Emilia-Romagna qualifies as an international Data Valley, boasting the world’s best supercomputers, cutting-edge data centers, and a large ‘big data’ community>>. This is the statement from the regional government of Emilia-Romagna. Equipped with Leonardo, one of the world’s most powerful supercomputers, Bologna is the epicenter of the Valley. Big Data is a vast collection of data sets. In addition to their large volumes, they are characterized by their speed and variety of sources and nature. Drawing on millions of interactions, experiments can be conducted, and maps can be considered nearly perfect. “We will finally have highly reliable maps of the economy,” say the Dataists, advocates of economics as a data science. What happened in 2008, the annus horribilis of the global financial crisis, will never be repeated. During a visit to the London School of Economics, Queen Elizabeth asked economists how it was possible that none of them had noticed the crisis was coming. By relying on frameworks drawn from the quantitative analysis of economic problems, with extensive application of mathematical and statistical techniques, those economists believed they had done the right thing. This was their response to Elizabeth. The fact is that real-world situations are so complex that they require creative thinking. When we move from data analysis to their practical application, which involves social and ethical factors, nuanced opinions replace the peremptory judgments derived from statistical methods and mathematical models. We are grappling with the vision of economics as a creative activity comparable to art. Michael Kitson, professor of International Macroeconomics at Cambridge Judge Business School, argues that imagination is absent in modern economics, a lack that will persist until economics transcends the confines of mathematics. Economists should be more cautious in their approach, recognizing that the complexity of human behavior cannot be fully captured and explained by algorithms or mathematical proofs.
It’s been 18 years since economics students in the UK launched a campaign for radical innovation in economics studies. Their manifesto, “Rethinking Economics,” states that the climate crisis and socio-ecological issues are largely absent from economics curricula. Furthermore, economic history and the potential implosion of markets are not taught. The most highly regarded universities often perform the worst in preparing students for the real world. By telling fairy tales, they create the preconditions for the failure of future economists. This state of affairs was recently denounced in the Financial Times by Ha-Joon Chang, research professor in the Department of Economics at SOAS (School of Oriental and African Studies), University of London: <<The dominance of neoclassical economics in our university curricula has created a world where we are told there is no alternative — only technical adjustments to a system that is fundamentally fair, rational and efficient. But this is fiction. Economics today resembles Catholic theology in medieval Europe: a rigid doctrine guarded by a modern priesthood who claims to possess the sole truth. Dissenters are shunned. Non-economists are told to “think like an economist” or not think at all. This is not education. It’s indoctrination>>.
In the greenery of Data Valley, we would love to meet people who, like those in the classical economics era, between the late 18th century and the second half of the 19th century, pay attention to history, philosophy, psychology, and sociology. Among them are not only academic economists but also politicians who deal with economic issues, entrepreneurs, and business consultants. Even today, the many who remain trapped in the idea that individuals and businesses engage in predictable behavior aimed at maximizing income or profits would do well to borrow the thinking of English economist Alfred Marshall, professor at Cambridge University from 1885 to 1908. In his opinion, Kitson recalls, “mathematics should be used as a shorthand language rather than as a research tool.” Between wars and tariffs, faced with such unpredictability that marks the current era of profound change in the previous order, economics needs to be rethought.
