More on the Question of Orthodoxy in Economics

In his recently published The Puzzle of Modern Economics: Science or Ideology? (1), the historian of economics Roger Backhouse discusses the question of orthodoxy and pluralism in the economics profession. (It’s an interesting fact that economists love calling their field a ‘profession’; one rarely hears about ‘the anthropology profession’ or ‘the zoology profession’.) This is interesting not so much because he says anything new on the topic, but precisely because he does not. Backhouse is a very mainstream economist with very mainstream views anno 2011, but to his credit, he differs from many of his colleagues in having an intellectual interest in the activities of economists of other times and approaches. He authored the Penguin History of Economics (2), which although impeccably mainstream in its analysis, is not at all bad as a popularization and shows precisely its strengths mainly where it comes to a willingness to give space and attention to economic thought outside the usual focus on the postwar era. In any case, his dealings with the strange realms of non-neoclassical thought inevitably force him to consider the question of the ideological nature and content of orthodox economic thought today, an issue which apparently troubled his conscientious mind enough to write a whole book on the subject. Sadly, most of the book deals with discussions of what mainstream economics is today, and some debate about really very minor debates within modern orthodox economics, such as around Keynesianism. Backhouse only comes to the meat of the matter in the chapter entitled “Heterodoxy and Dissent”.

In this chapter, Backhouse gives the most commonly heard responses to the charge of ideological narrowness and dogmatism levelled against the orthodoxy in economics. Because these are so much the standard answers, it is worth using the occasion to criticize them. This is not because Backhouse is particularly worse than other orthodox economists, but precisely because he formulated them so concisely in a book purportedly dedicated to this whole issue. Because of this, he is worth quoting at some length:

Heterodox economists frequently make two charges against their orthodox colleagues. The first is that ignoring their work means ignoring insights that are fundamental to understanding economic phenomena. The second is that the economics profession adopts an excessively narrow view of the methods that should be used in economics and that it needs to be more pluralist(…). The response to both these claims is that ‘insights’ about the economy are rarely useful unless economists also have tools with which to apply those insights. (…) Within the mainstream there is great suspicion of methodological claims that are not backed up by results. (…) It means that arguments about pluralism are more persuasive if they arise from examples of how new insights and methods can solve important problems.


Variations on these answers are what every heterodox thinker in economics is inevitably confronted with when challenging orthodox-minded colleagues. In fact, ‘answers’ of this kind are nothing as much as simply a restatement of the existence of an orthodoxy in a particular field of science; they are the hallmark of the existence of an established method among a large proportion of the practitioners in that field, something often – in fashionable imitation of Thomas Kuhn – called a paradigm. But they fail to convince, precisely because of this tautological nature, despite the frequency with which economists have recourse to them to defend the orthodoxy. The reasons can be explained briefly and in a straightforward manner as follows, as concerns economic theory:

1) The charge that the heterodox theories fail to provide insights which can be transformed into tools for application is easily rebutted. Not so much because they do in fact so provide, but because neoclassical orthodoxy, or any economic theory orthodoxy whatever, also fails to do so. Neoclassical economic theory does not exactly stand out by its immediate predictive value, nor by its ability to give practical tools which have an immediate, traceable, and easily controlled effect on the economy or society as a whole. Since economics is a social science, it is doomed (at least for the time being) like all other social sciences to operate in the realm of the inexact and the general. While there are countless models for economic purposes, from monetary policy analysis by central banks to stock predictors for financiers, none of these have any obvious or immediate relationship to any particular economic theory. Rather, they are generally derivative of applied mathematics, not economic theory proper. This is proven moreover by the fact that such models and systems can be used in virtually any economic and political context, from Gosplan to Lady Thatcher. When it comes to economic theory, one is always dealing with theories about the dynamics of a whole society, and those are inherently so complex, rapidly changing, and affective of the evolution of their subject-matter, that one should not expect to be able to easily pass from theory-building to practical application in any particular case. Neoclassical economics does not in any way obviously perform better at such transferral than do competing theories.

2) Secondly, the whole phrasing deeply begs the question. For the insights of competing theories to be able to convince the mainstream of their ‘results’ and ‘solving problems’, there needs be agreement to a very large degree as to what constitutes the problems of the field in the first place and what sort of theoretical outcome or scientific product would count as a result towards solving them. In many fields of science, this is indeed the case: not just in most of natural science, but this is also broadly true for history, anthropology, archeology, (historical) linguistics and so forth. Economics is particularly remarkable precisely for the absence of such an agreement, whether now or in the past; as Backhouse himself points out repeatedly elsewhere in the book, many mainstream economists in their day also disagreed strongly on major questions relating to these without being thereby out of the mainstream per se. The fact the discipline reinvents not just its methods, but its entire purpose every couple of decades is unusual in social science as much as in the natural sciences it has tried so hard to imitate.

