Economics has inexactitudes and vagueness built into it. The general
lack of reliable data about past events makes virtually impossible the accurate
measurement of even the most basic economic variables, such as the total
volume of output in a country, or the path of consumer spending, or inflation.

If economists are hazy about what is going on right now, they are even
less sure about the future. Due to the general measurement difficulties,
as well as unforeseen events such as wars or natural disasters, economic
forecasts are almost always wrong, sometimes by wide margins. As for economic
theories, they change almost according to fashion, with economists allowed
to move effortlessly between them, sometimes holding several contrasting
points of view at the same time.

The contrast with scientists could not be starker. The tools of an economist’s
trade are muddy data, loose theorising and a shambling approach to causality
which says that a set of interactions between A, B and C MIGHT lead to a
conclusion Z (and only via a roundabout route which takes in P, Q and R
as well). ÐÓ°ÉÔ­´´s have a harder-edged way of looking at the world, requiring
a set of rigid theories and data based on painstaking experimental observation.

But the economists have been able to use the vagueness with which their
subject is afflicted to their advantage. By concentrating on broad conclusions
to problems and communicating these in terms that can be understood by the
special interest groups they are dealing with, economists have had a generally
good record in assimilating themselves into positions of influence. ÐÓ°ÉÔ­´´s
have done rather less well by concentrating on the nature of problems rather
than on the conclusions or policy prescriptions.

All this explains why, in Britain at least, economists as a body of
people have had much more success in purely professional terms over the
past 20 years than scientists.

Take the posts in the British government of chief scientific adviser
and chief economist. In the first position, Bill Stewart has a thin power
base, playing a marginal role in providing scientific advice to dozens of
government departments. The second job takes the incumbent to the centre
of the government’s decision-making machinery in the Treasury, and into
involvement with many of the most important decisions ministers make about
how Britain should operate.

In industry, top scientists working for big firms such as ICI or IBM
certainly are in strong positions. But the ability of such people to influence
events is put into the shade by the power of economists working for the
big international banks and investment houses in the City of London. The
broad judgments of these people about global economic patterns, transmitted
by numerous direct and indirect ways, form a key component of thousands
of decisions made at company level at the grass roots of industry.

How did economists get to be in this position – and what can scientists
learn from them? Despite the difficulty in arriving at hard answers to many
of the problems in economics, people in the discipline have shown an ability
to skim over the inexactitudes, to come up with a general view of the world
in terms that are relevant and make sense to those outside the profession.

As an example, consider a single topic of relevance to a wide body of
people – the flow of capital around the world. Finding out about where all
the world’s money is going (and why and how and at what rate) is of obvious
importance to anyone interested in investment decisions and the competitive
advantages of specific nations over others.

Every few minutes, banks and other institutions are switching hundreds
of millions of dollars from country to country in a pattern that is far
from clear. The goal on each transaction is to move money into a region
where the returns are higher and so chalk up a profit. Working out what
is going on in this vast exercise, and the important influences that are
at play, is vital to understanding a host of issues involving the build-up
of wealth in the modern world.

The ‘pure science’ way of approaching this problem would be to attempt
to collect data from all the banks and regulatory authorities participating
in money transfer, and thence gain a sum of all the capital flows – from
which appropriate conclusions could be drawn. The economist would recognise
that the task of measuring and collecting the data is well nigh impossible.

Using the fairly paltry statistics that are available, and some judicious
averaging out and guesswork, the economist would gain a rough idea about
the shape of the world’s money flow. From this would flow a convincing argument
about the policy dimension to the problem – such as how the balance of interest
rates between several countries made a specific course of action, as related
to funds transfer, either less or more appropriate – in a relevant way.
The scientific way is to throw everything at the problem and be less concerned
at the prescription that follows; with the economist the balance is the
other way round.

What can pure scientists gain from this study of the ‘dismal science’?
When necessary, they should reject exact approach, take a broader view,
study conclusions and how to implement them and above all learn better communications
skills. There are some signs of such things happening. There is a general
move in certain sections of academia and industry towards the concept of
the multidisciplinary scientist, one who can take in to a world view bits
of physics, chemistry and biology as well as general knowledge about business,
marketing and finance.

Even at a basic single-discipline scientific level, more efforts are
being made to consider problems as part of a multi-faceted general inquiry
– in risk analysis, for example, where it is acceptable to state that there
is a certain chance that something might happen, rather than will happen.
Perhaps, in time, academic establishments will start to offer degree courses
in general science combined with economics; such courses at the moment are
thin on the ground.

Peter Marsh is a journalist with the Financial Times.

The benefits, in sheer pecuniary terms and also from the point of view
of career enhancement, may be substantial and highly enticing – especially
if you are a post-doc surviving on the breadline and with your academic
department on the wrong side of the University Grants Committee’s ratings.
However, the road from the ivory towers of science to the citadels of capitalism
may not be wholly paved with gold, as some who have trodden it have found
out.

