A Bone To Pick...

Well, Steve Levitt manages to really screw things up here.

Some of what he says is fine: however, the idea that businesses don't need economists is simply absurd.

What he is correct about is that business does not need academic economists. But that's not what he says, and indicates that he actually has little or no idea of what business economists actually do.

What do they do?

Simple: bring an economist's skills and abilities to the company to help the decision makers understand their operating environment, what sort of challenges will show up (largely demographics) and what the implications of these are for the future of the company. While many companies either buy these services from external sources or continue to have a company economist, most rely on a non-economist to give that sort of input.

And that is exactly the problem: while many non-economists have a basic knowledge of economics, you will not get the same level of expertise and in-depth understanding that a right and proper business economist will give you. An MBA tries to provide some of this, but the relentless pursuit of the bottom line and office politics blinds many to the realities of the world.

Mr. Levitt has done all economists a disservice for not saying, clearly, that it is academic economists that are fairly useless for the rough-and-tumble real world economics out there.

What the business world needs are more business economists, not fewer: anyone watching this would come away with the idea that the business world doesn't need economists at all...