The 6th December issue of TLS had an important article by Paul
Collier under the heading “Greed is Dead” (unfortunately now behind a
paywall). It reviews 5 books which, in very different ways, subject the
economics discipline to an intellectual battering which has, understandably,
been building up a strong head of steam for the past decade. The titles give
you a sense of the drift of the arguments–
- “BLUEPRINT - The evolutionary origins of
a good society”; Nicholas A. Christakis
-
“HOW
BEHAVIOR SPREADS - The science of complex contagions”; Damon Centola
-
“LICENCE
TO BE BAD - How economics corrupted us”; Jonathan Aldred
-
“WINNERS
TAKE ALL - The elite charade of changing the world”; Anand Giridharadas
- “PROSPERITY - Better business makes the
greater good”; Colin Mayer
One of my posts at the beginning of
the year actually
concealed an important comment about economics –
As a social “scientist”, I have long had a healthy skepticism
about the overconfident claims of particularly economists. 2008, of course,
should have been the death knell for economics since it had succumbed some
decades earlier to a highly-simplified and unrealistic model
of the econom”y which was then starkly revealed in all its
nakedness…..Steve Keen was one of the first economists to break ranks very
publicly way back in 2001 and to set out an alternative - Debunking Economics – the naked emperor
dethroned.
This coincided with economics students in Paris
objecting to the homogeneity of syllabi
and reaching out to others – creating in the next 15 years a movement which has become global
This is a good presentation on the issues
(from 2012) and a little Penguin book The Econocracy – the perils of leaving
economics to the exerts by Joe Earle, Cahal Moran and
Zach Ward-Perkins (2017) reflects their experience of stirring things
up on the Manchester University economics programme. The book’s sub-title says
it all!
Dani Rodrik is one of the
few economists with a global reputation to support them (Ha-Yoon Chang is
another) and indeed published an important book recently reviewing the state of
economics - Economics Rules – the rights and the
wrongs of the dismal science; (2016) which was nicely reviewed here
The Financial Times recently reviewed several
other such books - so the situation is not beyond repair but we have to be
realistic. Academic economists have invested a lifetime’s reputation
and energy in offering the courses they do - and neither can nor will easily start
offering programmes to satisfy future student demands for relevance and
pluralism….. they will calculate that the chances are high that the next
cohort will be less critical and more pliable...
Paul Collier’s review is more optimistic. As you can see from the
excerpt, the 5 books he has selected are only a sample of the torrent of
critical contemporary analysis of the economic discipline – whose basic
assumptions have indeed been compared to a religion. The first 2 books
illustrate for Collier the scale of the scientific case against the economists’
worship of greed as the primary human motive. Sociability and cooperation have
rather been the prevailing norms. Collier’s opening sentences seems to reflect his
reading of the third book since it talks of
“Economic Man
being conjured up in the 1950s by the economics profession. Our understanding
of human evolution was then more rudimentary than it is now…Economic Man was
duly characterised not just as greedy, lazy and selfish – which to some extent
we are – but as only greedy, lazy
and selfish”
Geoff Hodgson is an important political economist who would certainly
not agree with the idea that the economics profession created a Grankenstein
only in the 1950s. Indeed he wrote an entire book which traced the origins of
this selfish model of man back a couple of hundred years - From pleasure machines to moral communities – an
evolutionary economics without homo economicus; Geoff Hodgson (2013)
More perhaps to the point, I was in the early 1960s an Economics
student at Glasgow University (where Adam Smith had taught in the 18th
century) and did a bit
of a confessional last year about what I absorbed in those years…..
Despite my 4 years of economic studies (and some
years actually teaching it to others!), I make no claim to understand the
nature of the global plague that has befallen us in the past few decades. I
start to read the books which promise to clear my confusion but find that my
eyes soon glaze over….
I toiled during my studies in the early 1960s to make
sense of its focus on marginal calculations and “indifference curves” but can
remember only the following lessons from my four years engrossed in economics
books
- the strictness of the various preconditions which
governed the idea of (perfect) competition – making it a highly improbable
occurrence (and the greater reality being oligopoly);
- the questionable nature of the of notion of
“profit-maximisation”;
- the belief (thanks to the writings of James Burnham
and Tony Crosland) that management (not ownership) was the all- important
factor
- trust (thanks to Keynes whose work was dinned into
me) in the ability of government to deal with such things as “exuberant
expectations”
- the realization (through the report of the 1959 Radcliffe
Commission) that cash was but a small part of money supply. Financial
economics was in its infancy then.
For someone with my education and political motivation
and experience, however, my continued financial illiteracy is almost criminal
but not, I feel, in any way unusual. Most of us seem to lack the patience
to buckle down and take the time and discipline it needs to understand the
operation of the system of financial capitalism which now has us all in
its thrall.
We leave it to the "experts" and have thereby surrendered what is left to us of citizenship and political power. Like many people, I’ve clicked, skimmed and saved – but rarely gone back to read thoroughly. The folders in which they have collected have had various names – such as “urgent reading” or “what is to be done” – but rarely accessed. Occasionally I remember one and blog about it.
We leave it to the "experts" and have thereby surrendered what is left to us of citizenship and political power. Like many people, I’ve clicked, skimmed and saved – but rarely gone back to read thoroughly. The folders in which they have collected have had various names – such as “urgent reading” or “what is to be done” – but rarely accessed. Occasionally I remember one and blog about it.
The economics I was taught was, of course, Keynesian (Paul Samuelson was the bible) – but pluralist Tom
Wilson may have been its moderate Professor but the staff included the well-known Marxist Ronald Meek.
If Collier (and Aldred) are correct and the economics virus has been
with us for only 60 years, then I can understand their optimism about the possibility
of change. But I’m on Hodgson’s side of the argument and think things will be a
lot harder to shift.
Update; the Dissent magazine has also found critical books about economics for review - four more!
Update; the Dissent magazine has also found critical books about economics for review - four more!
Further Reading; Heterodox Economics Directory (6th edition 2016)