First, the jobs themselves, and why they are becoming more plentiful.
The big banks and stockbrokers of the City have always relied on large numbers
of new graduates, many of them from Oxford and Cambridge, for filling the
junior ranks of their employees. Historically, these people have largely
had backgrounds in arts subjects or in economics.

In recent years, however, scientists have started to be in high demand
– not just for turning into accountants (a route many scientists have taken)
but for what they know about chemistry, physics or biology.

The reason is tied up with the huge changes that have affected the banking
industry worldwide. Many big banks – not just British ones but those from
Japan and the US, and to a lesser extent continental Europe – have plunged
in recent years into the role of providing all-round financial services,
organised on a global scale. The changes have been wrought largely as a
result of the loosening of the regulations governing banking and stockbroking
operations in many of the world’s leading financial centres, including London.
This has given many of the big banks the opportunity to expand their operations
greatly.

In their new role, these groups offer clients from the corporate world
a complete menu of financial-related activities, including working out the
details of mergers or acquisitions, arranging new sources of investment,
or making judgments on buying and selling company shares in the world’s
equity markets. The clients themselves can range from other financial groups
(such as pension funds with large amounts of money to invest) to industrial
companies scraping around for ready funds or looking at possible takeover
targets.

In this explosion of activity, the climate has become more competitive.
To retain an edge, the financial organisations – leading groups among which
include Morgan Stanley, a big American bank, Nomura of Japan, and Warburg
Securities and Barclays de Zoete Wedd of Britain – have attempted to hone
their skills in interpreting scientific trends which affect the corporate
and industrial world.

These competition-related changes have come in at a time when advances
in science are having an increasing effect on the performance of much of
industry. As more of the banks have moved into stockbroking in a big way,
in which they trade shares in companies in equity markets, it becomes more
important for them to follow trends which might affect the activities of
these companies, and hence the price at which their stock is traded. Much
the same goes for the departments of the same financial organisations which
are looking at, say, mergers and acquisitions related to science-based industrial
groups.

All this entails employing more people who can understand the details
of how changes in areas such as biochemistry, parallel processing and materials
technology will affect the world’s industries concerned with pharmaceuticals,
electronics and automotive engineering. In just one example, there are now
in the City of London more than 70 financial analysts who monitor full-time
the activities of the world’s pharmaceuticals industry, some three times
the number at the turn of the 1980s.

An indication of how breakthroughs in particular scientific disciplines
nowadays attract considerable attention from the financial world came with
the interest in recent years in warm superconductors. That spawned a spate
of ‘buy’ or ‘sell’ recommendations from financial groups, written by their
own in-house scientific experts, advising corporate investment houses on
whether putting their money behind company X or Y fitted in well or badly
with the latest findings related to this technology.

As more cynical readers might suspect, at least some of this leaping
on to scientific bandwagons is linked with sheer opportunism from banks
and other groups anxious to drum up business in share dealing. That is certainly
apparent in the field of scientific advances linked to the world’s pharmaceuticals
industry. The business is highly important to the stock market not just
because of its overall size, accounting for a global turnover of some Pounds
sterling 70 billion a year. A further point is that some of the main companies
in the business – such as Britain’s Glaxo or Merck of the US – are among
the world’s largest in terms of share trading.

By coming up with new theories to explain why company X or Y is likely
to do well out of a particular advance in biotechnology or some other scientific
discipline, a bank or other financial group may be able to increase its
rate of share dealing, so leading to extra revenues for itself. That explains
why there is some pressure put on analysts in this sector to come up with
good ‘stories’ about how different companies may benefit from a new set
of scientific advances. The theories which emerge may be dressed up in the
right scientific language, but they do not always appear completely convincing.

This kind of pressure explains why some scientific analysts in the City
find the work somewhat frustrating and to some degree removed from the kind
of purist ethics which some may feel science is really about. It is also
extremely hard work, with long hours, partly because of the sheer volume
of both scientific and corporate information which analysts in the City
and other specialised employees are expected to know about. In the past
two years, the jobs have, furthermore, become rather insecure.

Some of the big City firms have been going through rough times and have
been laying off large numbers of staff who have not made the grade. But
the work – if you can last the pace – is certainly well rewarded. A new
graduate in a scientific subject in the City will probably expect a salary
of about Pounds sterling 13 000 in the first year, not that much more than
he or she would get in manufacturing industry. But if the person is any
good he or she can easily treble or even quadruple this within four years.
Attaining the same increase in pay might take 20 years in industry. The
best regarded share-dealing and industry analysts in the City are likely
to be on salaries of Pounds sterling 100 000 or more.

