The Noble Lie: Prosocial Lying in the Economics Profession

12 November 2020, 1410 EST

Imagine it’s time for your yearly checkup at the family doctor. Sitting on the paper covered medical bench in a fluorescent room, you submit to the full array of tests. You say “ah,” you squint at letters from across the room, you feel the cold stethoscope against your back, maybe you even get some blood drawn. After answering all of your doctor’s questions, they look you in the eye, smile, and send you on your way with a clean bill of health! Feeling great, you go about your day. Perhaps you even take the stairs instead of the elevator because you’re feeling invigorated and full of life. There is an implicit trust between doctor and patient, so why should you feel otherwise? 

Let’s say however, that your doctor actually lied to you – everything is not okay. Perhaps they lied for your own good; because they don’t know what will happen to you or what to do about it; or perhaps they lied for monetary gain. But does the reason really matter? The inherent doctor-patient trust has been broken and we fervently and unequivocally condemn deceit of any kind in the medical field.

Why then, are we so cavalier about untruthfulness in economics?

When do we consider prosocial lying to be admissible?

Just as the world economy was about to fall off a cliff in 2007, Ben Bernanke repeatedly assured and reassured the US Congress and his world audience that all was well and under control. All was not well nor was it under control. Years later, Bernanke’s deceit is plain to see, yet the same fervent condemnation that we would feel in any other field is strangely absent. In the field of economics, weinherently presume economists are deceiving us for our own good. Economists’ lies are paternalistic or “prosocial”—intended to promote social betterment – not, of course, to line pockets. Economists sometimes face the “dirty hands” dilemma, permitting the violation of one valued good, in this case truthfulness, to achieve another. This is the Ben Bernanke problem. When do we consider prosocial lying to be admissible? Perhaps it is warranted in crises when there are immediate risks and fleeting opportunities? Or perhaps it is okay when decision-makers must be dissuaded by any means possible from seductive but deeply harmful policy options? Maybe it’s admissible in the case of defensive, deception-countering  lying, in order to counter the damaging lies of others? Or maybe not. 

By excusing these “admissible” forms of deception, economists’ dirty hands are thus scrubbed clean and the dilemma is resolved. The central problem with allowing for, and consenting to, any untruthfulness is that it undermines essential trust between professionals of the field and the rest of us. Even in the pursuit of social betterment, deception undermines the authority of not only the deceiver, but of all experts in their field. Even small falsehoods can do deep damage to the profession and, in turn, to all who rely upon it. And yet, economists accept, and even normalize, the unfortunate reality that economists lie. From Anatole Kaletsky to former World Bank economist Liaquat Ahamed to Stuart Hampshire, economists and philosophers alike rationalize economic misrepresentation as prosocial lying because their comments can have real world implications. They’re lying for us! It’s fine, see? 

Our permissive attitude regarding deception has led the field of economics astray. In economics, unlike other critical professions, we have no discourse around when to be truthful, when to deceive, what forms deception may and may not take, and perhaps most critically, who would be authorized in any particular case to judge whether lying is or is not appropriate. Is it okay to exaggerate our expertise and the confidence we have in our findings so as to influence policymakers in the ‘right’ direction? Think of the tone of Paul Krugman’s New York Times op-eds. Is he warranted in exaggerating the extent of his knowledge and the expertise of his profession since he is dueling with the devil on our behalf? If Bernanke and Krugman are warranted in exaggerating their expertise, are they also allowed to deceive in other ways—such as by manufacturing data to sustain an argument they know to be correct? “No, that crosses a line!” you’re thinking… but what’s the difference between that kind of deception and the kinds we are apt to tolerate? Where do we draw the line between acceptable and unacceptable deception, and who should police the profession?

We appreciate his artistry in manipulating the markets. But were he to lie to us, we would be deeply offended and clamor for redress.

Economists do not tolerate manufacturing data. That practice crosses an arbitrary line and enters the realm of undoubtedly and ethically wrong. But why? What’s the principle that distinguishes this from what we consider permissible deception? The core problem is that there is no real ethical difference. Economists distinguish between Bernanke’s deception of the public and deception of economists. When Bernanke lies to the public, we economists are in on the joke—we see the wink. We appreciate his artistry in manipulating the markets. But were he to lie to us, we would be deeply offended and clamor for redress. How dare he? We are not to be duped! The guiding principle we’d hoped for between permissible and impermissible deception turns out to be dependent on nothing more than professional vanity. 

Just as doctors must be honest, so too must we. Deception is not always wrong – there are extraordinary cases when we understand a doctor’s need to lie. I imagine doctors overstate their confidence to children before a particularly complicated surgery. Sometimes – very rarely – it may be the best option among only very bad options. Deception should be a last resort, not the rule. As we look to the future, the field of economics must cease it’s cavalier compliance with lying – even with perceived prosocial lying. No longer can we stand in front of the world, proclaiming and permitting misrepresentations and falsehoods without serious internal consideration. Philosopher Sissela Bok referred to deception as “a form of deliberate assault on human beings.” Trust and authority are important pillars to uphold, and we, as economists, must do better.

This post is the first in an occasional series discussing the ethical dilemmas engendered when academics engage with policymakers and the broader public. This series is part of the Rigor, Relevance, and Responsibility project of the Sié Chéou-Kang Center for International Security & Diplomacy, which seeks to make ethical considerations an integral part of policy-relevant research and engagement. The program develops knowledge around, and informs the practice of, responsible engagement so that future generations of academics can engage in the policy world with confidence and clarity. This program is supported by the Carnegie Corporation of New York.