That being the case, one cannot reasonably expect there to be any way that an Austrian economist or a Marxist economist could produce results for problems that a neoclassical economist would be inclined to recognize, even one as relatively interested in heterodoxy as (say) Brad De Long, simply because there is no agreement about what the problems are and the methods used differ too much to allow much agreement over results either. A neoclassical economist thinks he has achieved a result when he has used mathematical techniques to derive a particular equilibrium outcome in, say, a fictional and simplified labor market. A Marxist economist thinks he has achieved a result when he has demonstrated a particular crisis phenomenon to be reducable to a fall in the rate of profit in value terms. While there is sufficient overlap in methods for it to be perhaps hypothetically possible, it is in practice not at all easy to see how there could be any meaningful communication between the two as to which counts as a result to which problem, and why the other should care.

3) Nor is it immediately clear why the insights proffered by the heterodox economist should be new. While one always strives for progress in science, this can only be measured by prevailing notions about results and problems, and by concrete changes in real phenomena effected by application of theory. The latter we have dealt with already. The former changes much more often in economics than elsewhere, as mentioned, perhaps with the exception of ethical and aesthetical disciplines. What’s more, to the eye of many of the heterodox, the history of economics from at least WWII onwards, if not WWI, is actually a history of a science going backwards rather than forwards. If one perceives economics as dealing primarily with questions of value, production, distribution, and trade, as both functions of whole societies and a historically woven social fabric they are made of, it is not at all clear that the development of economics between roughly 1918 and 2000 has avoided sheer retrogression on issues previously considered long dealt with.

Orthodox neoclassical economics, being the use of applied mathematics to solve problems of interactions between stylized individuals in modelled equilibrium settings, will appear to an economist interested in the questions debated in the century before as utterly inadequate to making any progress in the tasks at hand, if not outright ridiculous. The presumption that the insights of the heterodox economist should follow newly upon the already established current foundation already tilts the scale in favor of the orthodoxy. This is exactly because economics has not only changed significantly in agreed-on methods and its notions of problem and result, but that this in turn is the product of a larger change: a change in the subject matter. This is even more unusual in other sciences, but one does not do the historical record much violence to state that in the 19th century, economics (political economy) was generally regarded as dealing with economic production and distribution processes as social phenomena, and in the 20th century, economics was generally regarded as dealing with the interaction of individuals’ preferences in monetary transactions between them. Even a very naive undergraduate in social sciences will immediately observe that this involves a very significant shift in the actual subject of the discipline, never mind all the attendant ideas about what the problems of the day are.

Perhaps this century will see yet another such shift – one could plausibly hypothesize an economics of this century revolving around the relationship between personal identity (psychology) and revealed preferences in experimental and observed social exchange more broadly, pushing the field away again from mathematics and in the direction of anthropology. But each of these three economics disciplines deal in their own way with interesting and relevant subjects, and none of them are likely to produce methods and questions that would be of much help for each of the others. This is very strongly an argument, therefore, in favor of supporting a pluralistic, interdisciplinary and open-minded approach, rather than an approach based on orthodoxy wedded to novelty.

1) Roger Backhouse, The Puzzle of Economics: Science or Ideology?. Cambridge 2010: Cambridge University Press.
2) Roger Backhouse, The Penguin History of Economics. London 2002: Penguin.
3) Backhouse 2010, p. 163.

More on the Fake Left: The Chimaera of “Dissent” Magazine

In the last article on the fake left, one of the greatest menaces to socialist politics in the West today, I criticized the hypocrisy of the Euston Manifesto clique. Now it is time to turn towards their American equivalent, the so-called Cold War liberals and the supposed ‘radical democrats’ who represent the left foot of imperialism. For several decades they have found their home at Dissent magazine and its sister paper Democratiya, which recently has merged into the former. It is worth taking a brief look at the content and outlook of these bulwarks of false leftism in America, since they are all too common among the intelligentsia in the wake of the massive expansion of militarism in the West since the days of Eisenhower-Kennedy. Moreover, it is precisely the claims to left-wing, even socialist, legitimacy that makes these tendencies of thought so dangerous; it hopelessly muddles the boundaries between genuine socialism of whatever stripe and a liberalism that is dressed up in the language of the social-democracy of old but has more in common with Noske than with Marx. It is not because of sectarianism that we must insist on the importance of differentiating an essentially liberal attitude to politics – even a ‘left liberal’ one – and socialism, but it is because sometimes a similarity of language can mask highly significant differences in the goals either group genuinely seeks and the interests they represent in practice. Continue reading “More on the Fake Left: The Chimaera of “Dissent” Magazine”

The Concept of the ‘Superhero Comic’

