methodological revolution as political revolution -- reflections on the future of heterodoxy

At certain times over its 1.5 year history, this blog has been used as a platform for my personal reflections on the state of heterodox economics, either in the very specific case of my own institution or in much more general considerations. Of course, as a leading institution of heterodox thought it is hard to disentangle UMass from larger issues of the past, present and future of radical economics. Today sees another one of these reflections, though I do believe it is one with much more meaning and potentially much more relevance to the future of leftist economics.

You see, while I have thus far focussed on historical issues in searching for a hint of light for the future contained in the past, I am both happy and disheartened to say that this post concerns itself almost explicitly with the future: an "experiment" if you will, in radical economics.

The case has to be made for or against a kind of "radical Freakonomics", an empirical program motivated largely by political frameworks which aim to answer big questions whilst supported by a set of sophisticated statistical techniques. The first main issue is the place of data in economics -- how it has been used and what has its impact been.

The story of data in economics as a social science, and in particular the academic impact of new datasets to enlighten and enrich theories, is of course a very old one. Marx himself found that the story of industrial capitalism needed to be told through the perspective of the disadvantaged classes, searching "underground" and developing his theory of alienation and exploitation based on what he saw to be a serious disconnection between the current "bourgeois economics" of the day and what actually happened in capitalism. Moving to other areas of economics and social science, the examples multiply: what John R. Commons' Documentary History of the U.S. did for institutionalism, or what Richard Morris' Government and Labor in Early America, collecting all those old colonial court records, did for legal history. Revolutionized history and became (and still is!) one of the definitive works on early American legal history -- written in the 1950s!

More recent accounts, however, is where I want to focus my attention:they include Fogel and Engerman's Time on the Cross. Published in the early 70s, the cliometric revolution called for in that book sought to rewrite American history on the back of regressions and other statistical output, starting with the new economic view of slavery.

Like Freakonomics, Time on the Cross had a shock factor to it, and like Freakonomics, it was based on the idea that clever econometricians could overturn a century of historiography on slavery. Coupled with a rising body of theoretical literature by Douglass North and others on the efficiency of institutional change, these libertarian-oriented, empirically-minded economists seriously sought to rewrite American economic history. Unfortunately, while there are still quite a good number of followers in this field, my assessment is that at this point, around 30 years later, economic historians are moving on to other crucial questions, are reaching out to other methodologies, and talking more to people in other disciplines in a more substantive way than simply, "Got any good data?". In short, the field is fragmented right now with no clear direction, especially as North's brand of institutional economics has been formalized and improved upon greatly by scholars such as Daron Acemoglu. It is still possible to take a strongly ideological (and simple) view, but in light of all the theoretical nuances which have been developed as well as a greater respect to cross disciplinary boundaries, the attempts at doing so largely fail.

And so the looming question is whether a radical Freakonomics is really going to make an impact on the trajectory of heterodox thought...

...Or, may I add, on economics at all.

Fogel and North both got a Nobel prize, don't get me wrong. But that's because they ushered in a methodological revolution. By asserting their econometric techniques over the "implicit models" of the historiography, they were radicals in their field. But work which simply strikes at some leftist sympathies is quite different. This type of work has a political "shock power" but without an accompanying methodological revolution (which is, of course, itself a political revolution -- just think for a minute about what Fogel and Engerman were able to accomplish in terms of getting people to think differently about social phenomena) it has a very low discount rate.

This is not the kind of work that changes the trajectory of radical economics -- this is the kind of work that makes it to the front page of the Times, becoming old news in time as the right wing figures out a new way for people to think about incentives.

I will have more to say about this in the very near future, but I just needed to get these thoughts out as I begin to organize my own views about what the future holds for heterodoxy.

engaged with the mainstream but not engaged to it: notes on heterodoxy

I'm going to write briefly about what I see to be a clear division in the state of radical economics, heterodox economics, and the history of these traditions at UMass. The division boils down to something I've observed in the teaching and particular attitude of economists here: either a clear disengagement or engagement with the mainstream approach, depending on your age (roughly greater than or less than 40).

Here's the story: I've noticed that younger economists at radical left departments are overwhelmingly obsessed with the frontiers of research in their field -- whether it's international or labor or whatever. The goal of these economists is to familiarize themselves with the latest research trends ("fashions" is what it boils down to) and produce research according to these trends, asking leftist types of questions along the way.

While it is easy to admit that being successful in academia nowadays requires one to be well-informed of the latest trends and to conform to them whenever possible (essentially, speaking the language of mainstream methodology), a quick look at the tradition of radical economics in academia -- notably the establishment of a radical economics program at UMass in 1973-1974 -- shows how very different the behavior of these young economists is. This, in turn, leads to a more nuanced view of professionalism and careerism for leftist academic economists today. In short, the radical tradition in the 1960s and 1970s was built on really smart people posing really strong oppositional frameworks to the standard view in the mainstream.

