Revisiting The Death of Economics

Paul Ormerod achieved notoriety, even opprobrium among orthodox economists, with the publication in 1994 of his best-selling book The Death of Economics. Ormerod’s aim was to provide a critique of conventional economics which was accessible to general readers. He described orthodox economics—with its assumptions of ‘rational’ behaviour in a mechanical, linear world of equilibrium— as in many ways an empty box. “Its understanding of the world is similar to that of the physical sciences in the Middle Ages. A few insights have been obtained which will stand the test of time, but they are very few indeed, and the whole basis of conventional economics is deeply flawed.†No wonder the prescriptions offered by conventional economists regarding big questions like inflation and unemployment are, according to Ormerod, at best misleading and at worst dangerously wrong. A secondary objective of the book was to suggest how economics could be developed to give a better understanding of how the world actually operates. A necessary starting point is a wider appreciation of human society as a non-linear system of huge complexity. Here, the approaches of the biological sciences—or of subjects such as palaeontology, astronomy and climatology which tend to build theories around the facts from the outset rather than pursuing abstract theories of how a rational world ought to operate—are likely to reveal more light than can the restrictive analytical tools of economic orthodoxy. World Economics asked the author whether, eight years on, he still stood by his original theses, or whether he has had cause to revise his ideas. In this invited article, Paul Ormerod revisits ‘the death of economics’.