In American popular culture, the comic strip is one of the most favored media, to the extent that both American and British (and sometimes both) works have recently often found a welcome audience when presented in movie format. This indicates that their popularity is not just based on the medium itself being appreciated by certain groups of people, mostly youth, but also on the content of the comics. Continue reading “The Concept of the ‘Superhero Comic’”

The Meaning of Moral Prototypes

There is no real evidence as to whether Homeros, historically accredited writer of the Iliad and the Odyssey, actually existed. When in the 1930s the American researcher Milman Parry interviewed bards performing epic poems based on the oral traditions of the Bosniaks, in what was then a very underdeveloped part of the Kingdom of Yugoslavia, he discovered that they all referred to a certain bardic hero. The name of this hero varied by whom was asked, but all agreed that this person was better at the performing arts than anyone else, knew all the old legends and tales better than any other, could memorize them more clearly and present them in a superior manner, and so forth. None of the people involved had ever seen him or knew anyone that had, but they had all heard from various other trustworthy people that he existed or had existed. To any objective outside observer, it seemed clear that this figure was mythical.

Parry, a specialist in the very early period of ancient Greece, was led by this research to propose that Homeros himself had been a mythical ideal figure of this kind. Perhaps he had not even existed at all, or perhaps he had, but had merely been someone to whom a much longer oral tradition had been ascribed, or he might have been the name given to what was really a development in ancient Greek society where the epic tales started being written down rather than further transmitted through their telling. Any of these were a possibility, but in the classical studies of that period this idea was a veritable bombshell. It was much resisted, for it implied that the 150 years or so that classical scholars had just been spending on a scientific approach to studying the meaning of these works as the products of one particular mind had been utterly in vain, for it would much more likely have been a compilation or mixture of various oral traditions from various sources.

This, however, is not all that can be said about this shift in viewpoint. What is interesting about this is that Homeros was nonetheless throughout all of the ancient times, both Greek and Roman (so-called, not to imply that Greece ceased to exist culturally under Roman rule), to have been the absolute ideal in poetry. In his book chronicling the reception of the Iliad and Odyssey through the ages, Alberto Manguel describes very well how for everyone from Greek tragic playwrights in the classical period to Latin-cultured Renaissance writers, Homeros was the gold standard in writing, not just for epic works (such as Vergilius’ Aeneis, a wholesale Romanization of both works in one) but also for other forms of writing, in terms of style, metaphor, structure, and so on. All this although they had no actual proof of his ever having existed, except that tradition would have it so.

Such moral prototypes, people who may not actually have existed, or if they did, not really in the grand manner ascribed to them, but who serve the purpose of being a lived reality of virtue, can also be found most interestingly in the Bible, to be precise the Old Testament. For the Jews living in the Judah and Israel of the post-exile period, the period of reconstruction as a small recently liberated group (albeit under Persian, Achaemenid rule) required a strong sense of norms to give life to the newly reconstructed society and to bind the group together against the many peoples in the surrounding area. This role was not only fulfilled at the time itself by the various prophets mentioned by the Bible to have lived at this time, Haggai and Zachariah, but also by the writing down of those ancient traditions which we know now as the Old Testament. These for the most part, as anyone knows, play the role of establishing the laws and norms for the Jews, to which they ascribe a divine origin. But more interestingly in light of what has been said above, it is clear that it was not enough for these laws and ordinances to merely be known; they must also be lived by example. After all, the content of a law, no matter how precise, is merely a dead letter unless people actually follow it, and all experience shows that the force of example is a much stronger one to enjoin people to do something than the force of codes alone.

However, the obvious problem was that since these laws and ordinances were to have been from ancient times, even from before the exile, and to fit within the known chronology of the Jewish history, the people living these laws also had to be from that time. In an essential move for any society seeking a new foundation to reconstitute itself, they undertook what Hobsbawm has called the invention of tradition; and not just in any specific form, but what is interesting to us here is how it took the form (among other things) of moral prototypes. Joshua is clearly the embodiment of the virtue of leadership in war for the Jews, as Solomon is the embodiment of wise rule. More rounded is the character of David, who embodies on the one hand loyalty to one’s legal ruler even when such ruler goes against the traditional laws and rules (indeed for all the talk of the absolute importance of obedience to God’s laws, the Old Testament chronicles seem to give no indication of any right of Jewish subjects to hold their Kings to these laws, but instead this is undertaken by God alone), and on the other hand the embodiment of the character virtues that a Jewish ruler should have. Where Solomon is the moral prototype of wisdom, David is clearly the moral prototype of leadership altogether, in precisely the sense as in the case of Homeros: he serves as the gold standard to which all in a similar position ought to aspire, he is the yardstick for all measurements of current equivalents, and yet this alone is not enough, for he also needs to have a narrative description of how these rules were lived and obedience to them displayed in practice.

