Dr. Phil – or how I stopped worrying about economists and embraced neoliberalism.

mirowski_397x267At the latest History of Economics Society Meeting, I, with a number of friends and colleagues (co-bloggers Béatrice Cherrier, Till Duppe and Floris Heukelom), participated in a roundtable devoted to “the practical challenges of writing recent history”, organized and chaired by E. Roy Weintraub. On this occasion, we all gave speeches – mostly drawn from personal experiences – that addressed how writing the history of recent economics is different from doing the history of older economics and the kind of practical issues it required us to consider. Most of our talks addressed at some point or another the relation to current economics: on the one hand, writing the history of recent economics resonates with current research in the field, but on the other hand, economists can disagree – sometimes in print – with the kind of accounts that historians construct about them. So, in sum, writing on recent economics can help you being noticed by economists, but sometimes there is attention you may just want to avoid. Then, at the end of what was an interesting, if somewhat polite, discussion, Philip Mirowski intervened, saying that our talks were, in his opinion, too focused on our relation with economists, that we have no reason to fear them, that they have no interest in history whatsoever, whereas, at the same time, science studies scholars are mostly concerned with economics as a subject, because they feel that the prevalence of economic imperatives on the academia is a threat to the humanities departments in which they are located.

My feeling is that, even though Phil expressed his opinion in his own distinctively provocative way, he was right and that, on the other hand, by focusing too much on the relation between history of economics and economics, we may not be fully wrong, buJHETt still, at the very least, mistaken. For at least one part of the argument is true: economists, on the whole, are not interested in the history of their field and are not likely to be interested in it anytime soon. A bibliographic research I have undertaken over the past few years with my friend and fellow Pedro Duarte – forthcoming in the Journal of the History of Economic Thought -, focusing on the historical pieces published in major economics journal, led us to reach quite clear conclusions:

The trends we observe … seem to illustrate … [the] increasing estrangement between economists, when writing to the profession at large in their general top journals, and HET. Not only have we shown that, in contrast to the 1970s, fewer HET papers have been published recently in most of the top journals we studied, but we also demonstrated that the papers that have been published are so diverse in the methods they use and the issues they address that it is very hard to see them as a coherent whole—not to mention as part of a unified subfield. In particular, the fact that most of these articles rely not on specific tools and methodologies, but, rather, on surveys and quite general statements may have contributed to the conflation of historical investigations and literature surveys. Therefore, practicing economists themselves have become the main narrators of their past, whereas historians are less and less seen as the expert community to be properly consulted when accounts of past economics are needed. … As a result, the issues that are central to the latest developments of the history of economics … and the new tools that historians are using to address them … have yet to make their way into the mainstream literature.

51l-3HtHuvL._SX331_BO1,204,203,200_On the other hand, sociologists, historians, political scientists, and even management scholars are increasingly drawn to the history of recent economics. They do so because they feel that economics is an important part of today’s social, political and cultural environment and they want to understand it. Of course, there’s nothing new about this. Another friend and colleague of mine, Loïc Charles, has done work on 18th century economics with practicing historians, showing how economic thinking was intertwined with a lot of things happening at the time: international trade (including, most notoriously, slave trade), the colonization of the Americas, the French revolution, etc. But what is specific to the recent – postwar – period, is that economic thinking is not just mixed with other types of knowledge and practices, but increasingly,  is THE knowledge which is used as a way to ground, to legitimize all knowledge and practices. This recent move toward the economization of every aspect of our society is what researchers have come to designate as “neoliberalism”, and this is the one of the main concepts that makes the study of postwar economics a possibly interdisciplinary venture, one that has a lot of chance to attract readers and create scholarship.

For years, I have resisted this “neoliberal” narrative. I thought that neoliberalism was a complotist construction, that it was hard to pretend that a small group of Austrian economists, even helped by some well-organized think tanks, could influence society at large so as to create a culture so ubiquitous that we are all influenced by it, whether we like it or not. But now the literature on neoliberalism has attained a critical mass, and I must say that, altogether, it provides a good analysis grid of what’s happening in the world, even though we think that there is much to criticize in all of these contributions. There’s of course, Foucault’s 1979 course at the College de France, which falls short of details, but sets up the big picture, but in recent years, many other books have helped developed the neoclassical narrative: Wendy Brown’s philosophical account of how neoliberalism is detrimental to democracy, Bernard Harcourt’s assertion that neoliberalism is transforming all citizens into punishable subjects, Sonia Amadae’s claim that the neoliberal citizen and consumer is the strategic rational actor, described in non-cooperative game theory, Elizabeth Popp Berman depiction of the economization of academic science, etc. And of course there are all of Phil Miroswki’s contributions to the subject: see here, there, and everywhere.*

