid economic growth, including
the widening wealth gap between rich and poor, rising unemployment
resulting from massive layoffs, deteriorating social services and
worsening environmental problems, need to be addressed. The difficulty
lies in striking a balance to ensure that the benefits of economic
progress can be shared fairly and equitably by the vast majority of the
people.
That's the most challenging and potentially the most rewarding task
facing our economists.
Email: jamesleung@chinadaily.com.cn
(China Daily 04/11/2006 page4)
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