At the Volokh Conspiracy, Kenneth Anderson writes of the impact a book such as Mankiw's must have to garner such heated opposition. This is our whole point. Of course in doing this, we acknowledge the impact of Mankiw's book. No one would argue the strong impact this book has had -- even on myself as a Principles student in high school!
A bit further down, I explain what I mean by "bourgeois ideology", but for now -- one line of Anderson's made me worry, and it must be addressed by any who wishes to write a coherent critique, at the introductory level, of bourgeois economics. Consider this a precautionary tale. He reminisces:
I rummaged around on the high bookshelves and, lo, there was an aged paperback copy of Anti-Samuelson, Vol. 2. (No idea where Volume 1 went. Object lesson in why it is time to get rid of the books that no one will ever open again, and save future generations the trouble.) I realize that this makes me seem (i) truly econo-geeky in all the wrong ways, (ii) chomskyesque and intellectual radical-chic, but then I am the product of a passage from left to right, (iii) a middle aged academic bitterly clinging to the truths of the 1970s.
Except that I never actually read it. My problem was, I came very late to economics from philosophy — it was not until law school that I took any economics, so I hadn’t read Samuelson and couldn’t understand three sentences of Anti-Samuelson, either the economics or the radical critique. It just sat on a shelf in my library looking chic and radical, until it started looking aged and bitter.
There are many reasons for a student to quickly become turned off by radical critique. One of the most sad, however, revolves around teachers and professors who assume the student has an adequate background in bourgeois economics in the first place. In other words, a good radical critique must give the student informed and logical arguments that work against the mainstream -- not to simply set up a "straw man" economic theory. I seriously thought Linder's book was pretty good at not setting up a straw man, but perhaps I was wrong. I am, after all, a third year graduate student in economics. At any rate, an Anti-Mankiw must address the readability and (I do believe) cost issue of a textbook.
Over at Ducks and Economics, Eapen Thampy posts a very interesting and sharp comment on my post by his colleague Jack Soltysik. I agree with Jack's prescriptions near the end. However, there is an additional point I would like to point out. It revolves around this "cost-benefit analysis" Jack describes. It relates to my explanation of "bourgeois ideology." Here is the quote:
Today, the correct answer to almost every undergraduate economics exam question either is or depends on the deduction of what maximizes utility with respect to a given set of parameters. And the unspoken assumption (otherwise this is all a bunch of mental masturbation) is that this is somehow “right,” that this condition makes things “better,” without any reconsideration of modern economics’ first principles – precisely the ones Adam Smith dismissed in his day. These answers are “optimal.” They identify “bliss points.” What effect does it have on a generation of minds when the correct answer, exam after exam, semester after semester, is “maximimze utility?”
My comment on this follows -- but it deserves a prelude. Some others commenting on my post around the blogosphere are a bit confused about what precisely I mean by "bourgeois ideology." How can bourgeois ideology have an impact on the mainstream of economics? The best way to think about it is to think about other ways of decision making in our lives, aside from the cost-benefit analysis.
In capitalism, the way to make profits and to succeed in the long run is to compare future revenues to future costs. No matter if you're a Keynesian, Classical, New Keynesian, the fundamental goal in your analysis of a capitalist economy is determined within this framework of comparing costs and benefits. As human behavior becomes more and more market oriented, economists expand the scope of the cost-benefit framework. So, in labor markets, economists frame the problem of the worker as a problem of comparing the disutility of her labor to the compensation (wages) she will receive in work. In finance, the lender compares the risks of a loan to the probability of return. And so on. Gary Becker, for example, has done a lot to expand this scope of economic analysis.
Proponents of a possible Anti-Mankiw are led to believe two related things. First, capitalism is an historically contingent economic system and is therefore not absolute. Second, the cost-benefit framework is the best system within capitalism. Alternative decision making frameworks exist and are alive and well, but they are often at the margins of the mainstream field of economic science. While economic science wishes to encroach upon all areas of human life with this cost-benefit approach, the alternative asserts that we can understand economic problems through other frameworks. The alternative also must work at analyzing the foundation on which capitalism was built -- a strong state, legal system, etc.
In other words, the alternative does not take cost-benefit analysis as a given and instead searches for historical roots of this approach and alternative ways of looking at economic problems.
