History of Economics Playground

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Inside Economics

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Charles Ferguson’s Inside Job forces us to fundamentally rethink the connections between economics and policy making. This entangled relation runs along a number of dimension. First there is the performativity of economics: in which ways do economic theories shape the ideas of policy makers and hence the policies they enact (i.e. the Donald MacKenzie story)? Are economists and their rational market hypothesis, CAPM models and what have you responsible for the deregulation that led to the recent financial turmoil? If so, how should economics and its relation to policy making be reorganized institutionally? Second, is it at all possible to be politically and ideologically value-free as an economist? If so, how do we distinguish a value-free economist or economic theory from value-laden ones? If not, should economists always state their ideological points of view in the first disclaimer-footnote of their papers? Are there other ways to sufficiently disentangle ideology from science? Third, should economists be allowed to be paid by the private sector for their academic work? Do we need an economic code of ethics or some other kind of formal arrangement to distinguish more clearly between academic credibility and financial gain?


Luckily, we economists need not figure this out all by ourselves. In fact, the last few years have seen a surge of books discussing the role of science in the contemporary for-profit world. Gaye Tuchman’s Wannabe U (2009) tells the story of the middle ranked university that aspires to become an elite university in an age of auditing and ranking in which universities are run by business men in business suits.  Yet, although the undertone is clearly critical, Wannabe U first of all is a careful and engaging ethnographic reconstruction of the archetypical Western university that had to transform itself in the 1990s from a public institution to a private enterprise. Moreover, it reads like a novel. 

The different contributions to Harold Kincaid, John Dupré and Alison Wylie’s Value-Free Science? (2007) discuss the topic from a philosophical and theoretical point of view. The basic message is that the old fact-value distinction cannot be maintained. To some extent, that is an almost trivial point. The more important argument, therefore, is that although at some level we all know that the fact-value distinction cannot be maintained, we constantly act as if it does. That, the authors argue, is a fault of contemporary society that needs to be cured. Scientists should make clear how facts and values mingle in their work, politicians should not be allowed to rely on “objective facts,” and moral convictions should never be argued to be based on values alone. Yet, convincing as the book is, it is somewhat unfortunate that the authors do not translate their calls for action into concrete measures.     

Theodore Brown’s Imperfect Oracle (2009) is the book of a distinguished chemist, successful university administrator, and well-informed reader of sociology and philosophy who towards the end of a long career reflects on the waning authority of science. The key premise is that with all the problems the world currently faces, there is so much science could offer. Yet public opinion accepts less and less of science and scientists. Thus, the central question Brown addresses is how to restore the authority of science. This book should perhaps be read not so much as a deep or new account of the place of science in contemporary society, but rather as a well-written intellectual autobiography of one of those scientists who ruled the universities in the post war decades.  

In contrast to these three general accounts, the different contributions to Hans Radder’s The Commodification of Academic Research (2010) seek to investigate the topic from the bottom up. The book provides detailed accounts of the politics and economics of patents on academic research, the management of data , and the different sources and consequences of financial interests in academic research. Sometimes, the authors force themselves somewhat unnecessarily to infer more general claims about science, private enterprise, or autonomy. But the chapters offer enough in simply describing the different elements of corporate science.  

To save the economic discipline it would certainly help when all economists would read Kincaid’s Value-Free Science?. But before answering the bigger questions of whether economics should have a code of ethics, and how universities and research should be funded and organized, we would perhaps do good to first understand the system itself. What would most help the discussion now are detailed sociological, economic and historical accounts of how the economic discipline, economic departments, and economists function and have functioned. Both in the bygone days of the public university and authoritative science, and in the contemporary era of auditing, ranking, financial interests and business suits. Much like Tuchman’s Wannabe U or Radder’s Commodification perhaps. By chance, that happens to be what I’m doing and I’m willing to offer my expertise. Who gives me grant? I’m (still) quite cheap.

Written by Floris

20 April 2011 at 5:41 pm

@INET-BW: Careers

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Guess who came for lunch? Gordon Brown. He just strolled in, was in the neighborhood, with the K-9s and the barrel chested security detail. And he is a terrific speaker!

