Linkage!
Philip Mirowski in The Hedgehog Review, "The Great Mortification: Economists’ Responses to the Crisis of 2007-(and counting)" (via the Heterodox Economics Newsletter):
Lesson 1: This Is What Happens When You Banish History and Philosophy
The readers may struggle to find it within their own hearts to feel sorry for economists in their plight, and it is not the intention of the current author to stoke pity or even schadenfreude in readers. Rather, the task is to recount these events as a sequence of otherwise avoidable tragedies, the first of which must be conceded to have been the exile of history and philosophy from any place within the contemporary economic orthodoxy. After a brief flirtation in the 1960s and 1970s, the grandees of the profession took it upon themselves to express their disdain and scorn for the types of self-reflection practiced by “methodologists” and historians of economics and to go out of their way to prevent those so inclined from occupying any tenured foothold in reputable economics departments.
It was perhaps no coincidence that history and philosophy were the areas where one found the greatest concentrations of skeptics concerning the shape and substance of the postwar American economic orthodoxy. High-ranking journals, such as the American Economic Review, the Quarterly Journal of Economics, and the Journal of Political Economy, declared they would cease publication of any articles whatsoever in these areas, after a long history of acceptance. Once this policy was put in place, then journal rankings were used to deny hiring and promotion at the commanding heights of economics to those with methodological leanings. Consequently, the greybeards summarily expelled both philosophy and history from the graduate economics curriculum, and then they chased it out of the undergraduate curriculum as well. This latter exile was the bitterest, if only because many undergraduates often want to ask why the profession believes what it does, since their own allegiances are still in the process of being formed. The excuse tendered to repress this demand was that the students needed still more mathematics preparation, more statistics, and more tutelage in “theory,” which meant in practice a boot camp regimen consisting of endless working of problem sets, problem sets, and more problem sets, until the poor tyros were so dizzy they didn’t have the spunk left to interrogate the masses of journal articles they had struggled to absorb.
How this encouraged students to become acquainted with the shape of the economy was a bit of a mystery-or maybe it telegraphed the lesson that you didn’t need to attend to the specifics of actual existing economies. It was brainwashing, pure and simple, carried out under the banner of rigor. Then, by the 1990s there was no longer any call for offering courses in philosophy or history of doctrine any longer, since there were no economists with sufficient training (not to mention interest) left in order to staff the courses*.
Consequently, when the Great Mortification followed in the wake of the demise of the Great Moderation, those occupying the commanding heights of the profession were bereft of any sophisticated resources to understand their predicament. In a pinch, many fell back on the most superficial of personal recollections, or else the last refuge of scoundrels: the proposition that “we” already knew how to handle the seemingly anomalous phenomena, but had unaccountably neglected to incorporate these crucial ideas into our pedagogy and cutting-edge research. It takes some thick skin not to cringe at the performance of four famous economists at the January 2010 meeting of the American Economics Association in Atlanta, in a session expressly titled, “How Should the Financial Crisis Change How We Teach Economics?” Three out of four could not even be bothered to actually address the posited question, so concerned were they to foster the impression that they personally had not been caught with their pants down by the crisis. The fourth thought that simply augmenting his existing textbook with another chapter defining collateralized debt obligations and some simple orthodox finance theory would do the trick. No second thoughts for us foxes, thank you.
For the ragged remnants of economic methodologists, it was a sorry sight to watch a few older economists rummaging around in the stale vague recesses of memories of undergraduate courses criticizing Milton Friedman’s little 1954 benediction for believing whatever you pleased as long as it was neoclassical, and coming up with nothing better than badly garbled versions of Popper and Kuhn.13 Of course quite a few had premonitions that something had gone very wrong, but the sad truth was that they were clueless when it came to the analytical construction of an abstract philosophical argument in isolating just where the flaws in professional practice could be traced and assessing the extent to which they were susceptible to methodological remedies. Mired in banality, the best they could prescribe was more of the same. No wonder almost every economist took their philosophical perplexity as an occasion to settle internecine scores within the narrow confines of the orthodox neoclassical profession:
MIT v. Chicago, Walras v. Marshall, mindless econometrics v. mindless axiomatics, New Keynesians v. New Classicals, Pareto sub-optima v. rational bubbles, efficient markets v. informationally challenged markets…
This was all so boring one can’t help thinking it was being done on purpose, to lull the rabble back to sleep.
* I suspect that might be part of the reason why my papers on the methodology of economics were marked so highly by my lecturers last semester. Being heterodox economists themselves, they responded well to any criticisms of neoclassical thought; and the field of methodology being obscure as it is, they weren't likely to look too closely at my actual arguments. Not that I think they weren't good papers, and I'm glad they introduced me to Bruce Caldwell and Uskali Maki, methodologists both.
Note to self: Order a copy of Mirowski's Machine Dreams: Economics Becomes a Cyborg Science, which appears to integrate a number of my interests (history, economic theory, cybernetics, cognition).
