From the New York TIMES op-ed, April 23, 2000, by Paul Krugman: >... this
is a good occasion to talk about political bias in economic analysis. It is
a real issue. But the corruption is more subtle -- and also more evenly
spread across the political spectrum -- than my hate mailers seem to realize. <
Before I get started, I should mention that PK, following the lead of most
other pundits, is engaged in recycling: much of what follows in his column
appears in his books.
>First of all, academic research in economics is by and large carried out
without strong political bias. I'm not saying that what you read in the
journals is always right (don't get me started), or that the researchers
themselves are noble characters: successful economists, like successful
academics in any field, are usually ambitious men and women with large
egos. But the structure of rewards in a field in which top departments are
constantly jostling for prestige favors cleverness and originality, not
political correctness of any stripe. <
PK doesn't inquire into the meaning of the words "cleverness and
originality," since to those at the top of the economics
profession's pecking order such as himself, the meaning is self-evident.
The way in which the economics profession is set up, "cleverness and
originality" are defined in purely formal terms, in using fancy mathematics
or statistical techniques. I have no argument about fancy statistics or
econometrics, but the profession's systematic privileging of fancy
mathematics has a subtle political effect.
Mathematics, by its very nature, simplifies and idealizes the real world,
ironing out the heterogeneity of different cases. An excessive emphasis on
math creates a bias against common-sense and empirical knowledge, i.e., all
of Howard Gardner's 8 (or 9) varieties of intelligence except analytical
intelligence (the stuff tested by old-fashioned IQ tests). Hegel is often
quoted as saying "the real is rational, the rational is real." The orthodox
school would agree: if it's not "rational" (describable in a mathematical
form), it's not real. But even though they share his philosophical
idealism, they typically lack Hegel's dynamic vision.
Because of the privileging of formal rather than empirical knowledge
(deductive rather than inductive reasoning), economists have done some very
weird things. Since WW 2, they have almost worshipped the utterly utopian
Walrasian general equilibrium model. Nowadays, there are large numbers of
economists who want to impose this model on the world, not seeing
non-market institutions such as communities as really being "real."
Starting in the 1970s, this model has invaded macroeconomics (my main
field), so that at one point, the irrational theory of "rational
expectations" (i.e., that people's guesses about the uncertain future are
correct on average) was taken seriously. Often combined with this was the
assumption that markets "clear" instantaneously (so that the quantity
demanded always equals the quantity supplied in all markets at all times).
This stuff is nice mathematically, but as realistic as Plato's REPUBLIC.
Most macroeconomists have rejected this stuff, but the fact that it was
actually popular for awhile suggests a severe problem with the field. It
reflects a larger problem of economics.
Someday, I hope, that economists will realize that mathematics is only a
tool among several tools. One good sign is the existence of the journal
JOURNAL OF ECONOMIC PERSPECTIVES, which is largely non-formalistic and
encourages economists with different perspectives to communicate with each
other. But I think it will be a cold day in hell before economists will be
rewarded for publishing in more popular journals like CHALLENGE. (Even
those who publish in the JEP have to prove themselves to be elite enough by
publishing in formalistic journals such as the AMERICAN ECONOMICS REVIEW.)
It will be even colder when people are rewarded despite their having
non-orthodox politic perspectives. (The alternative is that they hide
their politics: I know of several economists who hid their leftist politics
the way that Jews in the age of the Inquisition hid their faith -- until
they got tenure.)
Actually, it won't be colder. It will be hotter. During the heat of the
1960s and early 1970s, when millions were marching in the streets against
the Vietnam war, sexism, ecological destruction, and similar abuses, the
political perspective of the economics profession shifted to the left. Of
course, as the Reagan era set in, the political perspective of the vast
majority of US economists followed the general trend in society, moving
toward the right and/or cynicism. Of course, PK ignores the societal
influence on the economics profession, since at least his people are above
politics.
>While hired guns do not flourish at Harvard or the University of Chicago,
however, in Washington they roam in packs. <
PK doesn't mention the political biases of those who are not "hacks." Most
of those from the U. of Chicago, of course, are almost religious in their
advocacy of _laissez-faire_, combined with a personal style encouraged by
the social-Darwinist culture in the graduate school. Those from Harvard are
more "liberal," i.e., they are typically paternalistic technocrats who know
more than the unwashed masses and fear "politics," including popular
participation in the decisions being made (except in the most attenuated
way, the tame democracy favored by the US State Department).
Institutions such as the World Bank or the IMF combine both of these
political biases, using Structural Adjustment Programs to pushing free
markets uber alles because "it's good for people in the long run."
(Economic theory says that movement to the free market may impose big
transition costs on people, but these economists usually think in terms of
what's called "hypothetical compensation": if, in theory, there is enough
of a rise in efficiency to pay for the pain and suffering of the program,
then it's a good idea. But somehow the lonely hour of the compensation
never comes. Some hairy old German guy once called a similar process
"primitive accumulation.") If there's to be any deviation from free-market
strictures, it is to be decided by the knowing mandarins who have gotten
the Good Economics Seal of Approval.
>Portrait of a hired gun: He or she is usually a mediocre economist --
someone whose work, if it didn't have an ideological edge, might have been
published but wouldn't have had many readers. <
Who or what defines a "mediocre economist"? It's not self-evident, since
calling someone "mediocre" can itself be a tool of ideological conflict.