A more positive side to a science job in the City is the volume of expertise
which a reasonably bright person in such a post can quickly acquire. Many
such people, some still in their early 20s, have had the chance to observe
at close hand the workings of large industrial companies, in areas such
as medicines or computers, whose operations they are attempting to interpret
for the benefit of their employers’ clients. They comment that such jobs
give them a detailed insight into the workings of science-based industry
– and the differences between the mentalities of different companies around
the world – which they would be most unlikely to get at a comparably early
stage of an orthodox science career in either academia or in production
industries.

Some of the ‘City scientists’ can also become depressed by what they
find. They may discover that the much discussed ‘short termism’ by which
the financial world is often said to be afflicted is actually an accurate
description of how much of this sector operates. It is true that shares
are bought and sold often on the basis of the whims of particular investors
and/or financial analysts. Knowledge of how such deals come about, however,
can hardly hinder the scientists who go into the City in their efforts to
understand how the world works. This information is bound to be of use to
them later in their careers – especially if they end up working for industrial
groups which have to contend with the machinations and vagaries of the financial
community if they are to survive.

Peter Marsh is a journalist with the Financial Times.

Genetic Engineering – Catastrophe or Utopia by Peter Wheale and Ruth
McNally, Harvester, pp 332, Pounds sterling 37.50 hbk

THE novel techniques for manipulating genetic fragments at a cellular
level that have emerged over the past 15 years have a big potential for
changing the way we live. The impact promises to be in areas such as medical
treatment, crop management methods and genetic screening, in which individuals
may be given the chance to determine to what degree they are likely to develop
cancer or other ailments. Certainly, biotechnology is no less potent as
a force for change than the other areas of technological advance, in computers
and telecommunications, for instance, that the developed world as a whole
has absorbed without too many problems since the 1960s.

The big problem about biotechnology, however, is the fact of its near-indecipherability
to the ordinary person. The intricacies of the subject can easily baffle
even people with science degrees. If you want to get to grips with most
new technologies you expect to have to translate some jargon; if you want
to come anywhere near understanding biotechnology you have to learn virtually
a new language.

The difficulty of communicating the basics of biotechnology already
produces some side effects, most noticeably in West Germany. Here environmental
groups have been able to block some important commercial developments related
to biotechnology by arguing that the techniques may be inherently unsafe.
These fears are linked to the notion that scientists may, by genetic tinkering,
run the risks of creating new and possibly dangerous biological entities
which could, for instance, colonise the cells of animals or plants and cause
ecological or human disasters.

These fears may well be perfectly well based. Not even the most skilled
practitioners of the new biotechnology have the experience to rule out such
possibilities. The intractable nature of explaining some of the scientific
aspects to the subject have, however, made a meaningful debate in West Germany
between the protesters and the supporters of the technology well nigh impossible
because the two sides appear to be talking in different tongues.

Both these books address this central problem of the impenetrability
of much of the science behind biotechnology. They do so with some success
overall. They convey the essentials of biotechnology without leaving the
general reader either feeling submerged by too much detail or frustrated
at not getting enough. A Revolution in Biotechnology is the more ambitious
of the two volumes and, in many ways, the more satisfying. It includes contributions
by a variety of scientists who are expert in their fields.

These people write in reasonably straightforward terms but include hefty
chunks of the basic science, about the main aspects of development in biotechnology.
Thus there are sections on the basics of DNA and heredity, improvement of
crops by gene transplants, monoclonal antibodies and their role in healthcare
studies, the effect of bacteria on the environment and new methods for diagnosing
genetic diseases. The editing and good illustrations will make the general
reader feel that, for the most part, he or she is learning something useful.

The treatment of techniques to improve the growth of crops is especially
valuable. This tells you about the basic ways plants develop and how food
chains work, which will interest the average person, quite apart from any
discussion about the genetically-related improvements that may arise over
the coming decades. The style of A Revolution in Biotechnology is admirably
non-hectoring. It presents facts about the scientific basis to the new techniques,
and leaves the reader to judge whether he or she thinks they will be positive
or negative.

Genetic Engineering is not so well balanced. Readers may sometimes get
the impression they are being lectured in a way that is not very subtle
about some of the supposedly nasty effects of biotechnology, for example,
the possibility of geneticallyaltered species being let loose on the environment
with dire consequences.

The book, however, gives plenty of space to a discussion of the technical
basics of genetic engineering; the treatment meted out to this subject is
commendably clear. The conclusion of Wheale and McNally, the books’ authors,
is that genetic engineering is ‘in grave danger of becoming an imprudent
technology’. The world should pause before rushing on too far because of
its inherent dangers. Though not everyone involved in the technology would
go along with this, an informed discussion of the new scientific technique
is, undoubtedly, an essential part to any decisions over the degree to which
genetic engineering should be regulated or monitored to prevent any abuses
or dangers.

Wheale and McNally reckon that there is an urgent need to increase general
awareness of the subject to create an atmosphere in which responsible decisions
can be taken regarding its applications. Few people would disagree with
this and these two books add up to a welcome step to laying the foundations
for debate.

Peter Marsh writes about the chemical industry fot the Financial Times