Monday, October 18, 2010

repeat after me (or, ch. 2 [sketch])

Chapter 1 is meant to be an introduction to the style and logic of the rest of the text. As you can see from my short exercise, I am really interested in demonstrating the irrelevance of bourgeois economics for understanding questions of what I see to be of greater importance to society.

Of course, part of this project is purely a matter of choosing to analyze some variables at the expense of others. For example, focusing on why the poor are poor, or placing another variable into a production function, are choices that purely reflect my political bias. I completely acknowledge that. However, unlike mainstream texts, I am not going to present my proposed weights as principles, absolute and without a history. In other words, an emphasis on bourgeois economics' larger place in social science, as well as a recognition the institutional and historical contingency of its concepts, is a very important part of the project.

The point of the post was to integrate each of Mankiw's 10 principles into a discussion of those same principles' inconsistency, irrelevance, and class bias. Taken as a whole, it addresses problems of logic and methodology which will be expounded upon in later chapters. At times, it is tongue-in-cheek -- I don't really think unemployment benefits are detrimental to unemployment, but that is the view you adopt when you follow the principles.

In other words, it sets the theme for the rest of the project.

In Chapter 2 of Principles of Economics (4e), Mankiw addresses the question of why economists disagree. Three reasons are given: "Differences in Scientific Judgments"; "Differences in Values"; "Perception versus Reality" (pp. 32-33). (The last reason has to do with how economists mostly agree on the benefits of policy-relevant issues such as rent-control and free trade while the majority of voters ignorantly allow such blemishes on society to persist.) Here's what Herbert Gintis had to say about why economists disagree:
Thus the problem of the economist's role in social affairs is resolved. With the
understanding that our ultimate service is to a social movement grounded in everyday work and community life, the radical economist is nonplussed by his or her separation from the dominant sources of power. Radical theory exists today in America only because of the depth of the contradictions of capitalist society, and will wither and disappear if and when the ruling elites succeed in temporarily attenuating and/or suppressing these contradictions. We hold our jobs and disseminate our thought only insofar as we are part of a movement.

Dialectical analysis must also be used to explain why increasing numbers of economists are willing to assume the status of outlaw (a rather mild type of outlaw compared to the George Jacksons, Angela Davis's, and Vietcong fighters, but outlaw just the same). In essence, we are subject to the same dialectical laws which produce black rebellion, wildcat strikes at General Motors, as well as counter-culture and radical student movements. We must be outlaws to preserve our sanity and to seek a decent world for our children. We must be outlaws because, along with other workers, the rationality of our expertise is otherwise divorced from us and perverted toward ends incompatible with our personal self-realization in our work. But we will not be outlaws forever. Join us. ("Consumer Behavior and the Concept of Sovereignty," AER 62: 1/2, 1972, pp. 267-278)
In other words, there are economists out there that see disagreements as essentially political -- not one of disjoint values, but rather of profound importance to our view of human society. Economists can and do often disagree because of fundamentally different political conceptions and goals for society.

Furthermore, and what is perhaps most surprising, is that this is something that Mankiw would totally agree with with -- I never told you the title of chapter 2. It's "Thinking Like an Economist," and like the popular book (and now movie) Freakonomics which drives a similar message, the whole point of Mankiw's principles text is to get you thinking in the world view of markets.

So, what's wrong with a little awareness of the important reasons why economists disagree?

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