Examples include some of the classic papers of the first group of radical economists at Umass: Steve Resnick's 1975 paper on development, or Herb Gintis' 1972 AER paper on the nature of the Outlaw. Whether integrating dialectics into a study of academics and social movements (as with Gintis) or posing a new understanding of development as a relationship between capitalist and non-capitalist economies (one of Resnick's themes), it is clear that these economists were disengaging with the mainstream in order to offer a completely different view of concepts and phenomena which neoclassical economists also try (to this day) to explain. In other words, as I've written in other areas on this blog, mainstream and radical econ can be looking at the same time period, indeed the same issue, and come to two completely different explanations of it.

The result of this strategy, for better or worse, was a set of academics who sought to change the profession's understanding of certain concepts and phenomena fundamentally by posing a new view of them. The younger crowd, being obsessed with research frontiers, is asking very interesting questions, but they are obsessed with the mainstream's recognition and incorporation of these younger economists' ideas into the broad framework. The emphasis is less on imagining a drastically different world view, and more on altering the existing world view to take new questions and variables into account.

Are there young economists out there working in the older tradition? Of course, but the trend is certainly in the opposite direction. What does it all mean? Well, I will leave this short comment with a provocative question: Who got the jobs with automatic tenure at a solid research institution?

Comments and blog responses are very much appreciated!

the best artistic manifestation on the financial crisis

Check it out here:

http://aniatiania.blogspot.com/2010/09/on-financial-regulation.html

Also recommended (beatbox by yours truly):

http://www.youtube.com/watch?v=Js5BYCJqI8A

playing in bourgeois ideology's sandbox -- pedagogical reflections

Fellow UMass Econ blogger Mark Silverman discusses the important features of capitalism in this post. His premise is a capitalist propaganda video from 1948.

If you watch the video, you'll see that it consists of a (mock) portrait of a terribly earnest and engaged discussion among high school students about the definition of "capitalism." They use, as an example, a visit to Mr. Brown's grocery store to buy "weenies" for the class weenie roast. After arguing vigorously (and letting us see their visit to his store) they come up with the following list of defining features of "capitalism":
(1) Private Property
(2) Profit motive
(3) Competition
(4) Freedom of contract
(5) Government-enacted laws granting rights (including certain Constitutional rights) to items #1 and #4

And, they conclude, that (1)-(5) adds up to (6) "Free Enterprise" (which, of course, is a much more attractive sounding term than "capitalism.") (Incidentally, #5 is a rather sophisticated observation-- at least relative to what most economists generally discuss. Certainly they failed to recall it when administering so-called "shock therapy" to the former Soviet Union.)

After playing this video in my class, I listed these features on the blackboard. I asked my students: Is there anything else you'd add? Or does this seem like an extensive, and exhaustive, list?

I confine my comments to Mark's use of this video in teaching his history of thought class.

I have purposely never addressed the issue of defining capitalism in my teaching. You may think that's odd given that I've taught a course in American economic history, but in that course I found it much more helpful to instead pose different accounts of the rise or success of capitalism and then debate the rigor of the various arguments. In this way, for example, we were able to poke holes in both leftist accounts of proletarianization, as well as rightist accounts of the rise of a liberal democratic society in the U.S. by the early 1800s.

Basically, in the quote above I think Mark goes too far in assuming some of the traits presented in the video as given. Competition, for example, is not a cornerstone of all "free enterprise systems," as Schumpeter pointed out and of course many before him (Schumpeter's is the account I am most familiar with in detail). But, whatever -- debating whether capitalist institutions really are efficient is not the point of my argument. I assert that there is a much larger point to be made about assumptions, other than the apparent inconsistency between what ideology says is capitalism, and what it really is. The larger point to be made is in how Mark relates propaganda's discussion of capitalism to how capitalism is defined by others.

We need to consider two related points. First, bourgeois ideology has its own definition of capitalism. Second, many academics (left and right) also have their own definition of capitalism. What does it all mean for teaching what capitalism is? By playing in bourgeois ideology's sandbox, Mark's "lesson on capitalism" implicitly accepts the first point and disregards the second, which compromises the strength of the lesson learned. Surely the students still get the main point that the propaganda is "biased" by not discussing wage labor as a central institution of capitalism -- but biased against what? The simple inclusion of wage labor, alongside the other 5 properties of capitalism or a free enterprise system? Is that the model Mark adopts? Mark does not tell us, but it seems implied that this reference point is precisely the one chosen by him.

I argue that the failure to coherently present an alternative model when attacking the mainstream one is one of the biggest weaknesses of heterodox teaching. I might be going too far in grilling Mark here -- and I hope he calls me out for doing so -- but as teachers, it seems like the best we can do is get out of bourgeois ideology's sandbox and start levelling critiques from the standpoint of the rigor of all definitions and arguments concerning capitalism. Doing so will poke holes in all the arguments, but it will also allow the students to gain familiarity with various perspectives, allowing students to judge for themselves.

This is not a "bias-free" method -- each instructor will nevertheless be more difficult on certain positions that are against his or her political leanings. But I think that recognizing that there are many different definitions of capitalism is an important first step at deconstructing "dominant" paradigms.

