Sagacity central
27 May 2017 21:36 (South Africa)
Opinionista Co-Pierre Georg

The dangers of listening to bogus economists

  • Co-Pierre Georg
    Co-Pierre-Georg.jpg
    Co-Pierre Georg

    Co-Pierre Georg is a Senior Lecturer at the African Institute of Financial Markets and Risk Management at the University of Cape Town and a Policy Associate at Economic Research Southern Africa. His research is highly interdisciplinary and Co-Pierre has worked with physicists, biologists, mathematicians, and economists and consulted with a number of central banks around the world. He is a very frequent traveller and held visiting positions at Oxford, Princeton, and Columbia Business School. During the day he works on his research on financial stability, regulation, and complex systems analysis. At night, he enjoys reading, thinking, and writing about politics. He writes in his private capacity.

There is an excess supply of bogus advice about how to reform our economy. The reason is that South Africans make it way too easy for economics professors to get away with balderdash. We need to be vigilant about whom we take advice from or we risk being stuck in a zero-growth economy for the foreseeable future.

In a time where scientists around the world have to organise a “March for Science” to show why facts and scientific discourse are still relevant in a post-truth world, South African academics enjoy tremendous respect from their fellow citizens. Yes, there have been lone calls that “Science Must Fall” as part of the debate about decolonisation, but these calls have been decisively rejected and were extensively ridiculed on social media. South African students generally show an amount of respect towards their lecturers that borders on being servile. This situation is exacerbated by an academic body which is still dominated by old white male patriarchs, especially at the level of Associate- and Full-Professor.

One particular consequence of the universal respect academics in South Africa enjoy is that, way too often, we get away with poppycock.

Usually, academic claptrap comes in one of two forms. First, in the form of argumentation by obfuscation, for example by using difficult words when simple ones would suffice. Or by constructing complex arguments while simple ones would capture the essence of the argument just as well, a strategy the former US President Harry Truman characterised as: If you can't convince them, confuse them. The other common strategy is to use a variation of argumentation by authority. Academics are, by definition, well educated and hence feel they are on the top of the intellectual food chain.

And why shouldn't we get away with talking baloney? Academics are highly specialised on sometimes obscure niches that few mere mortals understand. In a small country like South Africa there are many academics who have no or only few colleagues who work in the same niche. And while there is fantastic, world-class research in the country, with major breakthroughs from anthropology to cosmology, the sad truth is that the majority of South African academics are isolated, alone, and as a result produce research that is not competitive on an international level. If they produce research at all.

Colleagues from the University of the Western Cape found in a very interesting study of economics departments in South Africa, that there are huge disparities in the publications by South African economists. While the average lecturer at the University of Pretoria manages to produce one paper per year in an accredited international journal, for some smaller universities this number is as low as one paper in 20 years. And, on average, less than 8% of faculty members have obtained a rating from the National Research Foundation, which is an independent evaluation of research quality.

To understand just how bad we are doing as a profession, let me put these numbers into context. An economist at the world's top universities at Harvard, MIT, or Stanford, for example, will produce about one or two research papers per year on average. But these papers are published in the top scholarly journals in economics and finance. These journals typically reject more than 90-95% of all submitted papers, ie only one in 20 papers gets published. By contrast, the journals where South African economists tend to publish reject only 40-50% of all submitted papers, which makes it substantially easier to, again, get away with drivel. While the top journals often have four or five peers who review a paper and assess its merit, lower ranked journals often use only one peer reviewer and have much, much lower standards about what constitutes a publishable paper. Even worse, there are journals who will always publish a submitted article as long as the author is willing to pay a hefty submission fee. But not only that, also many lower ranked supposedly academic journals have alarmingly low academic standards, as the top journal Science found out in a sting operation in 2013.

The reason that some academics still send their papers to low-ranked  journals is simple: money.