Before I say anything of his message, and because the messenger was a big portion of the message, I was left wondering about careers. It used to be that a politician out of office would travel some (any) desert and return for another fight, another cycle, Churchill and Nixon come to mind. Politicians these days, such as GW Bush, go out of office and into celebrity: they write a book, they go on speaking tours.

Gordon Brown has a book, and he did not forget mentioning it. But he appears to inch towards a different career prospect, other than inspirational speaker: from national statesman he is ready to become a world statesman (Tony Blair is trying that too). The vision offered to the digesting masses was of a world unbalanced by a epoch making transformation, where the West will be dwarfed by the ascending middle class of the South and the East (worryingly not Africa) remaking financial and value flows. His proposal is to continue and conclude what he began but was myopically interrupted by democracy in May 2010: a new set of global agreements that regulate debt and currency adjustments but that also assures continued growth and prosperity for the new world order that is coming on the horizon. …. a new Bretton Woods.

The punchline was pleasant and appropriately sweet: an invitation to the imagination of scholars, with a bit of poetry as fits British eloquence, to envisage the worlds that are coming. We need economic fiction?

Written by Tiago

9 April 2011 at 7:05 pm

Posted in Events, Politics

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Sociobiology and vegetarianism

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Claude Lalanne - L'Homme à Tête de Chou

My Dear Clément,

As you may know, I am a vegetarian. I have never thought much about the reasons of my rather recent conversion to vegetarianism, though as a historian and as a postmodern constructivist, I would tend to rely on socio-cultural explanations and as an economist, on more rational justifications – whether the two are mutually compatible, I ignore. To be a vegetarian in France is not an easy task. You have to struggle with the weight of culture: foie gras, confit de canard and so on. At least, I can still enjoy the incredible range of French cheeses we have, though I have to override the fact that most contain animal rennet – but I am not against inconsistency, which is what  every non-vegetarian tries to pinpoint about you as soon as they learn about your diet, as if they did not commit inconsistencies themselves all the time. One of the reasons I turned to vegetarianism is justly because I was a bit fed up with this French cultural exception. We believe we cook better food than most of the other world citizens – and the latter often believe it to be true as well. Yet, most of our ‘wonderful’ French cuisine is about putting a piece of factory farmed meat in a frying pan with chopped shallots and pretending it is a work of art – by comparison, I would invite you to taste my wife’s bread-and-mushrooms vegetarian terrine or my own eggplant and chick-peas tajine, which are far better. When I try to make my dietary choice more ‘rational’ – because my interlocutors seem to favor rational explanations – , I tend to rely on economic arguments. The fact that we eat only 0.25% of the edible livestock, that most of the resources that could serve to feed people in developing countries are instead used for feeding factory farmed animals, that 8 to 11 % of the weight of the meat that is sold to consumers actually consists of wasted waters that the profession calls “fecal soup” and that we actually eat only a minor portion of the livestock we kill – as Jonathan Safran Foer notes in Eating Animals (p.50): ‎”Imagine being served a plate of sushi. But this plate also holds all of the animals that were killed for your serving of sushi. The plate might have to be five feet across” – are all arguments that make me quite comfortable as a vegetarian.

At this point of my message, my dear Clément, you must wonder what this has to do with you, right? Don’t worry. I am now coming to my central question. I have never been much convinced by naturalistic/positivistic justifications for vegetarianism and anything that relies on animal suffering to claim animal rights, though striking a chord, does not seem convincing to me as a rationale – you would have, to be convinced, to compare the suffering of factory farmed pigs to that of starved children in Ethiopia or slaughtered Libyans, which is not something I want to do. But other people find these arguments perfectly suitable for grounding their claims, such as most people at PETA. I was then wondering whether sociobiology has been used by animal rights advocates. After all, sociobiology use the exact same tools to study social behaviors in human and animal populations, and by doing so, it tends to instill the idea that animals, like humans, may have rights too. [Of course, as some eminent (sic) researchers in our field have tried to show you during your first conference presentation a few years ago, it can also argue the exact contrary, that because we behave just like animals do, we can be treated the same way, hence the campaigns of sterilization of some populations, and so on.] For instance, in Jonathan Safran Foer’s book, I was surprised to see some PETA member mentioning Richard Dawkins‘s research as one that helps ground animal rights. Culturally, I think it is quite interesting because people tend to think of sociobiology as kind of right-wing entrenched because of its hard scientism, positivism and probably because E.O. Wilson himself seems to fit the image of the Republican type of public intellectual. But it might not be necessarily so. I think that you would agree that sociobiology as it is currently practiced is an Anglo-Saxon invention and it is precisely where vegetarians are the most numerous and the most vocal – I would put aside religious vegetarianism, as practiced in some other areas in the world. Have you ever located in the sociobiological literature a fraction of authors that more or less explicitly advocate animal rights? Admittedly, it does not have a lot to do with the history of economics, yet I am quite interested in the question.

