This article was first published in the October 2015 issue of WIRED magazine. Be the first to read WIRED's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
Nobel-winning economist Kenneth Arrow once noted that "an economist by training thinks of him or herself as the guardian of rationality, the ascriber of rationality to others, and the prescriber of rationality to the social world."
However, in creating better tools and value for society, engineers trump economists. Why? Rationality aside, engineers design under constraints - most notably the laws of nature and the limits of human knowledge. From the design of satellites to sewer systems, engineers maximise utility within the confines of what is practical. Economists also appreciate constraints, and their models and advice have had important consequences. For example, how does health insurance change the way people use medical care, and what is the optimal coverage plan? The fundamental issue, though, is that most economic analyses are built on the assumption that humans make rational decisions.
Economists could learn from the ways engineers deal with less-than-perfect human rationality. Engineers have nuanced capabilities to take human factors into consideration through the long-standing practice of user-centred design -- a strategy that economists have only recently begun to appreciate under the name of behavioural economics. Using the power of feedback, user-centred design practices have been exploited to foster new products, services and markets. And, critically, the designs have played a decisive role in influencing behaviour change.
Consider Stockholm. At the turn of the millennium, the city was struggling to control its rush-hour traffic mess. Fortuitously, the city administrators consulted IBM, whose engineers possessed expertise beyond the usual disciplines of civil engineering and urban planning. Instead of proposing the conventional solutions, such as a new bridge or an additional highway, the IBM engineers proposed a congestion-pricing system that dramatically transformed public behaviour by motivating people to think of other transportation choices during peak hours. This solution is a prime example of "design economics", a term championed by Alvin Roth, an engineer-turned-economist.
Roth has applied engineering design principles to previously intractable problems such as matching medical residents with hospitals and setting up life-saving kidney-exchange programmes -- achievements that led to his Nobel Prize. For economics to be more useful, economists need to take a comprehensive systems approach just as engineers consider far more than the equations of physics and forces of gravity in designing buildings and bridges. Their stability, durability and reliability depend on the mechanics of supporting materials and other forces, and also on how people use these structures.
These types of practical engineering insights are crucial in the redesign of our policy systems that have traditionally relied on the advice of economists. "Engineering is often less elegant than the simple underlying physics," Roth writes. "But it allows bridges designed on the same basic model to be built longer and stronger over time, as the complexities and how to deal with them become better understood."
Engineering and economics have both made vital contributions to society, each with its limitations. Engineers who develop smartphones or aeroplanes may not have the acumen of economists and marketers to suggest business models that lock us into two-year contracts with phone-service providers or earn loyalty air miles. But they do bring the much broader and useful expertise of systems at the junction of humans, technologies and the environment. They also build redundancies, create fail-safe mechanisms and implement continuous improvements: a much better approach than establishing committees or bureaucratic institutions in response to panic.
Through an increased reliance on engineers -- or better yet, rethinking economics using the principles of engineering - policymakers can develop more effective solutions to social challenges. In engineering design there's a saying: "In theory, there's no difference between theory and practice. In practice, there is." Grand theories will not repair deteriorating highways or restore public health systems weakened by disease outbreaks. We need workable solutions. It's time to give engineers a chance.
This article was originally published by WIRED UK