In the interests of keeping this short, I will stop here for now. (Here is another link on Anti-Mankiw which I will pay attention to in subsequent posts: Memoirs of an Economics Student.) There is much more to be said in terms of examples and thinkers working today, unknowingly, on the Anti-Mankiw. But please consider these arguments, as I clearly was not upfront about all of the intellectual motivations behind my call for an Anti-Mankiw movement, though many have built up over years of economic study.
"Second, the cost-benefit framework is the best system within capitalism. Alternative decision making frameworks exist and are alive and well, but they are often at the margins of the mainstream field of economic science."
ReplyDeleteYou have things very much backwards here. As a (social) science, economics is dealing with existing reality. That means that the purpose is to devise ways to explain that reality. Different social sciences or related humanities disciplines take different approaches to what it means "explain". Historians for example has for the past few decades been really focusing on all sorts of reasons and factors that kind of show that we really can't explain much about history -- it's (very often) all very complicated. Historians themselves agree that while highlighting complexity and burying simplistic but wrong explanations are worthwhile goals, the ability to explain is a bit part of scientific work and therefore explanations do need to emerge, despite the complexity and the "yes, but" it brings.
Returning to economics, for the last few decades economics has decided to focus on clear and provable explanations. The problem with this (that Krugman has written about) is that this means you're starting small: you can't hope to get those kinds of explanations about the whole complex web of real life and society. If you build slowly, you'll accumulate an infrastructure, build on that, etc etc. Most economists believe this is the right way to go, and believe they're building the right kinds of tools for that progress. That, by the way, includes behavioral economics and other non-classical tools and approaches. The "trivial" examples of Coke and pizza point out some of the small victories. Krugman (again) and DeLong and others have written over the years in their blogs about other things that (according to them) economics has managed to explain to the satisfaction of many experts and in line with observed reality. All these speak in favor of the broad framework Mankiw (and others) are presenting to undergraduates.
**Other "decision making frameworks" may indeed exist (I have no clue what it means that they "are alive and well") but don't seem to have in aggregate enough/similar explanatory or predictive power of **existing societies**. So, if your project is really about changing societal structures, it's not about science at all, economics or other. It may be a worthwhile goal, but it's not a scientific/academic one. If you think other approaches have better explanatory power over the range of issues that an undergraduate needs to be exposed to, this probably requires proof, ie it is a research goal first, I think, and then an educational one.
I think (but I could be wrong) that your project would both be best served, and *it* would be most useful if it recognized the real progress (mainstream) economics has made in trying to explain things in the last 50 years, and trying to address big potential sore points in economics education (in the US -- in other countries, such as mine, we often have the opposite problem).
Now, I think there are at least four potentially sore points with a textbook such as Prof. Mankiw's, with mainstream economics education in general and with economics even more generally:
ReplyDeletea) It will take a long time before we can hope to have comprehensive and more robust explanations of the interactions between economic agents. Given the importance of economic policy in the lives of billions, this is pretty frustrating.
b) It is true that many economists (Mankiw included) seem convinced that the existing tools will carry us "all the way", in spite of persistent evidence that along the way new tools are required. The Nobel prizes for behavioral economics for example, and the existence of (I think) enough experiments showing what would be deemed non-rational behavior in a variety of circumstances, should have made clear that the tools made available by Samuelson for instance were not able to explain all economic interactions in their real-life messiness. But many economists (and textbooks) give short shrift to that reality and paint a "rosier" and in that sense ideologically charged image. Gary Becker is indeed a terrific example of this -- it is unclear how much his research success has informed his often extreme political and social views, but he often claims they follow naturally from his economics expertise, so... good thing the leading textbook isn't his!
c) Alternative viewpoints are not being presented to undergraduate non-majors
d) Even within the mainstream context, important issues such as issues of distribution, issues of institutions, and a host of other important issues, where research has shown that the answer isn't "Markets Hurray!", are very often downplayed. (Krugman likes to point out how his textbook deals with them better or more or whatever)
Could a project such as yours focus on those?
- I don't think much can be done about a. Seriously. The lives of millions (and finally billions) would have been much better with vaccinations and an understanding of how infections work in the 1200s, or around the time of the Black Plague. But we didn't have it, and this couldn't be "forced". Same thing here, I'm afraid.
- An effort such as yours could do much for b and d.
- I think I kind of covered b earlier.
--
Finally, it is actually inaccurate to say (as you seem to imply) that mainstream economics are only good to describe capitalist economies. The methods and principles of mainstream economics have actually been very successful in explaining the successes and failures of planned economies, from the USSR to China.