Kind regards,

Your friend Yann

Written by Yann

24 February 2011 at 9:19 am

Politics as History of Economics

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Since almost a year now I’m involved in local politics (a few long evenings a week). Apart from all the obvious differences between the business of politics and the business of history of economics, I’ve noticed an unexpected similarity. Whenever politicians receive information of any kind, they will immediately do two things: 1) Check where the information is coming from, and 2) See how they can spin the information to their advantage. Politics is founded on the firm belief that there is no such thing as objevtive, or value-free information – even though part of the rhetoric is that there is. Ok, you might say, surely you knew that before entering politics. I did, although I had never realized how strongly and deeply rooted this conviction is in every nerve of the political process. But I also think that how readily you, reader of this blog, recognize the self-evidence of this observation, testifies to how similar the history of economics perspective is to the political perspective. Although we do different things, we historians also treat all information – publications, archival sources, interviews – always and everywhere very explicitly as the product of its source. That is, we never treat the information without taking into account the origin of the source.

But academic economists (including the IMFs and OECDs of this world) do. In fact, when we as historians of economics are alerted by fact that economists could take some information about some phenomena as THE truth, we are alerted in the very same way as are politicians about the same economists. Ipso facto, when economists are alerted because we introduce this source- or context-dependence in the discussion, they are alerted in the same way as they are alerted when politicians start questioning the source of their information (or worse, start spinning it). Economics is a self-perceived body of value-free, objective knoweldge in between two realms of politics and history of economics with surprisingly similar world views.

Ps: Not implying any of the three is better than the other of course….

Written by Floris

2 February 2011 at 9:00 pm

Zombies

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The economic crisis has a new trope. Zombies. An Australian economist, professor, blogger has published a book titled Zombie Economics: How Dead Ideas Still Walk Among Us. And Paul Krugman wrote a recent op-ed “When Zombies Win.” (it is not the first time he played with the term.) The message that Quiggin and Krugman express is that some ideas rise from oblivion, and just won’t go away, won’t die, i.e. zombies.

I believe I know a thing or two about zombies. I watched, at a very impressionable age, The Night of the Living Dead, credited to have originated the concept (zombies are the most modern of monsters), although I always preferred the zombie comedy not being a horror buff: Army of Darkness, Zombieland and that classic Shaun of the Dead. I am now adept of zombie videogames playing often with my main bro Left 4 Dead 2, and looking forward to play in Call of Duty: Black Ops where I will choose between JF Kennedy, Nixon, McNamara or Castro and fight for survival against zombies in an underground complex (really! no kidding!).

These are my extensive zombie credentials, and with those I feel confident to say a thing or two about the semiotics of zombiehood.

Survival. The first and last element of all zombie tales is survival. Financial crisis is dire but it seems hardly the matter for life and death struggle, chainsaw in hand. In this the analogy presses urgency, but not action. Survival in a zombie world is to escape, keeping out of sight, lay low, and wait for someone with big guns to come clean the place. This is not Krugman’s approach who wants us to go out there and fix the economy…

Sadism. In most of its comedic and particularly in its videogame versions, the real pleasure of zombiedom is sadism, and indulgence in its exploration. Zombies look like people but their status as infected or cursed allows you to dispense of them with extreme prejudice. The human body is dehumanized, and somehow it’s ok. Here is what worries me most about the zombie analogy and the crisis, that it invites some level of dehumanization of those that are your opponents, these zombies ideas are also zombie people, and it is ok to terminate them with righteous violence. I don’t predict physical extermination, but a unhesitating deletion of the other from public discourse is not implausible.

