How economists became so timid

From Eric A. Posner and E. Glen Weyl, that was then:

Self-styled American and European radicals, for example, helped end monarchy and expand the franchise. The free-labor ideology of European radicals and American Radical Republicans helped abolish serfdom and slavery and establish a new basis for industrial labor relations. The late 18th and 19th centuries also witnessed the liberal reformism of Jeremy Bentham, Smith, James and John Stuart Mill, and the Marquis de Condorcet; the socialist revolutionary ideologies of Pierre-Joseph Proudhon and Marx; the labor unionism of Beatrice and Sydney Webb; and, influential at the time but now mostly forgotten, the competitive common ownership ideology of Henry George and Léon Walras. This ideology shaped the Progressive movement in the United States, the “New Liberalism” of David Lloyd George in Britain, the radicalism of Georges Clemenceau in France, even the agenda of the Nationalist Chinese revolutionary leader Sun Yat-Sen. The Keynesian and welfare-state reforms of the early 20th century set the stage for the longest and most broadly shared period of growth in human history.

And this is now:

So where are the heirs of the political economists? Political economy has fragmented into a series of disparate fields, none of which has the breadth, creativity, or courage to support the reformist visions that were crucial to navigating past crises.

…Yet even as economists retreated from visionary social theory, the power they wielded over detailed policy decisions grew. A notable feature of this policy guidance was that it shared the narrowness of economists’ research methods. Policy reforms advocated by mainstream economists were almost always what we call “liberal technocratic” — either center-left or center-right. Economists suggested a bit higher or lower minimum wage or interest rate, a bit more or less regulation, depending on their external political orientation and evidence from their research. But they almost never proposed the sort of sweeping, creative transformations that had characterized 19th-century political economy.

How to explain this timidity? As with many professions endowed with power (like the military), economics developed strict codes of internal discipline and conformity to ensure that this power was wielded consistent with community standards…

The upshot is that economics has played virtually no role in all the major political movements of the past half-century, including civil rights, feminism, anticolonialism, the rights of sexual minorities, gun rights, antiabortion politics, and “family values” debates.

There is much more at the link.  I am not sure I have a single endorsement or criticism in response, other than to say that I view MR as, among other things, a fifteen-year running commentary on the economics profession and its ups and downs.  In any case, beware complacency!

And do not forget about the authors’ new and stimulating book Radical Markets.

Hat tip goes to Bonnie Kavoussi.

Comments

"How economists became so timid"

Because their friends mock them and women don't want to date them?

+1

mebbe economists are timid in Virginia (referred to by many in the midwest as the itchy state) because the most important economics paper of the day has the methodology of a 1980s
east german spying operation where one branch of the economics dept
is secretly recording another branch of the economics dept. writing down the
words they don't like and counting them in order to create a narrative about jobs in
the field of economics. sorta creepy right?
isn't this why pretty much everbody in the movie the death of stalin except stalin goes around whispering for 4o years?

contrast this with biology where you take a couple ovaries
slice and dice em stainem and stab em in the nads
with steely knives and if you get the right combination
of men and girls working empirically side by side you more likely to get
a paper that will have objective measurable benefits to pesky ovarian
pathology that is all too common in the trump era
fun, right?

all we are saying is
brothers in a band called snot goblin are eventually gonna run
into creative differences more easily ameliorated by
a solid biology degree based on
rock hard empiricism
whether or not stormy comes
that doesn't make economics evil
we just gotta agree to be friends

snot goblins could literally study biology in colorado
it is nguyen-nguyen

"But they almost never proposed the sort of sweeping, creative transformations that had characterized 19th-century political economy."

Is it more important for an economist to show fidelity to the truth, or to make a "difference" with sweeping radical theories?

Sure, political economists I guess were at the forefront of the fight against slavery in the 19th century. It goes without saying that there is a very strong moral argument against slavery. But is the economic argument equally strong?

