“Now what I know about our training since the early 1980s [...] the way we train people to think [...] in mainstream economics and in mainstream politics, has left them almost unable anymore to distinguish the surface from the underlying reality. Not only was it the age of Reagan and the beginning of market fundamentalism that came in the early 80s, and the rational expectations revolution and all the rest, but a fundamental break in how we actually train our students to think [...] the way we see it in our universities.
Because the new kind of economic modeling for 25 years, the one that won all the Nobel Prizes said: you don't have to understand the deep picture, you have to look at the prices you see on the surface and infer the deep picture from that. In other words, the surface tells you the depths in fact because the surface and the depths couldn't be two different things. You don't really have to know underlying mechanisms in the economy because the prices reflect the underlying mechanism. In fact you fit the deep model, if there is one, by looking at the surface and then inferring what the deep model must be, that's literally how students are trained. They're not trained to be skeptical, they're trained to fill in parameters of a system which assumes from the start that what you see on the surface is what you really have. Whereas what fundamental proper skepticism of the Popperian sort [...] and also what the logic of economic bubbles shows, and what the logic of biophysical bubbles show, is what you see on the surface can completely hide and obscure what's happening below.
And it's our job as scientists, and I would say as responsible citizens, to understand the deep points and therefore help to rectify the discrepancy and keep ourselves away from trouble.”
~ Jeffrey Sachs, October 20, 2008 “Can We Save the World Economy? A Conversation with Geroge Soros, Nouriel Roubini, and Jeffrey Sachs”, Recording here