It has been almost two years since the financial collapse of 2008, and economists are just now calling for a code of ethics (raise your hand if you thought economists already had a code of ethics, just like almost all professional academic organizations/institutions… mine is definitely up. Even politicians have a code of conduct!).
A recent article in the Chronicle of Higher Education details how this song has been sung periodically since the 1920s, and yet the American Economics Association has never formally institutionalized an agreement on proper professional conduct.
This particular incarnation of the code-of-ethics song follows on the heels of a study from the University of Massachusetts, Amherst, that closely monitored 19 economists who “made policy pronouncements about financial reform after the 2008 crisis.” 13 out of that cohort, the study reveals, held significant conflicts of interests with financial businesses in the form of consulting, director, or other faculty positions, and yet only two of these 13 “routinely disclosed those financial ties in their academic papers and their news-media appearances.”
It now appears that even the experts who can understand, digest, and regurgitate the inner machinations of our financial system and economic structure in an intelligible manner cannot be trusted to analyze and report on those systems. How would the average American ever come to an informed judgment about the state of institutions affecting all lives around the world if the judgment of our experts is tied to the success of that very structure?
After all, if the current financial system disadvantages the average person but benefits those who understand and can game it, what would be the incentive to change such a system?