Robert Fogel, in late 20th century, wrote in his Nobel winning work, that slavery was actually quite profitable at the time of its abolition, that slaves were actually treated a LOT better than previously imagined, and that the revolt against slavery was a moral one (one of the great Awakenings) and not one driven by economic reason.

Does that mean Fogel was timid? No. He was just committed to the quest for truth, however inconvenient it may be.

There is always a space for moral arguments. There is more to life than reason and numbers. But I don't think it is a good idea for economists to get into those moral debates while claiming to discuss economics. They can do so by setting aside their economist hats. I'd be fine with that.

"... political economists I guess were at the forefront of the fight against slavery in the 19th century ..."

No, Irish immigrant conscripts were at the forefront of the fight against slavery, even if they hated blacks. Ironically, the draft was a form of slavery not imposed upon the intellectual class. However, economists, and other historical (hysterical?) master baiters, can always write themselves into the lead role of any historical movement, all from the comfort of the ivory tower.

As for the rest of us, well, we have work to do.

self-styled American and European radicals, for example, helped end monarchy and expand the franchise. The free-labor ideology of European radicals and American Radical Republicans helped abolish serfdom and slavery and establish a new basis for industrial labor relations.

American radical republicans were also Europeans, who were intent on confiscating the land of the American owners and killing them if they objected or, at the least, moving them to land thought to be worthless. Being pro-abolition made them feel good about themselves and washed away the sins of a conquest comparable to that of the Mongols. According to the Protestant/Puritans it's more evil to make a person pick cotton than it is to kill them and take their property.

It's no secret what happened: the mainstream in economics has become anti-government. Indeed, it has become so anti-government that the U.S. trade negotiators with China have demanded that China reduce the size of its government because all that government spending is making China too powerful, both economically and militarily.

I am not sure how you can really think this is true. I view it as the opposite. Economics shows that government involvement leads to disaster, but the politics of most economists tends to go left (like pretty much all academia) so they are stuck between facts and ideology. I mean, have you heard of Paul Krugman???

Thank you for making my point for me. To mainstream U.S. economists, "government investment" is an oxymoron. Yet, those same mainstream economists complain that China has an unfair advantage because China's government makes enormous investments in its economy. Those silly Chinese, they just don't understand capitalism. The arrogance of the U.S. demand is matched by the ignorance of the economists who fail to recognize the inconsistency. What's depressing is that any mainstream U.S. economist who might point out the inconsistency would lose professional esteem for doing so.

I don't think I've made your point... I think you are wrong on both premises. The fact that governments can game the system does not mean that gaming the system (i.e., public subsidies) is the way to achieve a better end result. It's like saying that cheating in any sport is the superior model because it will end up in more wins for the cheating side.
Economists understand that at the economical level, but sometimes have trouble accepting that at the political level. It is actually the opposite of what you just said.

+1

It is, after all, called "the race to the bottom", is it not?

Economics shows that government involvement leads to disaster

No, actually. It doesn't show that at all. Where did you get that idea?

>So where are the heirs of the political economists?

Sitting around cranking out all the pro-statist "research" they can, in the desperate hope of getting cited enough times to snag a paying job in media or academia.

Type on, brave warriors.

+1

The lack of self-awareness of these nerds is astounding. Not to worry, we're on to their self-serving game.

There is a story, which I believe is true(?), that surveys of students show less compassion after they take economics.

My criticism would be that once you commit to market outcomes as "best" it is hard to get excited, motivated, about anything.

The just-so story absolves all.

Correct. The just-so story is the post-hoc narrative, well described by Michael Gazzaniga, published in economic journals. Hey, don't knock 'em, those stories are good for the economy of economists.

You assume greater understanding leads to greater compassion. Kids' default position is great compassion, that what they've learned for many years. They learn it may be more nuanced than that.

so populism is bad except when it isn't

Pretty much.

Populism by anyone to the right of Bill Clinton? Incipient fascism!

Populism by anyone on the left? "The people, the lovely people, have spoken."