CSISo, is it convincing? Well, let’s take for instance Béatrice’s latest post. She talks about Paul Romer being appointed as chief economist of the World Bank. First, why should we be concerned about this? Why is it so special that there is a new chief economist whereas we do not seem to have much to say about Dr. Jim Yong Kim, who is an American (Korean-born) physician, and is the actual President of this institution? Well, maybe, it is because we feel that economic knowledge is going to be more important than medical knowledge when it comes to decide how countries need to be helped financially. That is something that the neoliberal narratives tries to explain. And what was Romer doing before he got this new position? I quote Béatrice, here: “Romer left academia to engineer a teaching and grading plateform called Aplia.” Some neoliberalism scholars have argued that this kind of platforms offer instances of the neoliberal transformation of education. And what about Béatrice’s last point on how “the replacement of McNamara and Chenery by Alden
Clausen and Anne Krueger in 1982 shifted the Bank’s philosophy toward a ‘Washington Consensus‘ consistent with Reagan’s program”? That is also the subject of many contributions to the history of neoliberalism. In fact, we now have a neoliberal narrative for everything: even TV series are subjected to it.

So, should we embrace all of it? Of course, not necessarily. These accounts are often partial and in need of qualification. Also, I am not claiming that every history about modern economics is underwritten by this neoliberal narrative. There are many other narratives to draw. But this is one strong reading of the current situation, and as such it needs to be addressed. This is also a fascinating laboratory for possible discussions between historians and sociologists of all social sciences, as well as with cultural theorists and political scientists. This is why I expect that when Pedro, Joel Isaac, Verena Halsmayer and I do the next HISRECO conference in Lucerne on April, 21-22 2017 (call for papers coming soon!!), the term “neoliberal” is going to pop up once again on several occasions.

*Not to mention the fact that even notorious neoliberal institutions have ended up acknowledging themselves.

Inside Economics

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.

@INET-BW: Upon leaving Mount Washington

Who goes with Fergus?

Who will go drive with Fergus now,
And pierce the deep wood’s woven shade,                    
And dance upon the level shore?                                         
Young man, lift up your russet brow,                                            
And lift your tender eyelids, maid,                      
And brood on hopes and fear no more.
And no more turn aside and brood,
Upon love’s bitter mystery;                                                        
for Fergus rules the brazen cars,                   
And rules the shadows of the wood,                 
And the white breast of the dim sea                         
And all the dishevelled wandering stars. 

The place invites poetry. By the way, all sessions can be viewed from the webiste – check out in particular the last session featuring Gillian Tett of the Financial Times moderating a disucssion between Paul Volcker and George Soros.

Here’s what it all looked like through an amateur lens.

@INET-BW: Of history repeating…

The Bretton Woods conference has a protean character. Talk in the corridors asks “what is it?” Some in the press (lots of press here) believe that deals are being made, the attendance of heavy hitters leads some to believe that consultations and strategies are being outlined for world government (Summers, Stiglitz, Brown, and yesterday Volcker arrived to close the event). The Tea Party protesters agree on the form if not the substance. The academics take seriously the title of the meeting “Crisis and Renewal: International Political Economy at the Crossroads” and its brief:

The 1944 conference was, famously, largely an Anglo-American affair, whereas today’s reconstruction must engage the larger European Union, as well as the emerging economies of Eastern Europe, Latin America, and Asia. In the years since the 1944 conference, the globalization of production, trade, and especially finance, has transformed our economy, but has not yet transformed our system of regulation or our tools of policy intervention. Indeed, our very habits of thought and speech lag behind the realities that we desperately need to think and speak about.

The program announces a desire to think and talk big, policy and reform for the planet, and the venue, Mount Washington Resort, suggests an even grander vision of what might be achieved. There is abundant mentions to Keynes (we started counting but then gave up). Some of the Keynesian referencing is thoughtful and substantive, but most of the order of the great moral example offered by the great Englishman, as Skidelsky once wrote in “Exemplary Lives” (you can find it in Times Literary Supplement 75 (19):1250)). INET appears sincere in its desire to bring history into the discussion of a crisis of economics, they are funding programs to foster the teaching of the subject, and a grant program to pursue its research, but in these meetings, history was relegated to the dinner party anecdote and to a construction of identity and legitimation. This is a media, visual, video, audio, blogging event (in which I am participating), to project the brand of the Institute and associate it with a glorious past, and the prestige of great past thinkers.

I suffer from an embarrassing Pavlovian conditioning, every time I hear the words “history repeats”, I blurt out Marx (Karl not Groucho):

Hegel says somewhere that all great historic facts and personages recur twice. He forgot to add: “Once as tragedy, and again as farce.”

Here we start at 7 am, and dinner talks go past 10 pm. Lack of sleep and high altitude are pressing me to a brutish mood, a Hunter Thompson fiendishness, fear and loathing state of mind. And I start howling for tragedy.