Even more finally, using the term "bourgeois ideology" is of unclear usefulness. I would say it's decidedly counterproductive if you want to have lots of people contributing and lots of people influenced by the result. Not to mention that after reading the post carefully, I still didn't understand what exactly you mean by it.
Steve Keen has written Debunking Economics. Here's a list of some textbooks, including that, of interest for economics: http://robertvienneau.blogspot.com/2006/08/textbooks-for-teaching-non.html. There is a "toxic textbooks" movement: http://www.toxictextbooks.com/. Most of what mainstream economists teach has been shown incorrect decades ago.
ReplyDeleteVasilis,
ReplyDeleteThank you for your extensive comments. I could write an entire new post about your suggestions, but for right now I will limit myself to an observation on your classification of the social sciences. By the way, an excellent book to check out on how the social sciences have evolved is Dorothy Ross, /Origins of American Social Science/
Yes, economics deals with existing reality. But reality is far from objective. There are many ways of viewing any one event. Part of the weakness of modern economic theory, I would argue, is in its taking the current system as a /given/ and not trying to understand the system's historical roots. One of the central theses influencing my work can be found on the right hand sidebar of this blog -- check out the Tocqueville quote and let's debate that.
Take an example. Say the prescription implied by a theory of growth is to have secure property rights. We look to various economies today and see that the developed ones have resilient institutions like these -- so it must be so, and we explain the usefulness of private property rights in fostering incentives. These economies are successful today because they have secure property rights. We construct a theory, an entire institutional edifice, based on the idea that secure property rights are the most efficient institution in capitalism.
Proponents of a possible Anti-Mankiw would note that many developed countries today were not successful based on secure private property rights. Naomi Lamoreaux has written a really nice article about this. Other prominent scholars have, too -- such as Harvard legal historian Morton J. Horwitz in his work on the transformation of early American legal jurisprudence.
This is just one example of where the entire notion of efficient instituions as a central theoretical framework of an economy breaks down. It is one goal of our critique to note how these have been historically important, AND what they can tell us about modern day theories of capitalist development.
Robert,
ReplyDeleteThanks very much for the links! While I indeed agree that it's easy to form bits and pieces of a critique from research in and outside of the profession in the last few decades, the goal of our project would be to provide a "big picture" critique, and possibly to use these research findings as examples.
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ReplyDeleteWhile risking becoming a bother, I would also submit that this
ReplyDelete"In other words, the alternative does not take cost-benefit analysis as a given and instead searches for historical roots of this approach and alternative ways of looking at economic problems."
makes me wonder about the goal of the project. The above is a terrific goal for a researcher, or even a conscientious citizen in general. It is not clear to me it is helpful in the context of the course Mankiw's text is used in, assuming we agree that at least in part such courses have a utilitarian function.
Daniel
ReplyDeleteas you articulate it now, I am curious in what way you think the project would have any impact on the thousands of undergraduates learning from Mankiw's (or a similar) textbook. Specifically, you write an example:
"Proponents of a possible Anti-Mankiw would
note that many developed countries today were not successful based on secure private property rights. Naomi Lamoreaux has written a really nice article about this. Other prominent scholars have, too -- such as Harvard legal historian Morton J. Horwitz in his work on the transformation of early American legal jurisprudence."
What does this have to do with the level of detail one would reasonably expect to present to an undergraduate non-major in a 1 semester survey course? If the idea of the project is to simply sow doubt about the teachings of the canonical textbook, then it might succeed in that. I think a more powerful goal would be to actually expose them to explanations about important issues that even a mainstream would have to concede are convincing and appropriate (or would resort to evasions etc etc).
Of course, as I wrote before, if the goal is to create the intellectual conditions where young people would be willing to consider different (radically different) institutional arrangements, then the turn the critique takes is different.
"This is just one example of where the entire notion of efficient instituions as a central theoretical framework of an economy breaks down. It is one goal of our critique to note how these have been historically important, AND what they can tell us about modern day theories of capitalist development."
I would suggest kindly again that arguing that mainstream economics are only able to describe capitalist economies is a pretty weak argument....
Finally, I'm not an expert, but I don't think the impact of Lamoreux's work on the edifice of mainstream economics is that strong....
Vasilis
PS I am wondering: would the critique also be an anti-Krugman? His is the second or third-selling textbook, no small feat. If the critiques apply to both textbooks, then two birds with one stone -- and a more widely ranging critique of mainstream economics principles-as-indoctrination.