BADA BING! EQUILIBRIUM!
In his excellent article, Chris Hayes' Mafia terminology conveys some useful information, but it isn't the best word. When Tony Soprano strolls onto a construction work site, workers and supervisors alike are right to quake in their boots. By contrast, put an economist in the company of lay persons and he turns into a bowl of warm jello. And how could it be otherwise? After all, his or her methods require great effort to comprehend (an effort often unrewarded), and the policy prescriptions often affront perceptions of the national interest, not to mention common sense.
No, the zone of fear for elite economists is the Econ Department itself . . .
Tenured faculty tyrannize over the untenured and graduate students. Professors from elite departments loom over those from benighted realms. Grad students anxiously follow the ratings of their department. Are we top 20? Only top 30? Awwww . . .
Among the top ten, as among the rich, envy swells the greater. Number eight looks jealously at number four. Number three moans, why can't we be number one? In the academic context, this I suspect is not an unusual state of affairs. Perhaps there is an English Lit mafia as well. The differences are that a) the Econ Elite affects public policy to the general detriment or the working class, and b) econ is what I decided to take up, damnit!
Outside the academy, there is kryptonite everywhere to sap the super-strength of the would-be supermen of public affairs. In the world of policy, whether in politics, business, or trade unionism, the economist plays second-fiddle to a genuinely powerful person. His esoteric knowledge provides some currency for stuff that his patrons want to do anyway. The problem with economists is the system they are chosen to serve.
If you like the Mafia metaphor, it should be clear that the code of omerta has already been broken. We have the testimony of made men like David Card, Alan Blinder, Dani Rodrik, George Borjas, Joseph Stiglitz, and Paul Krugman. Professionally speaking, brilliant people like Sam Bowles, Duncan Foley, Herb Gintis, and Lance Taylor sleep with the fishes.
Krugman is the most prominent case. He was o.k. with most mainstream economists until he started writing columns eviscerating Republicans. Then there was grumbling about polemics and propaganda. Milton Friedman bloviated for years on the pages of Newsweek (or was it TIME?) but never came in for the same treatment.
I suspect that few if any of the inner elite will rise in their defense. Why bother? "Top o' the world, Ma!" We will have to make do with Tyler Cowen, which is ironic in this context. (Let me stipulate in passing that Tyler is a very nice fellow of great accomplishment.)
Tyler's department at George Mason University is itself a consequence of the Mafiosi organization of the profession's academic wing: a refuge for heretics. Originally there was just the gentlemanly James Buchanan and the crazy Gordon Tullock at Virginia Polytechnic Institute, founders of the mostly (but not entirely) reactionary "public choice" school (a.k.a. the "Virginia School"). They were not well-regarded by many of their peers in public finance, but they kept scribbling away. I believe they saw their mission as communing with their progeny and organizing them to be fruitful and multiply.
Way back in 1980, I actually applied and was accepted to VPI (they had night classes at Dulles Airport, of all places), and in the Federal government I worked with some GMU public choice folks in the middle 80s. Perhaps aided by the ascent of Reaganismo, JB and GT migrated from VPI to George Mason University, whose econ dept has become a big deal. It is a haven for the best and brightest of the Virginia School type, who have since spawned far afield from VPI. (The normal GMU economists are in the public policy department.)
Like the Acadians, the Virginia people underwent hardship, journeyed far, and have ultimately come to flourish. They are themselves heterodox, albeit in the anarchist/libertarian direction. They just don't like to advertise it. Tyler is defending an orthodoxy under which his own status is problematic. There is probably psychological research explaining this, and Tyler has probably read it.
Going to Tyler's points, the research on Dem v. Repub economists is irrelevant. First of all, many identifying "democratic" are a) intolerant of heterodoxy, and b) not very liberal. Second, many practicing economists do not inhabit the elite econ departments (or any econ department, as Jamie and Nathan have noted) that are held to represent the dizzy heights of economic erudition.
Tyler cites public choice as exemplary inquiry into power relations. The emphasis in public choice is on the depredations of public agencies, trade unions, and narrow interest groups. This can be interesting but it is small beer.
Tyler does not address the quoted words of economists of great stature who support the Hayes account.
Tyler's other argument is that heterodox theory is no damn good. He is basically hanging back, daring somebody else to propose a theory that he can knock down. In the present context, this would be a mug's game. No theoretical dispute is going to be settled here at TPM Cafe. The issue is not the acumen of long-standing, prolific, well-regarded academicians who think the wrong thoughts; it is the exclusionary, intellectual thuggery of the elite.
I have always found output from the mainstream (as well as the Virginia school) to be a very mixed bag. The tools that are provided can be useful, but they tend to be deployed to narrow, politically biased purposes. There are certainly insights to be had.
But there is some tipping point where even the use of the most conventional methodology to ends considered inappropriate will send a person's professional well-being off the deep end. Methodology is but one of several filters. Tyler has noted some biases himself.
Tomorrow: how can people so pleased with themselves be oh so wrong about so many things.
