The use of HET in the crisis debates

A Duke maling-list message just made me aware of this article from the University of Chicago magazine, “Chicago Schooled: the visible hand of the recession has revitalized critics of the the Chicago School of Economics.” It offers an interesting and quieter counterpart to the Krugman debate which is turning into a settling of old scores, but the bottom issue is the same. How much is the Chicago genealogy, from Murphy and Cochrane back to Heckman, Pelzman Fama, Becker, Stigler, and, of course, Friedman (how comes? ) among many others, and its market enthusiasm responsible for the present crisis.

Even more interesting is the use made by the author of recent works by historians of economics, mentioning Ross Emmett and Phil Mirowski.

Here’s the extract:

“The 2008 market collapse shocked the global economy like nothing since the Great Depression. Given the breadth of the failures involved, casting blame at a single school of thought may seem overly simplistic. But the Chicago School’s ardent championing of market forces, says Ross Emmett, a Michigan State University economist who studies the Chicago School and heads an oral history of it, makes it “a convenient locus” for anger.

Chicago’s market focus developed as the original Frank Knight/Jacob Viner Chicago School—also anti-Keynesian but skeptical of markets’ efficiency and mathematical models—waned along with World War II. The government’s influence on the University’s scientific-research funding disturbed then-president Robert Maynard Hutchins, according to Philip Mirowski, professor of economics and the history and philosophy of science at Notre Dame, and coeditor of the new book The Road from Mont Pelerin. (The Mont Pelerin Society was a Friedrich Hayek–led debating organization dedicated to advancing free-market ideals, including markets’ ability to efficiently show information.)

In 1946 Chicago already had a neoclassical presence: the Cowles Commission for Research in Economics, funded by Alfred E. Cowles III, scion of one of the Chicago Tribune’s owners. Cowles’s postwar staff at Chicago included nine future Nobel laureates, among them Kenneth Arrow and Tjalling Koopmans, who won Nobels in economics before Friedman. Cowles promoted an economics more scientific than the theoretical type that dominated the field at the time. But he was left-leaning. Hutchins wanted specifically anti-statist thinkers, Mirowski says, enlisting help from the now-defunct libertarian William Volker Fund to hire, among others, Aaron Director at the Law School, Friedman (Director’s brother-in-law) in economics, and Hayek at the Committee on Social Thought (the economics department nixed Hayek). Cowles would decamp to Yale in 1955. »

As an aside, there is increasing references (on the blogosphere) to the paper by Robert Gordon on the development of macroeconomics since the 70s in the light of the current crisis which was presented at the 1st ISHET. It is viewed as a more balanced criticism of the current state of macro research than Krugman’s.

Is the next step the recognition of HET as useful knowledge for economists in a time of crisis?

6 thoughts on “The use of HET in the crisis debates

  1. My bet:

    Next step: the recognition of Whig HET as useful knowledge for economists in a time of crisis.

    Krugman is advancing his candidature for New Pope of WHET (Paul the Second?), but while he is strong on the Whiggish side, he seems to falter on the HET side.

    1. Is it possible to be Whiggish when one sees oneself as in a “dark age of macro”? Conversely, I would be glad to see more discussion of “inverted Whig” history, wherein history becomes a collection of failures. It seems to me Krugman is making an honest effort to distinguish legitimate gains from illegitimate claims. (Math=good, but only when used to develop arguments, economic math as an end-in-itself [what Mirowski would call Bourbakism]=bad, but especially when used to justify policy).

      All in all, I’m following the very public unfolding of debates over the history of a discipline with absolutely rapt attention, because it certainly should be a good indicator of what academic history has accomplished and can accomplish, especially vis-a-vis insiders’ understanding of disciplinary history and its meaning for present practice.

    2. I understand neither the reference to Krugman (whom I barely mention in the post and who in not the author of the Chicago article), nor your reference to whig history. Do you think the author quoted here is making whig history of Chicago? He places much emphasis on Mirowski’s research on funding and personal and ideological fights.

    3. Sorry, I acknowledge that irony is not my forte. What I intended was to vent my gut feeling that, alas, recognition of HET as useful knowledge is highly unlikely in the world of current economics.

      The interesting references you provide in your post are almost hidden under the blogosphere cacophony of “macro wars” “saltwater/freshwater”, etc. They are not only more balanced than Krugman’s, but also more satisfactory in their use of HET.

      I am afraid what economists (and other observers) are getting from this is some kind of “War of the Whig Histories”, with Lucas, Cochrane et al. on one side and Krugman, DeLong et al. on the other. And my pun on Krugman was motivated because I cannot avoid to read in his posts and articles that he is seeking to reinstate Samuelson’s view of the evolution of economics after a three-decade gap of regress and obscurantism (“discontinous Whiggism” anyone?).

      Of course, I do not perceive any hint of Whiggism in the author quoted in your post.

  2. I think the matter is, to repeat Craufurd Goodwin (2008:, that in times of crisis economists lose their confidence on their discipline and are thus more inclined to look to the past and search for alternatives. It is also important a point made by Tiago in a comment to another post: it is “necessary” for economists to criticize their field when things are bad in order to look less dangerous to the public’s eye.
    However, the use for HET will surely vary in such moments: practitioners will likely stick to Whig HET because this is part of how they see their own field to evolve, and others will use HET as another weapon against the enemy to be finally defeated (which includes the “inverted WHET” mentioned by Will Thomas). But as Beatrice points out, it is interesting that the UoChicago Magazine does refer to Phil and Ross. The question that remains is how much of this movement towards using the past will translate into more academic prestige for HET (or will this “look to the past” be confined to review articles at JEL/JEP and the blog/columns sphere?).

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s