It seems to me, too, that identity politics can be characterized in a similar way. It's okay for my tribe, but if someone else does it, it's bad bad bad.

Am I missing something here? Friedman and Hayek were public intellectuals as well as great economists, and engaged the public in discussions of libertarianism. Maybe Posner's biases led him to forget those two.

The philosophy advanced by Robert Nozick and John Rawls were both heavily influenced by economic theory.

Charles Murray is a free-ranging social scientist who has discussed myriad economic issues. Look how well he has been treated!

The atmosphere of conformity, correctness, uniformity, and oppression in modern universities make it hard to say anything unless it is too technical and narrow for the mob to understand. You might want to look at the new controversy at George Mason and the Koch Brothers.

Note that Karl Marx was not an academic. Nor was David Ricardo, or Henry George, or J. S. Mill, Malthus, or Proudhon. Nor were the Webbs for most of their lives. Academics mostly hold big-style reformers in contempt.

+1. The Hayek/Friedman influence on Thatcher/Reagan was way more meaningful than the gaggle of social issues you rattled off over the past half-century.

It's like no one remembers the 1970s, when the leftward march of history stalled out.

Relevant link:

https://www.effectivealtruism.org/articles/ea-neoliberal/

which I stumbled on here (also a good read):

http://slatestarcodex.com/2018/04/30/book-review-history-of-the-fabian-society/

Free market economics were instrumental in the fall of the Soviet Union and the policy prescriptions which followed. They also played a big role in the development of China.

Since 2007, though, economics seems to be at sea. True, Ben Bernanke may have saved us for a deep depression, but economists seem to lack the answers nowadays, or perhaps the courage to articulate them.

Murray is a political polemicist who wants to reduce social spending. He is attacked because his political conclusions and positions are generally unpopular. Which is pretty standard stuff.

He's not a polemicist at all. He is an advocate. He produces trade books rather than academic work.

Correct. He mostly quotes the work of others, and is none too scrupulous about checking its validity if he likes the conclusions.

Alternative title: "Why did economists become so complacent?"

I don't think you can blame the academic environment, given that in most of the other social sciences academics open profess radical, far-left ideas. I'd be more inclined to blame the fact that economists actually have power and influence and don't want to ruin that by being anti-establishmentarian.

What a bogus argument to compare a handful of people from the late 18th and 19th centuries to the entire economics profession since the 1960s. It could only come from America, where radicalism has indeed been suppressed since the 1960s. I could pick out a handful of interesting recent political economists who have had great global influence with ideas about changing society. Most obviously Varoufakis, Piketty and Stiglitz (who is also top-tier among plain-old economists), without even reaching back toward Friedman and earlier points.

"Economists have hitherto only interpreted the world in various ways; the point is to change it."

I find this a curious attitude for someone who was an historical determinist convinced of the inevitability of the proletariat revolution.

Just kick back and relax, Karl. Maybe focus on not treating the actual people in your life abominably, you know? Start by cleaning up your room, eh?

"Cleaning up one's rooms is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people.
The abolition of cleaning one's room as the illusory happiness of the people is the demand for their real happiness. To call on them to give up their illusions about their condition is to call on them to give up a condition that requires illusions. The criticism of cleaning one's room is, therefore, in embryo, the criticism of that vale of tears of which religion is the halo"

Signed, the teenage Karl Marx.

To be fair, Karl Marx doesn't break the top 10, when it comes to bad Communists.

So now we are gradingmon a curve?

Economists realised that radical (in the left wing sense) reforms were a stupid idea.

Keynes (plus Robinson, Kaldor, Kalecki and the whole gang) was wrong, JK Galbraith was wrong, Marx was wrong, the Webbs were wrong. Henry George was sadly ignored by the powers that were and continues to be ignored by the powers that be.

We reached the end of history thanks to messrs Friedman and Hayek. It's all boring technocracy from here.

Nah. Fukyama was wrong. Unlike socialism, capitalism was not envisioned and implemented, it just emerged, collecting defenders after the fact.

