Economics and reading the runes

Though The Guardian does business reporting it rarely comes up with really thought provoking commentary on the subject.
This morning is different, however, as Simon Caulkin asks where management theory went wrong.

In short, for Caulkin, management theory became hijacked by the Chicago School of economics - you know that brand of economic theory dominated by Milton Friedman (rational choice theory leading to efficient markets). The point being that Chicago economics has been superseded but no one saw fit to feed that into management theory. This has therefore led to some dodgy corporate management and some poor corporate governance.
This is pretty much in tune with The Guardian's agenda. Sadly, I'm not well versed enough in economics to argue the pro and cons (I wish I was) but the idea that two fields of thought would cease to keep pace with each other is an interesting one. Economic theory raced on, management theory remained stuck at a certain point in time, is what Caulkin is saying.
More interesting is the way finance directors - de facto economists for their organisations - should regard this. I was reading the Secret FD column in Financial Director magazine who had this to say: "I have found advice from economists to be more ambiguous and open to contradiction than in almost all other areas."
FDs, perhaps, more readily question economic theory than anyone else. And yet if Caulkin is right, they did not question rational choice theory assumptions and efficient markets. They merely stuck to a particularly comfy set of theories and ignored everything else that came after.
I'm not sure that's correct. Though I do like this from Caulkin: "The irony is that we know what makes companies prosper in the long term. They manage themselves as whole systems, look after their people, use targets and incentives with extreme caution, keep pay differentials narrow (we really are in this together) and treat profits as the score rather than the game. And it's a given that in the long term companies can't thrive unless they have society's interests at heart along with their own."
But Caulkin's broader point would lead to the conclusion that FDs must get their underlying economic assumptions right. Which means enormous pressure on them. At a time when debate rages over economic theory it is perhaps harder than ever to pick the right camp. Caulkin's article is really an invitation to actively engage in that process. On top of everything else an FD does, like run the business.
But it does get at a fundamental point which I think the Secret FD is getting at too. If you are an FD you are relied upon for your ability to read the economic runes and the current circumstances we find ourselves in places a premium on that skill set. But there's a little bit more. It's the ability to take a step back and ask whether the old order was right. Call it "disassociation" if you like. You might do this about a product. Managers get wedded to old products - can't believe they could be wrong. Agile managers can disassociate themselves from the old product, have a clear vision of its future, or not, then switch to focus on something new. Likewise the FD might have to do the same thing with so called economic wisdom. But it's tough, perhaps bordering on traumatic. After all how can everything that came before be wrong. It's probably a mistake to see it as wrong. More "of it's time".
Certainly one worth discussing.