Sunday, October 10, 2010


his blog, Nobel Prize winning economist Paul Krugman on how neoliberalism's dominance in his field has for many years forced non-Kool-Aid drinkers to write their papers and essays very carefully:

But fundamentally Meyer is right. And it has been going on a long time. By the early 1980s it was already common knowledge among people I hung out with that the only way to get non-crazy macroeconomics published was to wrap sensible assumptions about output and employment in something else, something that involved rational expectations and intertemporal stuff and made the paper respectable. And yes, that was conscious knowledge, which shaped the kinds of papers we wrote. So you could do exchange rate models that actually had realistic assumptions about prices and employment, but put the focus on rational expectations in the currency market, so that people really didn’t notice. Or you could model optimal investment choices, with the underlying framework fairly Keynesian, but hidden in the background. And so on.


A week ago, I wrote

This new documentary, Inside Job, apparently makes a very compelling argument that such groupthink comes from the top down: when the most prominent academics in a given field are in lockstep on a particular idea or ideas, the very careers of pretty much everybody else who is less prominent in that field depend on getting in line with the elite. I mean, in the humanities. As scientific as economics might seem, with its charts and graphs, and wonky vocabulary, economics is one of the liberal arts, a "social science," not one of the actual sciences--if, say, the top chemists in academia started believing that sodium and chlorine combined in a particular way do not make table salt, they'd no longer be the top chemists; indeed, they'd be out of a job. Not so in the humanities. Reality is much more mushy there.
I went on to observe how intimidating it is essentially to take on an extraordinarily well established and powerful institution as the study of economics. I mean, "you're not an economist," is probably the first thing that springs to mind when somebody as loud-mouthed and opinionated as me starts badmouthing the experts. But that's exactly the point: being a rank-and-file economist is probably the worst place from which to criticize the field of economics. Krugman gets a pass because he's at this point such a titan in the field--who's going to fire a Nobel Prize winner? The sad thing about that, however, is that Krugman's numerous criticisms of economics, as it is practiced, will in all probability not have much effect on that practice. Neoliberal true believers both play in and officiate the game; you don't score touchdowns unless you play by their rules. That is, you won't get very far in your career as an economist if you don't spout the party line.

Anyway, I felt this was a topic well worth revisiting. Economics is one of the key fields when it comes to contemplating public policy, and it appears to have become intellectually compromised. That ought to be screamed from the rooftops. Krugman fills in some of the details of how this intellectual corruption actually functions: not all economists agree with neoliberalism's grand ideal, but they do feel enough pressure to do so that they feel it necessary to give lip service, which means that, in addition to being intellectually compromised, the study of economics is also ethically compromised.

It is truly sad to observe that, given the stakes, a small group of academics struggling with their intellectual integrity is the least of casualties suffering from the dominance of neoliberalism. That is, people starve and die because of this shit. At least dissident economists have a roof over their heads.