And it's far from a perfect system, and there is plenty of suffering to go around, and people will always naturally and correctly wonder how to improve the system.

At this point, Marx is just a symbol for the justifiably (and unjustifiably) discontented to rally around. The fact that it winds up one's enemies is just a bonus. I don't see this dynamic ever going away, because the liberal democratic welfare state will always look worse than an easily imagined but impossible Utopia.

I have sympathy for people trying to make things better, so long as there is appreciation of the horrors of Utopian 'solutions'.

Fukuyama is much smarter than that, and the book was much broader than the title. He still tends to be right, and a fine woodworker.

https://www.instagram.com/p/_9wVEonQhN/

He is a good follow on Twitter as well.
@FukuyamaFrancis:

https://twitter.com/FukuyamaFrancis?s=09

"I have sympathy for people trying to make things better, so long as there is appreciation of the horrors of Utopian 'solutions'."

This, more or less.

"Nah. Fukyama was wrong. Unlike socialism, capitalism was not envisioned and implemented, it just emerged, collecting defenders after the fact.

And it's far from a perfect system, and there is plenty of suffering to go around, and people will always naturally and correctly wonder how to improve the system."

Re: far from a perfect system...

You've just restated Fukuyama's thesis, as I understand it. He never said perfect! Never. It can and will be tweaked.

Yeah, sorta. Maybe the difference is one of rhetoric. I don't think Fukyama imagined Marx would be rehabilitated, but it seems clear to me that today, he is as popular in the USA as ever.

Like I said though, it's mostly symbolic. Nobody sane talks about the state running factories anymore. Although deep thinkers still get linked on this right-of-center website calling for 'mandatory unionization' and other nonsensical piffle.

We shall always have those promoting such stupidity. I thought Fukyama envisioned that these arguments were over.

"And it's far from a perfect system, and there is plenty of suffering to go around, and people will always naturally and correctly wonder how to improve the system."

Not that there isn't a lot of suffering but at least abject poverty in the world has fallen form 40% in 1980 to 10% today and the World Bank predicts a further drop by 2025. That seems mostly due to innovations that were largely developed in open capitalist countries.

> Like I said though, it's mostly symbolic. Nobody sane talks about the state running factories anymore

No, but upon noting that health care is a growing part of the economy they talk about the state running that. And they talk about putting "Czars" with discretionary regulatory power in charge of industries.

We should all be terrified of economists with theories seizing radical control over our economic lives.

One thing the old political economists understood is that man has never lived independent of society.

It is an ahistorical fetish of modern libertarians that they can live independently of society.

And certainly society is inclusive of "government" dating back deep into human history and probably shared with social animals. Squint, and a cimpanzee troup
governs itself. With their own versions of Stormy Daniels, no less.

"It is an ahistorical fetish of modern libertarians that they can live independently of society." [CITATION NEEDED]

An adapted version of a Who song -

'I'm going Galt
And when I want to go Galt, I'm going mobile
Well I'm gonna find a home on wheels, see how it feels,
Goin' Galt
Keep me moving
I can pull up by the curb,
I can make it on the road,
Goin' Galte
I can stop in any street
And talk with people that we meet
Goin' Galt
Keep me moving, mmm

Macroeconomics is not an empirical science, so it is likely that the most renowned thinkers have achieved their renown due to rhetoric rather than actually having correct theories. In other words it is good we don’t change society based on some BS dreamed up by an academic.

Sensible economics is certainly empirical, but the rest of what you say has merit.

Spare us the big thinkers.

"...economics has played virtually no role in all the major political movements of the past half-century..."

It depends on the definition of political movement. If anti-globalization is assumed as a political movement....Joseph E. Stliglitz comes to mind . When the audience wants to listen how bad is globalization, he delivers.

Indeed, this a review of economists participating in the political debate around globalization https://www.economist.com/news/finance-and-economics/21701501-economists-who-foresaw-backlash-against-globalisation-consensus

Wouldn't it be fairer to say (as that article does) that Stiglitz warned?