Closure. Along with sadism, the underlying theme of a zombie story is that of a loved one (or a peer) that cannot rest, cannot go in peace, and that is incensed by a hunger for your flesh. Tough call. Zombie narratives are about letting go, about forgetting. How do you kill a zombie? You destroy his brain, his memory, his mind, his idea. This is a hot subject in science studies right now: the construction of ignorance, of forgetting. Take the work of Naomi Oreskes on climate change and her Merchants of Doubt: like the tobacco companies many decades ago trying to deny the links between smoking and cancer, the climate change deniers are today attempting to turn back the clock on knowledge. Krugman and Quiggin might be claiming that pseudo-science is holding us back from knowledge, but as an historian I worry about their appeal for forgetting and closure. As an historian I sympathize with the zombies. Sure if they bite you you will get very ill, but i plan to keep my distance.

(this post is all the more appropriate since AMC is doing a marathon of the first season of its Walking Dead)

Written by Tiago

19 January 2011 at 5:33 am

Posted in Media, Politics, Web

Tagged with , ,

Is it time?

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More random thoughts about the wikileaks cablegate

Of course, there are all these discussions about the consequences of such disclosure for international relations, its influence on American and worldwide public opinions.

But what about the consequences on scholarly historical work?

Two random links to begin with:

“Why Wikileaks is bad for scholars “, by international politics Fletcher School professor Daniel Drezner

US embassy cables: a banquet of secrets in The Guardian , by essayist/ public intellectual/ journalist (?) Timothy Garton Ash

Any other reactions by scholars/ public intellectuals you’re aware of?

Is the forced “declassification” of such recent historical material, at such a huge scale, a blessing or a curse for international relations scientists and for historians?

Are they/we “equipped” intellectually to deal with such material, to analyze its context, its subtext, its “truthfulness” ? To make sense of it? To tell a story out of it? What does the material reflect: the course of history, actions, opinion, prejudices, decisions, other? How distinct/close   is/should be  the work of a scholar as compared with the work of these journalists at the NYT, The Guardian, Der Spiegel, who are trying to sort out these millions words, cut through it, report it, make sense of it to the reader? Is it their very short horizon? Does it mean it will necessary take the historian a 1/5/10 years immersion into the material to tell the story behind such and such cable? Is it at all possible? What will the exploitation of these cables say about the possibility to write contemporary history? Or if that material is unimportant/ unexploitable/ secondary/ flawed/ biased, why and how is it so?

Does any precedent exist in history/ history of science/ history of culture/ history of economic something? I mean, is there any instance you know in which the unanticipated early disclosure of some historical material have forced historians/ analysts/ journalists/ story tellers  to reconsider/ rewrite their stories?

Do historians/ scholarly archivists in relation to historians have any duty in the face of such flow of material (setting aside questions regarding the legality of the disclosure) : do they have to sort the material, provide finding aid, reference it?

And if these are not the right/ meaningful questions to filter what is currently happening, what else?

Written by Beatrice

10 December 2010 at 8:34 pm

The adviser

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Two days ago I saw Austan Goolsbee at the Daily Show (I wish I could share the video but wordpress mangles it up). He did his usual clever, fast but then a bit too fast, tripping on himself. Compared to Christina Romer, Goldsbee is a very different kind of Chairman of the Council of Economic Advisers. Most Chairman are not like him. They are on call of the President, write their reports, do whatever they do backstage and go the Hill to answer questions from the “other” branch of government. And then there are folks like Leon Keyserling that exploded the intended passivity of the job by starting a public fight on economic policy within the White House. And folks like Walter Heller, the Chairman during the Kennedy Administration, that was never shy from publicity, was regularly profiled in the magazines and made it to the cover of Time (twice!).

Goolsbee is of the Heller variety, take away the glasses. He goes public, to comedy shows, to talk shows, to YouTube, paladin for the policies of the President. He poses pedagogically, but his message is a bit less than learning and a bit more than propaganda.

Written by Tiago

28 October 2010 at 1:12 am

Mid afternoon sigh

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Why is it that everytime I write the words “economics’ cultural authority” my referees from history and other social sciences, read “neoliberalism’s cultural authority”?

