economics vs. people

There really are things outside of economics. So says economist Ricardo Hausmann in this essay posted on Project Syndicate. Some solid sound bites from the former chief economist of the Inter-American Development Bank and current Harvard Professor:

'It requires many years of training and abstract economic thinking to miss the obvious.'

'Economists and policymakers have disregarded the physical aspects of urban life.'

'Governments will have to start doing some good things, not just stop doing some bad ones.'


While it's heartening that a respected economist now admits that his fellow professionals seem to have no idea of real life and that government ought to do more than simply minimize evil, I find something cold in Hausmann's analysis. What's missing from what he calls the physical aspects of urban life? People. The men, women and children who are the actors/motivators/doers/makers and sometimes victims of urban life.

The informal sector is mostly a consequence of the fact that people are disconnected from modern production networks,' Hausmann writes, 'an inefficiency that will not be resolved simply by reducing the cost of registering a business or forcing small firms to pay taxes. What is required is a redesign of urban space, including subways and dedicated bus lanes, and a more integrated approach to housing, social services, and production areas.'

Rethinking the production of space is a useful practice, but the way Hausmann seems to envision it, it's a top-down approach, and therefore just more of the same.