And strangely, the anti-globalists who arose did it while hating on Stiglitz!

Give me some of that old time Commie religion! It was good enough for Mao, it’s good enough for me!

"Sailing seas depends on the helmsman,/
Life and growth depends on the sun./Rain and dewdrops nourish the crops,/Making revolution depends on Mao Zedong Thought./Fish cannot leave the water,/Nor melons leave the vines./The revolutionary masses cannot do without the Communist Party./Mao Zedong Thought is the sun that forever shines."

Here's a graph of GDP growth over the last 500 hundred years:

https://en.wikipedia.org/wiki/World_economy#/media/File:World_GDP_Per_Capita_1500_to_2000,_Log_Scale.png

Maybe if you're an economist who isn't crazy, you look at that graph and think that maybe radicalism isn't what's called for in the present circumstance?

"Visionary social theory"?!?!

People read Hayek, Orwell, and Popper (and others), all of whom eviscerated -- rightly! -- "visionary social theory". Popper called for piecemeal social engineering, and that was a wise, prudent, circumspect thing to propose. And it isn't visionary social theory.

We are not falling for visionary social theory again.*

* Hopefully.

Indeed, a I was reading the summary I was wondering if they authors had any awareness, let-alone counter-argument to Popper.

> But they almost never proposed the sort of sweeping, creative transformations that had characterized 19th-century political economy.

Aaaand, does the profession really want to be responsible for the next Marxism.

But we can note that the horrors or Communism were not Marx' fault: we was just one more ignorable thinker. The fault lies with the Bolsheviks and the other people who actually went and put the Dictatorship of the Proletariat into practice.

The fault might also lie with the mass of western intellectuals who supported the commies (or the nazis and other bad guys) but even that sort of movement is still quite different from academics churning out radical visions in the ivory tower.

Timidity in economics is a good thing. When I look at economic history and even at other economies today, I see a lot more ways things can go catastrophically wrong than ways they can get better.

Yes, substitute "humility" for "timidity" and the negative connotation goes away.

Excellent comment.

Grand ideologies are are useless at best, destructive at worst.

Maybe economists realized that it was important to have a some sort of sound theoretical and empirical support for their ideas. Praxeology is nonsense.

Social researchers qua social researchers should play no role in movements, and whole disciplines should play no role.

including civil rights, feminism, anticolonialism, the rights of sexual minorities, gun rights, antiabortion politics, and “family values” debates.

Economists acting as economists have little to contribute to a discussion of any of these issue sets as the salient sources of contention are not economic question. The two qualifications to that would be to ascertain the effect of contemporary discrimination on labor and housing markets and to assess the theses incorporated into such things as 'dependency theory'. In so doing, you're there as a counselor, not as a militant.

If economists have had a collective failure in recent decades, it was (1) not pointing out to members of the public that John Kenneth Galbraith's bibliography of academic research was threadbare; and (2) an unwillingness to say in clear terms that Bradford deLong and Paul Krugman were embarrassments. You don't need these people.

Who wants to be sociology? Well, this guy, apparently.

Undoubtedly this is the case for the developed world, my impression is that in countries like Chile, economists has transformed the economy and society in many ways during the last 40 years to the extent that little of the 70s can be seen in the country.

Economics was in its infancy in at the dawn of the 1800s. All the low hanging fruit was picked by about 1960.

Are they really trying to hint that the writings of Jeremy Bentham, Smith, James and John Stuart Mill were a cause of serfdom and slavery vanishing in Britain? Time travellers, were they?

Your pal Robin Hanson was thrown under the bus very publicly and you sat on your hands. Timid is right.

Robin Hanson is a cuck.

Tyler's silence was very disappointing to me

Read the works of the great political economist Henry Simons. They defy easy categorization and are sadly out of print, yet still entirely relevant

Perhaps the real driver of liberalism was technology and specialization that increased productivity and freed people from the land. And created greed and envy among ne'er do wells who could live off rich patrons and learned how to rig the system.

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