Written by Tiago

13 September 2010 at 7:42 pm

Posted in Politics, Publics

Tagged with

The historian and the judge

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I might have earlier confessed my appreciation for an Italian early modern historian, Carlo Ginzburg. I am a fan of all things Ginzburgian: the tales of radical ideas of Benandanti, or his famous Menocchio; the description of history’s evidential; and a politically inflected book, The Judge and the Historian. Ginzburg writes in the latter book about the trial of a friend. A present day radical, autonomist, intellectual, Adriano Sofri was charged of the crime of murder on the evidence of a self-confessing repentant. A territory that was not unfamiliar to the historian. Confessions of heresy and confessions of political conspiracy are not that far between. And the historian is trained to reconstruct scenes of crime, and belief, turned cold and barren by time. Ginzburg teaches us that the historian can known the mind and practice of the judge intimately and hold justice in contempt.

But what is true of the historian looking into the courtroom, is true of the judge looking out. Baltasar Garzon is the Spanish judge that made headlines when he prosecuted Augusto Pinochet and forced the dictator to a few weeks of uncertainty and embarrassed the Labour government to argue for Pinochet’s save return to Chile. All that Garzon does is controversial. Some of what he does is law. Some is also history. In one of his latest projects he has sought to reopen the wounds of the Spanish Civil war, 70 years past, to reconstruct crimes, but also to reconstruct meanings. For what is at stake is the job of the historian: making the past intelligible, in equal measure close and removed, to examine a story with characters filled with life and humanity but that are no longer living, that are no longer us.

Written by Tiago

6 May 2010 at 3:33 pm

Delusions of grandeur: meeting at Duke to discuss the Krugman critique

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Paul Krugman’s New York Times article, How did economists get it so wrong? (September 6, 2009) was no doubt designed in part as a grenade to be lobbed at economics departments: to arouse anxiety and initiate discussion.  In that aim, if no other, it succeeded.  Last Friday, the grenade went off at Duke University, as the Center for the History of Political Economy hosted a department wide seminar to discuss the article.  The gathering was marked by a general sense of unease and unhappiness: some were annoyed by Krugman’s hypocrisy and tone and some were annoyed with the economics profession.  But many, as it turns out, still think that the greatest days of neoclassical economics are ahead of us and were very annoyed with Krugman for suggesting otherwise.

A macroeconomist, an economic historian and a historian of economics introduced the seminar.  The macroeconomist, clearly angered, promised not to speak for long, save to tell those assembled that the article demonstrated ignorance and vitriol: most of Krugman’s accusations were not true: macroeconomists were always trying to incorporate money and the financial sector into theory.  And as for Krugman’s argument that economists think that the more mathematically beautiful the model the better, nothing, we were told, could be further from the truth.  Testing theory against reality is all that matters to this macroeconomist.

The economic historian was less personally offended.  Krugman had raised some fair questions.  After all economists had not been sufficiently vocal in alerting the world to the unsustainable nature of the past few years and perhaps the emphasis on modeling had produced a certain selective blindness.  Finally, the financial sector had clearly not played the role in economists’ models that it should have done.  Still, the question remained: what is the ‘real’ problem here for economists?  Is this about the reputation of economists, a little bit of hurt pride; or is the economics profession actually part of the problem?  After all, the question was posed, how much influence does university economics really have on policy anyway?

Well, of course, I don’t know the answer to this question.  But judging from some of the comments from the room, it seems that most economists have a pretty high regard of their profession.  Not least of all Krugman himself for, as the panel member representing the history of economics pointed out, Krugman’s tone did not lack in arrogance.  For a start Krugman had placed himself above the profession even though he himself is as much implicated in his complaints as anyone else.  Moreover, were economists really to blame for the financial crisis: wasn’t the real problem with failed regulation, rather than economic theory?

