Good essay: based on my experience with academic economics and real life I tend to think that your analysis is correct, but also that the shell is very thick and there is little hope of cracking it. Traditional economics also serves the purpose of comforting the comfortable and afflicting the afflicted, so it has a built-in constituency with money.

Have any of the more reality-based traditional economists, such as Brad DeLong, respond to your book yet?

sPh

It took in the database because I can see it. Thanks.

sPh

After reading the article in The Nation, I posted the following comment;

As something of a dualist, I recognize there tend to be two sides to every coin, but that only one can be seen at a time. In mediating between the individual and the group it should be remembered that the absolute is the essense out of which we rise, not a model of perfection from which we fell. That said, I think there is a basic fact about the nature of money that economics hasn't taken into account.
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.

I started reading your article this morning but had to set it aside to finish later after the Card antecdote.  I had to take some time to think about the implications.  I wondered how can economists expect to be viewed as scientists if they shy away from an hypothesis when the results of testing it don't turn out as expected?  Wouldn't retesting it be the more scientific thing to do? 

I won't even try to comment on what your antecdote about the two economic departments at Notre Dame made me think.  I would probably just end up ranting.

I have greatly enjoyed reading "Hip Heterodoxy" and all of the responses to it, including by Thomas Palley who (hi Tom) I much enjoyed arguing with during a small workshop on oil wealth a couple of years ago. I found myself wondering if I was the only one reading who felt the looming presence of Thomas Kuhn.  His Structure of Scientific Revolutions, now 45 years old, remains the single best account of how paradigms like the neoclassical one in economics survive long past the point at which the accumulated discrepancies between them and the current body of evidence force a paradigm shift or at least a pluralization of paradigms within a science.  Survival of the neoclassical paradigm is in part explainable socially: economists vested in it, and professionally dependent on it, keep the gates closed to what they call the "heterodox" longer than scientific reason would justify, and generally do what they can to maintain the primacy of their preferred paradigm. Whether there exists a mafia, as Tyler Cowen doubts, or not is irrelevant; all we need are enough insecure, threatened-feeling scholars. The causal mechanism, for example, in Kuhn's analysis is the professor him/herself, adeptly theorized in Patricia Limerick's spot-on article in the Chronical of Higher Education, "Dancing with Professors: The Trouble with Academic Prose," available here:http://www.soc.umn.edu/~samaha/cases/limerick_dancing_with_professors.html

 Inhabiting as I do another science--political science, which I'll say to the skeptics is no less or more scientific than economics, biology, or seismology--and one that has looked envyingly at economics and tried to ape its dominant paradigm, the critiques of the neoclassical worldview hit home even harder in political explanation than they do in economic explanation. Milton Friedman famously wrote decades ago that whether the assumptions underlying microeonomics were reasonable was irrelevant: what mattered was the accuracy of predictions. A scientific paradigm based on this premise is problematic at many levels, especially if it is aspirations to prescribe policy, but here are just two.

First, for any who care about explaining phenomena rather than just predicting them, this philosophy of science and its offspring (like neoclassical economics) are hopelessly useless. Lacking any commitment to finding the right links between cause and effect (causal mechanisms), we are left with black box economic and social processes that neoclassical economists really don't care about, and I find this to be a sloppy way of thinking about the world. Jeffrey Sachs, for example, has completed path-breaking research on the links between geography and underdevelopment, finding that we can account for a good deal of the variation in current levels of development by reference to the difficulty in conquering malaria in the tropics, to the lack of access to ports in many sub-Saharan African countries, and to the long distance to sizeable markets. That is a causal explanation with clear links between the outcome of interest and the causes at work, and it essentially violates the tenets of neoclassical economics by eschewing simplifying assumptions up front and simply looking for the right answers.

Second, thinking about social phenomena (of which market ones are a subset) in a neoclassical way often leads scholars to tautology. Say I walk around all day wearing a hat made of foil and looking fearfully up at the sky.  The neoclassical explanation might go like this: given that I am a rational utility maximizer, I must be up to rational utility maximization. If I am afraid of aliens lurking in the clouds who want to suck out my brain, but am convinced that wearing a foil hat will foil them, then it is rational for me to continue wearing said hat. This tilts toward the absurd end of rationalist theorizing, but it points to an unfortunate reality cloaked in scientific garb: that one can generate seemingly confirmative results by constructing logically dubious theoretical models based on rationalist assumptions. My foil hat-wearing loonie is clearly not rational, but I've just made him so by explaning his behavior using the right language. I have made rationality banal: because all behavior is rational, rationality no longer explains anything. All the window dressing thrown up to push these paradigm-challenging problems aside--information asymmetry (and who in neoclassical circles chases down the question of who creates those asymmetries to maintain their own market power?), externalities, and the like mostly serve to create the sense that real problems with the paradigm are marginalia that can be safely ignored.

Something of a sidenote: but Limerick's article is definitely worth a read.  It also conjures up the image of what professors were like in junior high, which is just . . . great.