This entry was originally posted at http://the-grynne.dreamwidth.org/880838.html and has
comments.
Lesson 1: This Is What Happens When You Banish History and Philosophy
The readers may struggle to find it within their own hearts to feel sorry for economists in their plight, and it is not the intention of the current author to stoke pity or even schadenfreude in readers. Rather, the task is to recount these events as a sequence of otherwise avoidable tragedies, the first of which must be conceded to have been the exile of history and philosophy from any place within the contemporary economic orthodoxy. After a brief flirtation in the 1960s and 1970s, the grandees of the profession took it upon themselves to express their disdain and scorn for the types of self-reflection practiced by “methodologists” and historians of economics and to go out of their way to prevent those so inclined from occupying any tenured foothold in reputable economics departments.
It was perhaps no coincidence that history and philosophy were the areas where one found the greatest concentrations of skeptics concerning the shape and substance of the postwar American economic orthodoxy. High-ranking journals, such as the American Economic Review, the Quarterly Journal of Economics, and the Journal of Political Economy, declared they would cease publication of any articles whatsoever in these areas, after a long history of acceptance. Once this policy was put in place, then journal rankings were used to deny hiring and promotion at the commanding heights of economics to those with methodological leanings. Consequently, the greybeards summarily expelled both philosophy and history from the graduate economics curriculum, and then they chased it out of the undergraduate curriculum as well. This latter exile was the bitterest, if only because many undergraduates often want to ask why the profession believes what it does, since their own allegiances are still in the process of being formed. The excuse tendered to repress this demand was that the students needed still more mathematics preparation, more statistics, and more tutelage in “theory,” which meant in practice a boot camp regimen consisting of endless working of problem sets, problem sets, and more problem sets, until the poor tyros were so dizzy they didn’t have the spunk left to interrogate the masses of journal articles they had struggled to absorb.
How this encouraged students to become acquainted with the shape of the economy was a bit of a mystery-or maybe it telegraphed the lesson that you didn’t need to attend to the specifics of actual existing economies. It was brainwashing, pure and simple, carried out under the banner of rigor. Then, by the 1990s there was no longer any call for offering courses in philosophy or history of doctrine any longer, since there were no economists with sufficient training (not to mention interest) left in order to staff the courses*.
Consequently, when the Great Mortification followed in the wake of the demise of the Great Moderation, those occupying the commanding heights of the profession were bereft of any sophisticated resources to understand their predicament. In a pinch, many fell back on the most superficial of personal recollections, or else the last refuge of scoundrels: the proposition that “we” already knew how to handle the seemingly anomalous phenomena, but had unaccountably neglected to incorporate these crucial ideas into our pedagogy and cutting-edge research. It takes some thick skin not to cringe at the performance of four famous economists at the January 2010 meeting of the American Economics Association in Atlanta, in a session expressly titled, “How Should the Financial Crisis Change How We Teach Economics?” Three out of four could not even be bothered to actually address the posited question, so concerned were they to foster the impression that they personally had not been caught with their pants down by the crisis. The fourth thought that simply augmenting his existing textbook with another chapter defining collateralized debt obligations and some simple orthodox finance theory would do the trick. No second thoughts for us foxes, thank you.
For the ragged remnants of economic methodologists, it was a sorry sight to watch a few older economists rummaging around in the stale vague recesses of memories of undergraduate courses criticizing Milton Friedman’s little 1954 benediction for believing whatever you pleased as long as it was neoclassical, and coming up with nothing better than badly garbled versions of Popper and Kuhn.13 Of course quite a few had premonitions that something had gone very wrong, but the sad truth was that they were clueless when it came to the analytical construction of an abstract philosophical argument in isolating just where the flaws in professional practice could be traced and assessing the extent to which they were susceptible to methodological remedies. Mired in banality, the best they could prescribe was more of the same. No wonder almost every economist took their philosophical perplexity as an occasion to settle internecine scores within the narrow confines of the orthodox neoclassical profession:
MIT v. Chicago, Walras v. Marshall, mindless econometrics v. mindless axiomatics, New Keynesians v. New Classicals, Pareto sub-optima v. rational bubbles, efficient markets v. informationally challenged markets…
This was all so boring one can’t help thinking it was being done on purpose, to lull the rabble back to sleep.
* I suspect that might be part of the reason why my papers on the methodology of economics were marked so highly by my lecturers last semester. Being heterodox economists themselves, they responded well to any criticisms of neoclassical thought; and the field of methodology being obscure as it is, they weren't likely to look too closely at my actual arguments. Not that I think they weren't good papers, and I'm glad they introduced me to Bruce Caldwell and Uskali Maki, methodologists both.
Note to self: Order a copy of Mirowski's Machine Dreams: Economics Becomes a Cyborg Science, which appears to integrate a number of my interests (history, economic theory, cybernetics, cognition).
This entry was originally posted at http://the-grynne.dreamwidth.org/880838.html and has
comments.