Now it’s a funny thing.  Neoclassical economists working within the mainstream, either general equilibrium-ites or Chicagoans wouldn’t, I suspect, profess much love for Krugman, but they certainly do share his opinion when it comes to the importance of economics.  Thus we were told: if only the incentive structures for risk managers had been right, then these managers would have flagged up the risks to their bosses that were, apparently, all too evident in the value-at-risk models.  So the problem, it turns out, wasn’t the models (based as they were on only a few years data), but that economist hadn’t ALSO designed the internal management incentive structures.  But if you remain unconvinced by this then there was even more hubris to come.  It’s only a matter of time, we were told by another attendee, before the neo-classical approach can truly meet its destiny and provide a unified theory of everything (in the economy, just in case you wondered).  House values, financial sector leverage and option pricing, just three problems that will in time be solved.

So there you have it.  Perhaps those who thought that economists (including Krugman) were overstating their role in causing the crisis were right after all.  But, never fear, in the future ‘the general neo-classical theory’ of economics would be there to guarantee that things could never get of control again.  Well, that’s a relief.  Alternatively of course, some might suggest that the real battle in the room was between relative delusions of grandeur: the delusions of those who think that economists had caused this crisis and those who think that economists will in the future ensure we have no more.

To be fair, there were some dissenting voices in the room.  One contributor argued passionately that economics had reached such a level of arrogance that almost no economists were now taught basic skills, like how to read a balance sheet, a skill that would apparently have alerted many to the impending problems at the banks.  Another contributor suggested that economics could never be equipped to be able to definitively say when an asset was overvalued.  Modern economics after all is based on the idea that value is a function of the buyer’s personal assessment of value and utility.  How could economics ever say for sure that someone was overestimating what something was worth to them?  Were not questions about inflated asset prices moral and social questions beyond the realm of economics?

Still one suspects these comments fell on deaf ears.  As another contributor pointed out, the incentive structures in the profession were all wrong.  Such was the structure of modern universities that graduate students were so invested in current ways of thinking that they were always going to be unlikely revolutionaries in the discipline.  Economists misunderstanding incentive structures, institutions do play a role after all?? Never! I refuse to believe it!

Written by Chris Payne

21 September 2009 at 3:20 pm

Posted in Economics, Events, Politics

Tagged with

Getting younger and younger

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In the last few, summer, months I have been an unreliable blogger. It is going to get worse. One good reason is that I have set up a new blog that requires my attention.

For 7 weeks in September and October, I teach a class titled generically “History and Methodology of Economics”, which I have ambitiously re-named as “the politics of economics.” The course reviews literature on the place and role of economists in contemporary society from an historical standpoint. Because one of my goals for the class is to develop appreciation for the multiple interpretations of which economics is subjected to, and to the multiple uses given to economic ideas in public life, I asked them to participate in a course-blog. This will be 10% of their final grade. Their task is capture commentary on economics or uses of economics in unexpected places, notably in mass culture.

observer

From my brief, hands in the air, survey, nearly none of the students had experience with the blogging form. So they are learning not only about the practice of observing economics in its historical drift, but also about expressing themselves in a blogging setting. I leave you here an invitation to visit, to comment and to encourage on “Observing Economics“.

‘Mickey Mouse History’ @ HES 2009

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This generous, albeit unoriginal, assessment met my presentation at the 2009 HES meetings. It came from a prominent member of our profession. We share a profession. We don’t share a craft. We work on similar subjects and materials but we make of them different artifacts. After laborious cutting, assembling, and tinkering, I get an argument on how ideas co-produce society and culture, some of my colleagues conclude on the rightness of economic interpretation.

My folly?

My folly?

Politeness does not come with seniority and there is no reason why it should. Tenure is after all full dominion over self. However, lack of seminar manners towards an initiate, like me, seems to contradict the rhetoric of “nurturing” young scholars. It may be that contributions of the young are welcomed provided they remain within the fold of the old. It would be a strange reversal of the world if the established had to listen, or even consider, the arguments of the junior staff.

Despite my bitterness, and after all has been said, “Mickey Mouse” is not a bad label for someone trying to make sense of popular culture and economics’ part in it. And, I do have big ears…

Written by Tiago

1 July 2009 at 5:11 am

J’Accuse…! (or “on the spirit of animals”)

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Mister President,

If you may permit me, and with gratitude for the kind reception you once devoted to me, to have the attention of your just glory to remark that your star of justice, your joyful star, is in risk of being tainted by the most obscuring and indelible of threats.