Comments (13)
Admittedly life is difficult for econ professors in the academy because they all refuse to accept tenure as a matter of principle, and in fact they demand that their department heads give them the harshest possible evalation against their competition every year. Many econ departments follow the advice of modern HR consultantcies and simply fire 10% of their faculty every year, based on their profitability as well as their academic output.
sPh
May 29, 2007 4:30 PM | Reply | Permalink
Here is an idea that might be interesting to consider;
Money is not a commodity. It is a public utility. As a medium of exchange and government obligation, it has far more in common with the public highway system, then as private property. We like to think of our bank acounts as personal property, but they are not a safe deposit box. That money is only in our possession when we need it, much like the section of road we are driving on is only ours as we need it. Everyone decries government debt, but it is an essential part of the overall investment pool. The same with Social Security. Where would that money be invested otherwise? The stock markets, real estate, etc. are flooded with liquidity already. If this surplus wealth wasn't being recycled through the public sector and back into the economy, it would be a much smaller economy.
If we understand money as a form of public utility, then wealth becomes as much a responsibility to the larger economy as it is a right to direct that economy. If money is simply one more commodity to be traded, then there is little obligation beyond the Darwinian imperative to maximize one's position.
When we tie it to a particular commodity, whether how much gold is in the treasury, or how much is needed to run the oil markets, then we give those who control that commodity undue influence over the rest of the economy. Those with the gold, rule. With the power this gives oil interests, energy conservation is unlikely, if not politically impossible.
This is an essay I wrote on the topic;
http://www.exterminatingangel.com/index.php?option=com_content&task=view&id=203&Itemid=118
May 29, 2007 5:51 PM | Reply | Permalink
I'm glad to see the academic economists getting the some of the knocks they deserve.
As a academic student of Corporate Strategy I found some of the insights from economics interesting and occasionally useful, but mostly at the level of the individual transaction and in Keynesian macro economics (as mildly modified by uncle Miltie.)
But the very power of Keynesian macroeconomics and its ability to be expressed mathematically in my opinion destroyed much of the applied usefulness of the discipline. Being able to reduce large collections of transactions to money terms and then aggregate them mathematically gave an appearance of intellectual power that simply isn't there. The reason is that the largest single social factor in any business isn't economics. It's power. And power cannot be quantified. The result is that most academic economists give it a bit of lip service, and then assume it away in their real analysis.
Any analysis of labor economics that is not based primarily in the relative power of labor and management hands off all the power to management and blames labor for the problems that result. That's the current situation, and even a very high percentage of workers buy it. That's essentially ignorance in action taken advantage of by a few wealthy individuals to grow their own wealth and power.
Unfortunately, in academia the economists have also taken over the discipline of finance. A good experienced lawyer or accountant can provide much more useful training and effective analysis, but for some reason the ability to develop an overall model of the situation and apply mathematics to it seems academically more acceptable. But I guess most academics don't get out and do enough real consulting (or maybe even (shudder) work. sorry for the four letter word.) to realize what they are overlooking, so the model is all they have to teach. Needless to say it is the academic "modelers" who run their Mafias. Hands-on experienced individuals need not apply. Tenure, naturally goes to the "modelers" at relatively young ages, and they rarely let the experienced outsiders into their club. The experienced individuals are generally too old when they have gone through the academic hoops required for tenure.
That's enough ranting for one morning. Needless to say, the subject is one that warms my heart.
May 30, 2007 6:21 AM | Reply | Permalink
Quite right! And those same HR policies are the reason why Enron is currently such a great organization to work for, and why it provides such outstanding products.
May 30, 2007 6:27 AM | Reply | Permalink
Max,
The author above is not distinguishing between the money involved in measuring and facilitating an individual transaction and the overall money supply. But I don't think his comment rates a "1."
The money supply is, in fact, a public good. The demand for money is highly dependent on the health of the economy, and the supply of fiat money is unlimited unless some central agency limits it. And since most of the money supply is created by banks, that is the primary reason why banks have to be regulated. The failure of so many unregulated banks after 1929 was a major element in the causes of the Great Depression. Regulation of banks and of teh money supply is required to keep the economy from becoming a slave to the random variations of the money supply.
The idea that the value of the dollar should be tied to any real commodity such as Gold is one that has been discussed for at least a century, and is currently held by Alan Greenspan and Congressman Ron Paul right now to name just two specific individuals. So I think he is working on a valid idea, he just needs more time and education to undertand it better. As it is, he is ahead of at least 95% of the American population - including most economics undergraduate students.
So I don't think he rated a "1." For that reason, I overrated him to balance the low rating.
Brodix,
You are headed in the right direction. Keep at it. Don't let the Libertarians get you, the woods are full of them, and late at night you can hear thenm howling.
May 30, 2007 6:55 AM | Reply | Permalink
Rate as you like, and more power to ya.
Off-topic comments annoy me, and to me the comment was off-topic. The author has also posted it in a number of places, so it also qualifies as spam.
