“Progressive” economics: a bastard

21 July 2009

There was a brief write-up on Huffington Post two days ago of an article about the exclusion of economist Joseph Stiglitz from the Obama Administration. It came with a response by Paul Krugman on his Times blog.  I’ve surprisingly managed (and perhaps sadly) to make it through four years of college without having to get at Globalization and Its Discontents, so his exclusion is perhaps less grating to me than to Krugman.  But I found Krugman’s notion that Stiglitz represents the exclusion of an entire universe of thought – namely “progressive economics,” which I think a fair paraphrase – to be a rather provocative one. It’s a very funny notion that is derived from the fact that economics is – and always has been – a schizophrenic discipline.  It doesn’t know precisely what it wants to be. It ends up not being very much at all. And yet…

Economics was originally a philosophical discipline.  (Adam Smith was termed a philosopher before “economics” was coined as a term.  The first person to apply economics is supposed to be a man called Thales who decided to sweep away the illusion of philosophers as airy thinkers and give hope to generations of students full of useless ideas by using reason to corner the market on olives for a year.  Fat lot of good it did.)  It was at about the same time as the decline of a philosophical tradition called British empiricism.  In the 16th century the great debate was whether and to what extent people were born with knowledge or learned what they knew from experience.  Logic and mathematics were especially troublesome, since they seemed to just make sense.  The British empiricists believed, broadly, that only experience could teach us anything and that we were born only with a blank mind and our senses.  Their opponents with the rationalists, a continental group that believed we’re born with a sense of reason and experiences are only a series of events we tie together.  This triggered a dispute that continues to this day – and, not coincidentally, fractured on religious and national lines.

British empiricism did not survive as a system of knowledge, but with a temporary truce occasioned by Immanuel Kant (the pronunciation of whose name it is very important to treat with care) it survived into Adam Smith’s time.  And indeed the principles of empiricism and its successor analytic philosophy are all over economics – the rejection of certainty and of principles prior to experience, the preference for logic and mathematics above ethics and ontology (the study of “being”), and the rejection (ironically) or “irrational” impulses such as emotion.  Both became popular in Britain and the United States as they became the workshops of the world (and indeed the natural offshoot of classical economics, capitalism, has always been most popular in the Anglophone world.)  And in this capitalist heartland both economics and analytic philosophy continue to thrive.

But herein lies the problem: people don’t treat economics as a philosophy.  They treat it as a science. This is true as much of economists as of laypeople – as these articles, “High Priests and Lowly Philosophers: The Battle Over the Soul of Economics” and “Post-Autistic Economics,” suggest.  The message, approached in radically divergent manners in each article, is that economics as a discipline has been susceptible to co-optation by economists who advise on areas far outside their specific “technical” expertise, using their supposed understanding of the market to push a certain agenda. This turns not on the study of but faith in economics.  In the former the critique is of economists of the Neo-Keynesian school; in the latter it is of neo-classicists like Hayek (i.e. the right). In both cases a false air of certainty is assumed to promote what is essentially a system of ideological beliefs.

This is an entire novelty. In no “hard science” is ideology such an overwhelming issue as it is in economics, and in no hard science are those questions of ideology so irrelevant to the esteem in which the discipline itself is held.  (Can you imagine any Sokal Affair in economics, any similar rebellion against the presence of ideology period?)  None of the social sciences have effectively emulated economics’ grip on the public consciousness, either, though they are just as politicized and bitterly divided.  Political scientists, scholars of international relations, anthropologists etc. all deploy extensive models and statistical sets to make their points, but all are received with a patient nod and relative indifference to the public and the political class.

This is as it should be: ideas should slowly percolate through society to ensure that impurities are removed.  Yet economics has successfully removed this social filter, so any economist can – and will – go on television and pronounce loudly about The Way Things Are.  Worse than merely reserving unto themselves a privileged position in the debate on economic issues – which in the modern era have become all issues – economists have attempted and largely succeeded at removing them from the public sphere entirely.

Gone are the days when President Truman lamented the lack of “one-armed economists.” Instead we patiently and expectantly receive their pronunciamentos and, unlike any other intellectual discipline, they are separately polled about issues of public policy.  They get access that intellectuals in other fields could never dream of to the corridors of power. And their “expertise” effectively subverts not merely the rigor of their own discipline but the proper place of the market itself as subordinate to society. It is hard not to compare the economistic class to the religious leadership in Iran: they allow debate – as long as it does not deviate from the basic structure of the state (in this case, post World War II era market capitalism). Certanly this is not true of all. But it is true of enough of them.

It is in this context that Krugman cries out for “progressive” economists: essentially he seeks economists who will perhaps not take quite so slavish a line to traditional dogma and who will be effective at publicly backing up their assertions with some degree of certainty in the same way of the rest. He is lamenting an ideological hole in what is supposed to be an investigative and deliberative “scientific” discipline, built around careful examination of lived experience rather than endless speculation. This is the grand irony: the origin of economics in iconoclastic, atheistic and experiential British empirical philosophy has come full circle to brook a demand for exemplars of this sort of a priori certainty. Economists fell into just the trap that always plagued philosophy: assuming that their sense of reason was not simply better attuned but different from others’.

But economics is not different. It’s not a science. It is a “lowly philosophy,” and as the economic students at the Ecole Superiuere and elsewhere protested, much of its recourse to arcane models and Byzantine mathematics is designed not to enlighten but to obscure and facilitate endless appeals to authority: it is a sophistry on a grand scale. And despite the efforts of occasional Socrates figures in the economic community fighting this priestly class we have found ourselves in this situation, one in which our illusions have been shattered as comprehensively as at any time since Watergate – or indeed the Holocaust.

What we believe has been proved a lie: that economists knew has been proved a lie. This is the same phenomenon politicians suffered in the US and Britain after the 70s so earnestly documented by Adam Curtis in his documentary The Trap. A basic tenet of recent political history has been the monetarist assumption that politicians, like everybody else, are self-interested and not to be trusted. Somehow pointing that out seems to have exempted economists from the same assumption in the public mind. No longer. As usual the political class is bringing up the rear in this realization, but they too will come around. Then what of the temple and all its priests?

So no, thank you, Paul.  I’d not like a progressive economics.  Not, at least, until economists understand – or are made to understand – exactly what the capabilities and limitations of their discipline are.  It is bad enough to be confronted with specious vodou practitioners attempting to sell me a dogma thoroughly distasteful to me based on the fact that I cannot understand them: I positively refuse to commend the sale of my own beliefs utilizing the same disingenuous tactics. If Obama is going out of his way to avoid employing “progressive” economists, I’m glad. I hope desperately that his administration will not be guided by the advice of any economists, anymore than they would let decisions be made for them by a panel of lowly philosophers. At least philosophers know who they are.

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