The Department of Higher Education and Training (DHET) incentivises research by providing a subsidy of R150,000 for every paper that is published in a list of DHET accredited journals. For this subsidy it doesn't matter whether the journal is of high quality, low quality, or even whether it is predatory. Every publication gets the same amount. Heads of Departments an Deans, notoriously short on cash, have a strong incentive to get their faculty members to publish as often as possible. The obvious consequence is that South African economists try to maximise the number of their publications, irrespective of the academic standing of the journal. Some economics departments, for example at UCT, try to counter this trend by offering academics a progressive subsidy to their research budget that increases with the reputation of the journal. However, the progression is in no way compatible with the increased difficulty of publishing in a top journal.

Why all the fuss about what does and does not constitute good research in economics?

Unfortunately, every now and again, economists are asked by politicians for their advice on how to repair a broken economy. What policies to take to create new jobs, whether or not to pay a youth wage subsidy, or if we should raise the repo rate to keep inflation in check when the rand is falling off a cliff again. Or, in the worst-case scenario, an economist is picked to advise a new finance minister with absolutely no background in economics or finance.

These are the situations when we must be vigilant about whether or not this economist is able to do good work. Whether he or she has the right tools to model complex economic relationships, understand difficult identification problems in empirical economic research, and generally follows best practices in the profession when it comes to the scientific method.

We can and should be more relaxed about labels such as “left-wing” or “neo-liberal” when it comes to economics. A social science like economics greatly benefits from a plethora of opinions. If anything, we need more variety of opinions and a more robust debate to make sure we make the best possible policies based on the available data and using unbiased methods.

However, we must be vigilant when it comes to economists who do not undergo the rigorous and sometimes gruelling peer review process. Who write research articles that are published only in obscure and low quality journals and who are not cited by other economists.

Our debate should not be about left versus right, about good versus bad, but about proper versus improper research. About critical discourse versus hogwash.

This is where Chris Malikane comes in. Malikane is the new, and highly controversial adviser to the new, and only slightly less controversial finance minister. He is an Associate Professor at Wits and surely does not hold back with his opinions about how to transform the economy. Whether it is in newspaper op-eds or during speaking engagements at the Gupta-linked Black First Land First movement. Malikane advocates policies that the vast majority of economists will condemn because they have been tried before, for example in Venezuela, and failed miserably.

The only reason the country is paying attention to Malikane's failed ideas is because he is an academic.

So the question is, is he a proper academic and should we listen to his advice even if we disagree? When you look at the two indications that measure academic success, the number of papers published in reputable journals, and the number of citations your work receives afterwards, Malikane is is not doing well. He has, according to the scientific database Scopus, which tracks academic publications, 12 papers to his name. But only three of these were published in journals with a fair standard of peer review. None of these three papers were about the policies he is advocating now, so his argument that people should go and read his papers if they want to understand his point is a prime example of obfuscating through authority. And more, not only is Malikane substantially less productive and prolific than most of his co-authors, who are also heterodox economists, his work is basically not cited by anyone: his 12 papers have only received eight citations from journals listed on Scopus. This is an abysmal track record for an Associate Professor, even in South Africa.

Therefore we must be vigilant when Malikane fantasises that: “We need a two-thirds majority to change the Constitution. Otherwise, to achieve what we want to achieve, we need to go that route (take up arms). Let’s try two-thirds. I don’t like war.” We must challenge him about his motives and not fall victim to his supposed academic authority.

We must call his policies out for what they are: Codswallop. DM

  • Co-Pierre Georg
    Co-Pierre-Georg.jpg
    Co-Pierre Georg

    Co-Pierre Georg is a Senior Lecturer at the African Institute of Financial Markets and Risk Management at the University of Cape Town and a Policy Associate at Economic Research Southern Africa. His research is highly interdisciplinary and Co-Pierre has worked with physicists, biologists, mathematicians, and economists and consulted with a number of central banks around the world. He is a very frequent traveller and held visiting positions at Oxford, Princeton, and Columbia Business School. During the day he works on his research on financial stability, regulation, and complex systems analysis. At night, he enjoys reading, thinking, and writing about politics. He writes in his private capacity.

Get overnight news and latest Daily Maverick articles






Do Not Miss