One final point. It appears that toward the end of his post, Mark does begin to discuss some of the historical origins of wage labor, and how unnatural it is. He remarks that Polanyi discusses wage labor as an absurd condition of modern society. Is this the alternative model of capitalism Mark has in mind?

modernism and modern politics

(Please note: this post is only meant to be a brief sketch of some ideas -- hopefully we can discuss and develop them further in later posts.)

A recent string of posts from around the blogosphere, including some compelling ones by my fellow UMass colleagues Mark Silverman and James Miehls, have sought to sort out the presence and importance of conservative trends in various contemporary leftist critiques of capitalism. The main question of these posts seems to be, "are there elements of arguments on the political right to be found in various leftist arguments against capitalism, and if so, what should we do about them -- engage and incorporate, or make the rightists play by our own rules?"

I recently found a piece posted originally on 3 Quarks Daily titled "Why Conservatives Should Read Marx," which I think does a good job of focusing on where the debates spurred by Mark and James can and cannot find resolve. How do arguments on the left intersect with some conservative arguments?

First, you need to establish the tradition of markets as well as other institutions. It is well known, for example, that the development of markets is bound in a history of moral and political restraints. Whether the rules of market competition are guided by a preservation of communal norms (as in this paper by Jason Opal) or by religious values, market society is not naturally equated with financial derivatives and international price-cutting strategies. Thakkar makes the point nicely here:

If they want to be consistent, conservatives ought really to be anti-capitalist. This may be a little surprising, but in point of fact conservatism has always been flexible as far as particular policies are concerned. In the U.S. conservatives oppose universal healthcare as an attack on freedom; in the U.K. they defend it as a national tradition. Both positions count as conservative because, as Samuel Huntington argues, conservatism is a “situational” ideology which necessarily varies from place to place and time to time: “The essence of conservatism is the passionate affirmation of the value of existing institutions.”

In other words, modern conservatism is not entirely engaged with the view that markets, everywhere and in any circumstance, are a good thing. However, there is a subset, a newer world view, which we should be engaged with: the neoclassical, neoliberal world view. The real point of leftist resistance to neoclassical economics in particular should be against these economists' aims of applying a specific framework for understanding economic behavior without regard to context -- history, culture, and so on. It is a forward-looking view, a modernism which extends itself blindingly into various political debates, such as the financial system -- without remembering why and how markets were created in the first place.

I really do think it is a kind of sick version of modernism that plagues a subset of the modern rightist and also, to a degree, modern leftist political views on the market. However, I don't really know enough about modernism to make this claim forcefully.

I can only appeal to some of my literary heroes -- Kafka, Eliot -- for their own critiques of modernism. Kafka, of course, rails on bureaucracy are beautifully expressed. And I think there is much for Leftists and conservatives alike to take away from Eliot's depressing commentary on progressivism and the decay of modern society. For an example, I end this post with an excerpt from Eliot's last work, Four Quartets ("East Coker"). Emphasis my own:

.... There is, it seems to us,

At best, only a limited value

In the knowledge derived from experience.

The knowledge imposes a pattern, and falsifies,

For the pattern is new in every moment

And every moment is a new and shocking

Valuation of all we have been. We are only undeceived

Of that which, deceiving, could no longer harm.

In the middle, not only in the middle of the way

But all the way, in a dark wood, in a bramble,

On the edge of a grimpen, where is no secure foothold,

And menaced by monsters, fancy lights,

Risking enchantment. Do not let me hear

Of the wisdom of old men, but rather of their folly,

Their fear of fear and frenzy, their fear of possession,

Of belonging to another, or to others, or to God.

The only wisdom we can hope to acquire

Is the wisdom of humility: humility is endless.

umass econ bloggers

This is certainly exciting news.

With a new entry into the blogosphere, UMass economics now has (to my knowledge) 9 10 independent bloggers writing about various topics. Definitely check these out.

A few of the Chinese students in our department have started up a collectively-run blog on politics and economics (in Chinese!), which you can find here: http://www.puluo.org

Mark Silverman, philosophy and economics: http://cognitivefootprint.blogspot.com/

Tomas Rotta, Marxism for the 21st century (in Portugese!): http://marx21.com/

Anastasia, interests in behavioral economics: http://econmemoirs.blogspot.com/

Amit Basole, Indian political economy and social movements: http://thenoondaysun.blogspot.com/

James Miehls, Marxian theory, post-modernism and baseball: http://marxianreflections.blogspot.com/

Ian Seda, part of Los Expatriados, a group writing on contemporary political economy in Puerto Rico: http://losexpatriadosenglish.blogspot.com/

Josh Mason, Macro and international economics: http://slackwire.blogspot.com/

Joe Rebello, politics, political economy and basketball: http://josephrebello.wordpress.com/

Harry Konstantinidis, Greek basketball and politics, art, political economy: http://aniatiania.blogspot.com/

UPDATE: Thanks to Tomas for reminding me that he also has a blog. If I'm missing anyone else, please leave a comment!