May 30, 2007 7:00 AM | Reply | Permalink
I must say that I find Economists of all sorts to be taken with themselves. I am not convinced that they have nearly the influence on public policy that they think they do. They blather a lot, yep. They certainly affect monetary policy. They probably f*cked the poor with welfare "reform." But mostly, who cares what they have to say?
In my academic department we have way too many economists who like to dominate discussion and give papers where other economists come and make comments and praise each other. But absolutely no one in the world is ever going to follow their recommendations. They are pointless stupid papers that go nowhere.
I know plenty of academics at plenty of places who think EXACTLY the same thing. Economists are as thin as water and as beneficial as dutronium.
May 30, 2007 11:13 AM | Reply | Permalink
is it like a pyramid scheme? i.e. the remaining folks can be borglike and assimulate what's left over and grow in power?
To boldly go...
May 31, 2007 3:36 PM | Reply | Permalink
blogs are a people's medium! so I gave 'em a 5. maybe you could have asked why he thought it wasn't off topic.
To boldly go...
May 31, 2007 3:45 PM | Reply | Permalink
Boy, I get into trouble for saying these things about universities... but I see-- from an insider, that beauty is in the eye of the beholder.
To boldly go...
May 31, 2007 3:54 PM | Reply | Permalink
They probably f*cked the poor with welfare "reform."
Do you really believe this? People in socialistic countries tell me that socialism sucks because the people won't even change their own light bulbs. Just as I am "prolife" because I love life, I am also "prowork" because I love to keep busy in the community (work).
To boldly go...
May 31, 2007 3:58 PM | Reply | Permalink
Before my experience in academia, I worked the front lines of welfare. I can tell you that your simplistic reference to "love to keep busy" bears no relation to the reality of high school dropouts who may have cognitive problems and likely also have drug and alcohol problems.
It isn't sensible to just demand that they do better. That is what you do with cognitively abled with no mental health problems.
Welfare "reform" provided a boost to the workforce at the bottom rank, pulling down the wages of others who already just had a toe hold. It wasn't quite so visible in the late 90s during the boom period of our boom-bust cycle. Now we blame the pull down on immigrants who are typically not even in the same locations.
Also, your snide comments about academia after all your self satisfied comments about being a computer consultant are funny, but not in the way you mean.
May 31, 2007 4:21 PM | Reply | Permalink
Also, your snide comments about academia after all your self satisfied comments about being a computer consultant are funny, but not in the way you mean.
I know this response is off topic, but I don't consider my comments about education to be snide.
When I was very young, my father got our family an Apple IIe, and 25 years later, both my brother and I do computer consulting. I think that he does linguistic processing and I do lower level stuff and statistics.
I really thought that my brother would do something bolder, since he got a phd at Yale, but the money he gets is satisfying and he likes Californian wines.
After talking with howard, I realized that my family's home computer was more interesting than anything I did at school, period, because I didn't like structure. And, after 6+ years of college, I still do computer stuff.
My father also had a four acre farm, so we kept busy-- as I said.
I don't consider my remarks snide because I really did die when I went to school because, afterall, how could it compete with what I had at home? Rote learning drove me crazy and, as an asthmatic, you can imagine how much I liked gym class. My gym teacher even threw me against the wall one day-- perhaps because he thought that his tough love would make me more excited about tackle football. After I threatened to sue him, he became my best friend.
As you may know, I was a student teacher-- in an inner city highschool, and thought that the students were trapped like animals and, randomally-- twice a day, were the subjects of hall sweeps. How dehumanizing. There was also no trust: the students couldn't have cellphones.
My problem is: "I think that kids are more clever, and a lot braver, than the system permits them to be." I still shiver when I think about how the students seemed to be institutionalized!
But then, I had the freedom of living on a farm and living on the bleeding edge with an Apple IIe at home!
My father could do everything and he was a great role model: he farmed; he played music; he taught; he programmed; he did math; he joined the coastguard; he made wine; he was a woodworker; he made maple syrup; he was a beekeeper; etc...
one of his favorite words was "deadhead," those types of people who did nothing and wanted to do nothing.
By the end of my student teaching, my supervising teacher knew that I was independent-- and didn't give extra attention to soft skills, but I did want each kid to have a personal relationship with the work they did because that was liberty to me.
Here in Minneapolis, there are better programs than welfare for alcohol and drug users; A lot of guys and gals get out of jail and can't get a job-- because of their record, and non-profits hire them and they do all sorts of things like "local product assembly."
I truly believe that the only thing between dispair and dignity is imagination. I never forget:
Si se puede!
Si se peude!
Si se peude!
or MLK's remark that "I've seen the mountain top."
To me, the snide people are those who don't believe that, with love, everything is possible!
if you love something, set it free-- don't feel sorry for it or try to carry it on your shoulders.
the imagination of a child is like a butterfly, let it flap and people will notice.
To boldly go...
June 1, 2007 12:38 AM | Reply | Permalink