It's the academic pecking-order that defines "mediocrity," of course,
following the formalistic standards sketched above. The "Big Name"
economist at the self-selected "Big Name" schools determine who or who is
not "mediocre." To me, this whole pecking order stuff is nonsense. Economic
knowledge and understanding is a collective product, which involves large
numbers of "mediocre" economists along with the self-selected elite. In
fact, some excellent research has been done by folks at small teaching
colleges, even though they lack the foundation financing. (Gee, Paul, I
wonder if foundation financing biases economic research?) Of course, as
usual, "excellent research" is in the eye of the beholder. More
importantly, there is not a single excellence vs. mediocrity scale. There
are several. Some do good empirical research; others are good at producing
mathematical models; yet others combine these; some do good historical
economics; while others produce cleverly-written columns in
establishmentarian newspapers.
BTW, I think that there is indeed a large amount of mediocre economic
academic writing out there. The incentive system that dominates economics
encourages such over-production. One of the problems is that many people
are pushed to publish even though they're not interested in publishing
(since that's what's rewarded). Then the kind of publication that's
rewarded tends to be formal and thus narrow, adding a bell or whistle to
some existing economic model without adding any real content. My impression
is that most of these articles are never read except by the the authors
themselves and the editors of the journals that publish them.
There is also another kind of mediocrity: those who toe the free-market
party line, except (perhaps) within their own fields of specialization.
They don't think about the theoretical framework they embrace, especially
when pushing it on to students.
>He [sic] has, however, found a receptive audience for work that does have
an ideological edge. In particular, he has learned that pretty good jobs in
think tanks, or on the staffs of magazines with a distinct political
agenda, are available for people who know enough economics to produce
plausible-sounding arguments on behalf of the party line. Ask him whether
he is a political hack and he will deny it; he probably does not admit it
to himself. But somehow everything he says or writes serves the interests
of his backers.<
But we shouldn't deny the existence of a bunch of "hacks" out there, this
ignores the subtle kind of political bias discussed above. This perspective
fits with the liberal vision that is so dominant in US society: there are
those who favor the public interest and scientific Truth -- and there are
those who back "special interests." Of course, this whole formulation
ignores the institutional bias that frames the whole public vs. individual
discussion, including the way in which different classes, ethnic groups,
and sexes produce different and sometimes conflicting visions of the
"public interest." It assumes that the academic elite knows what's best for
the public interest, but that vision is of course biased by their elite
status and their formalistic methodology.
It's interesting to note the parallel between Krugman's description of the
political hacks and Joseph Stiglitz's descriptions of the mediocre
economists who run the IMF. Could it be that the IMF represents a special
interest?
To my mind, the only way one can actually figure out the nature of the
"public interest" is to ask the public, to institute as much democracy as
possible. But to the typical economist, democracy is inferior to the market
or to technocratic decision-making (or to the combination we see at the
World Bank and the IMF).
(Ask Krugman if he is a technocratic Mandarin. He will deny it; he
probably does not admit it to himself. But somehow everything he says or
writes fits with that ideology.)
>Most of these hired guns work on behalf of right-wing causes: it's a
funny thing, but organizations that promote the interests of rich people
seem to be better financed than those that don't. Still, the left has
enough resources to front a quorum of its own hacks. And anyway, love of
money is only the root of some evil. Love of the limelight, love of the
feeling of being part of a Movement, even love of the idea of oneself as a
bold rebel against the Evil Empire can be equally corrupting of one's
intellectual integrity. <
This is standard Krugmanism: if you can't criticize the content of your
leftist opponents, attack their motives. Further, notice that he never
names any names in this column. Rather than deal with the specifics of any
specific economists' evil hackness, he simply lords the Orthodoxy over a
large number of un-named hacks. After all, if he actually names an
economist, he'd have to start listing particulars. Then he'd have to be
fair or else the named economist could easily point out the flaws in his
argument.
>How can you tell the hacks from the serious analysts? One answer is to do
a little homework. Hack jobs often involve surprisingly raw, transparent
misrepresentations of fact: in these days of search engines and online
databases you don't need a staff of research assistants to catch 'em with
their hands in the cookie jar. But there is another telltale clue: if a
person, or especially an organization, always sings the same tune, watch out. <
I haven't noticed Krugman himself doing much in the way of empirical
research -- except to attack those who differ from his theoretical and
political perspective. His main focus is on creating "clever and original"
abstract models, many of which are indeed clever and original (even though
he's repudiated some of them). He's not an empirical economist.
>Real experts, you see, tend to have views that are not entirely
one-sided. For example, Columbia's Jagdish Bhagwati ... [has a] mixed
stance [which] reflects an honest mind at work. You might think that hacks
would at least try to simulate an open mind -- that simply for the sake of
appearances the Heritage Foundation would try to find some tax it supports,
or the Economic Policy Institute find some trade liberalization it favors.
But it almost never happens. <
Here PK finally gets into specifics. But last time I checked, the EPI
wasn't totally against the blessed process of free liberalization. But this
gets PK into dangerous territory, that of empirical research. I'll let the
EPI defend itself, though.
You'll notice that PK follows the standard practice of the punditocracy of
showing equal disdain for the powerful of the right and the less-powerful
of the left, so as to prove his status as being above all those guys,
politically neutral and worthy of the NY TIMES (which of course has no
political bias and defines the "middle").
>Of course, honest men [sic] can disagree, and they can also make
mistakes. But it's still a good idea to tune out supposed experts whose
minds are made up in advance...<
Who could disagree with this sentiment? but the point is that _all_
thinkers, no matter how elite their credentials, no matter how
"disinterested" their pretensions, should be treated critically. In fact,
we should be especially alert to the way in which elite credentials, formal
methodology, or endorsements of the "public interest" are used to hide a
subtle political bias.
Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~jdevine