Professor George Akerlof, Nobel Laureate of 2001, spoke in these terms to Bloomberg Radio on the 1st of April.

I feel that the most important animal spirit about the job market is what is creating the number of jobs we have. And for that, I think confidence is one. I think that stories about the economy is another. And the general feeling by the public, that the possibility that people may sell snake oil… And there is a long chapter about that.

Only today I heard Professor and Judge(!) Richard Posner speaking to Bloomberg Radio:

Animal Spirits is a John Maynard Keynes expression, and he said – and I think very insightfully – that because businessmen operate in a very uncertain framework, you known, uncertain environment… If you build a plant and its not gonna yield revenues for several years, you are really taking a shot in the dark. Because in a few years your markets may change, competitors may eat you alive, and so on. So you need some feeling of confidence, spirit, daring. And in a depression the economic environment becomes so uncertain, that people begin to freeze. So you see a lot of hoarding…

(Posner also adds that Frank Knight was an influence on Keynes. Sure, and the Easter Bunny was roommate to Santa Claus. No?)

Here is what John Maynard Keynes actually wrote:

Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits – a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.

It is, I hope apparent, that Keynes idea of an urgency to action, the animal leap away from reason and best judgment, has nothing to do with either “confidence” or the drive of the “entrepreneur.” It is not the memory of man Keynes that I wish to preserve from blemish. It is mine and the public’s right to sanity in preserving the meaning and sense of words, their power to guide our thoughts. In Akerlof or Posner there is just nothing animal about them spirits.

I have but one passion: to enlighten those who have been kept in the dark, in the name of humanity which has suffered so much and is entitled to happiness. My inflamed protest is simply the cry of my soul. Let them dare, then, to bring me before a court of law and let the proceedings take place in broad daylight! I am waiting.

With my deepest respect, Sir.

Written by Tiago

20 May 2009 at 7:53 pm

Two cultures, three cultures, and feeling dizzy

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2628723One of those people that have initials for their first name, CP Snow is famous and infamous for a lecture given 50 years ago at Cambridge University. In “Two cultures and the Scientific Revolution”, Snow indicted the humanities for halting the progress of society. The literary inclined Universities were unwelcoming to the knowledge and methods of technologists and natural scientists. (A likely third culture might be social scientists, whether angels or devils, I don’t know if Snow specified.) In the New York Times book review section Peter Dizikes, a science writer, thought again about the Snow essay and tried to get something fresh and contemporary out of it. And it seems quite a struggle to make that text speak again. The world seems less binary without the Cold War. Dizikes concludes hurriedly:

the aspect of “The Two Cultures” that speaks most directly to us today. Your answer — and many different ones are possible — probably determines how widely and deeply you think we need to spread scientific knowledge. Do we need to produce more scientists and engineers to fight climate change? How should they be deployed? Do we need broader public understanding of the issue to support governmental action? Or do we need something else?

The equivalent of the “two cultures” is a bureaucratic decision about what kinds of big science to fund? I guess that means the humanities lost, but then again it was never their war…

Written by Tiago

24 March 2009 at 10:24 pm

Imagining the “reckoning”

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In Obama’s speech yesterday he mentions the “day of reckoning.” He says it only once in the sentence: “Well that day of reckoning has arrived, and the time to take charge of our future is here.” after mentioning “we have lived through an era where too often, short-term gains were prized over long-term prosperity; … Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.”

boschThe idea, which William Kristol finds “little ominous coming from a candidate of hope and change” is remarkably effective in capturing media attention, and maybe the public’s imagination. All news media used the sentence to summarize the speech – check google news search.

The question for me is why does it seize the imagination? In my mind it calls up an image, Bosch’s horrid paintings of confused nakedness and deformity. But what do western media see when it is conjured? Surely the staging of a trial, also the dividing of the world between saints and sinners? The news articles don’t help, some show a thoughtful Obama, others a solemn Obama, yet others show him playful. Maybe it calls no image, but primes you to a sense of justice, righteousness and comfort in the knowledge that someone above the fray will separate the angels from the sinners, and make the world intelligible again.

Written by Tiago

25 February 2009 at 7:08 pm

Posted in Media, Politics

Tagged with , ,

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