I don’t much mind the spectacle particularly when it is giving me access to folks that would otherwise never have spoken to us were we not wearing a “Staff” badge. I got a +30 min video interview with Brad DeLong, and I am in the shot. The real test of these meetings for me, and for those that want to see an effort at changing economics, was yesterday’s session by the Teaching Task Force. Two committees reported on INET proposals for reform of the economics curriculum. The UK group under the influence of Skidelsky parroted his calls for economic history. Not much progress in a year, he said the same at the Cambridge meeting and earlier still. I was left wondering what Skidelsky sees as economic history, and what benefits one might extract, all is left floating in self evident confidence. The US group had a better worked out vision, setting out plans to use INET online resources to provide materials to reach classrooms (the impact issue module). However, the US group’s suggestion of anthologies of texts, as alternative to textbooks, seems a weak attack on the textbook market. I was wondering if it was an appeal to the canon, that has crashed and burned in Literature and will never have a chance in Economics. It is likely that the teaching reform committee could not agree, to argue for substantive change you need to agree that economics needs changing, and that consensus is skidding down the slopes.

The weight of the 1920s decorated rooms, and the grey presence of so many headliners of the economics profession (which we are making the most of with the interviewing) is creating great confusion about what is “new” in New Economic Thinking. One line is nostalgia and it began with the opening session when Rogoff recalled with regret and humor how as a young man he was unengaged by C. Kindleberger’s teachings. (Its ok now, he recovered the notes.) Another is memory, that the models of past authors should not be so easily forgotten. But the strongest line is that we need more economic history in curricula and in public debate, and the example to follow is… Rogoff and Reinhardt’s This Time is Different? Not wanting to question their achievement, the book affords only the most weak defenses of historical scholarship, where time is flattened into a tractable dataset and agency and institution are dismissed by the law of great numbers. More worryingly this take on history does not question the place of the economist in the historical scene (that sociology thing again). In a trope that I saw repeated thrice, it was said that economics is at a stage where a Copernican revolution has occurred but one needs still to use Ptolomeic cosmology for a few decades more, for policy advice (the argument without celestial spheres has been made before the crisis, in 2006, in G. Mankiw’s “Economist as Engineer” piece to the JEP).

None of this is new, and worse still, none of it is very critical. New Economic Thinking is hard to win. For nearly a century philanthropic money tried to steer economics into interdisciplinarity and social and historical consciousness, in the 1970s they gave up (Floris will disagree, but despite the cases of behavioral economics I think the argument holds). And because change is so hard, there is a danger that INET gives up, and becomes a left of center think tank to argue the policy wars. The task of producing knowledge against the grain requires imagination. I would have wished to see the big headliners back to back with some new ideas from INET grantee portfolio. I would have wished more collaborative work and less staging speeching. I would have wished more time for debate and critique. I would have wished less farce and more tragedy.

Continue reading “@INET-BW: Of history repeating…”

@INET-BW: Interview with Barry Eichengreen, any requests?

We have been talking and video interviewing people at the conference, and we’ve narrowed down a small list of questions which we try to build on and have so far talked to Kenneth Rogoff, Brad DeLong, Ha-Joon Chang, Stephen Ziliak, Philippe Aghion, Jean-Paul Fitoussi, Barry Eichengreen and tomorrow we start with James Galbraith. Barry was really good about giving us 10 minutes after four solid hours of interviews, so we skipped the camera and did it old school while stretching our legs in direction of the drinks reception. In that spirit I thought I would share the team questions and an initial draft (hey, it’s late) of Barry’s answers. Any suggestions for whom we need to grab tomorrow or Monday?

How has your teaching changed following the 2008 crisis – have you used history more?
“I don’t so much teach history, as I do history. History has a certain utility for economists and as such it is a long existing discipline! But I teach it differently to undergraduates and postgraduates. For the former I try to give an integrated picture of the ‘world economy in the 20th century’ (which is also the title of the course). For the graduate students it is more methodology and exposing them to empirical controversies.

Which work in economics the most impressed you?”
“I would have to be less sleep deprived than I am to fully answer that question [he came in from the west coast 24 hours ago –Ben], but as I can see O’Rourke there, I would point to his book with Findlay,  Power and Plenty as a fine piece of work. Its overview and synthesis is real progress in Economic History.

How do you define progress in Economics?
“There is no single answer to this, but I worry that while we have been good at exporting our models to other social sciences, we have not been very successful on the imports front. So I think inter-disciplinarity is a key, which is why I have taken a masters degree in History and acquired a Political Science appointment.

How do you change economics?
The key is in training the next generation. There has been a disappointment I think due to the lack of radicalism after what happened in 2008, but I am not that surprised because for these things to change you need a generational change. While institutions and history may be of interest to students, senior staff members are unlikely to change what they have been doing for a very long time. But you need to train people, encourage top departments to take them and then they will be this new generation.