People always have a need to know what a given law or moral norm means for them in practice, and how to apply them in the situations that may occur in their life. The continuing popularity of all forms of exemplary narrative in this regard is sufficient proof, from books with tips on Christian living to fairytales and invented epics like Tolkien’s. The moral prototype, however, seems to be the oldest and perhaps the most enduring of all these forms, for it embeds in our cultural-historical consciousness a human narrative, one that people can relate to in a way that they cannot to mere codes and norms, that describes how those same codes and norms can be lived in practice. Precisely because this is a historical, often epic or romantic adventure-type tale, it can be projected into the very shadows of the origins of that historical consciousness to which it wishes to speak, which maximizes its effect – the time of the Achaeans for the classical Greeks, the time of the early Kings and Judges for the post-exile Jews, the time of the Brythonics for the high Medieval courtiers, and so on. It is important to learn from these cultural phenomena to understand the workings of a new society.

On the ‘objective’ mode of reasoning

Very often in political discussions, particularly within certain kinds of socialism, the superiority of the objective mode of reasoning over the subjective is proposed. By this ‘objective mode of reasoning’ I mean the way of speaking in which it is argued that the actual, concrete effect of someone’s action counts more strongly than the intent that person had with that action or the subjective attitude that person had towards that same action. Here it is said that what counts is the ‘objective’ effect, not the ‘subjective’ aspects of it. The argument in defense of this particular way of reasoning is usually that it is the objective effect that actually exists in the external world, and that has causative power, rather than the subjective intentionality of the actor, which has only relevance for himself.

This issue often appears, for example, when it comes to questions of Party loyalty, and was for this reason often used by the orthodox Comintern parties and their leaders to ensure discipline among Party members in undertaking unpopular directives, or instructions considered to be contrary or even treasonous to the ideology that drew those people to such Parties in the first place. This went in particular during the period of Stalin’s government in the USSR, when many a Party Communist was appalled by instructions such as those aimed at combating social-democracy more than fascism, or, and I have personal experience with people burdened by this historical event, the forced repatriation of Communists who had fled the Hitler-governed Germany; in this latter case Communists were instructed not to subvert foreign governments’ efforts in sending these people back to Germany (and almost certain death or horror), because the Molotov-Ribbentrop Pact, guaranteeing the safety of the USSR, might be endangered by anti-German activities. The idea here was that although such directives might not subjectively have appeared becoming of a Communist Party, it was nonetheless necessary because the ‘objective’ effects of such actions were positive to the cause of Communism (which was then identified entirely with the USSR, but that is another issue which I will not go into here).

Nonetheless, the ‘objective’ mode of reasoning is seriously flawed. In particular, it suffers from an extreme vulnerability to reductio ad absurdum. Indeed, one may argue that at certain times it is more important what the objective effect of an action is for the actor than his subjective will or experience of it – all organized political activity depends on this, as otherwise every movement or party would split into as many parts as there are members, when nobody would be willing to pay heed to the effects of their actions, and only be concerned with their individual ideas of what should be done. Not even the most liberal party can operate on this basis – in fact, not even the anarchists, fierce opponents of all authority, allowed it when push came to shove in the past. But the risk lies on the other end. Say, one believes that capitalism suffers from inherent flaws, that will appear the more capitalism develops, so that the fullest development of capitalism will cause it to “create its own gravediggers” and lead to its overthrow, and that such overthrow is desirable. Under those conditions, a partisan of the ‘objective’ mode of reasoning could argue that any attempt whatever to impede capitalism only slows its development, and thereby the inevitable eventual overthrow of the system. Indeed, it would then be, ‘objectively’ necessary for Communists to support capitalism as much as possible in its development, because otherwise it would take longer for it to disappear! This might well be what Marx had in mind when he argued in his Speech on Free Trade that although workers have no particular benefit by either protectionism or free trade in Britain, free trade develops capitalist contradictions more fully, and thereby helps communism. But what an ultra-Trotskyist position this ‘objectively’ leads to, one that not even most Trotskyists would endorse! A similar result appears when one argues from a Third Worldist perspective that the overwhelming majority of First Worlders are parasites living at the expense of the Third World, and that this imperialist relation is the primary contradiction (as the Maoist terminology has it) of the world today. Under such circumstances, it can be said that it is incumbent on a Third Worldist living in the West to cause as much destruction and misery as possible in his environment, because regardless of what subjectively he may think of this, this would ‘objectively’ weaken the First World (if ever so little) and make the parasites less comfortable on their stolen thrones. In fact, one might even from this perspective argue ‘objectively’ for suicide of First Worlders who understand such contradictions, as this will also make the First World weaker and eliminate parasites.

Of course these examples may appear far-fetched or unfairly neglecting alternatives, but this kind of Modest Proposal-like ‘logic’ is precisely that which can be applied to any kind of situation, as long as one is willing to carry the ‘objective’ mode of reasoning to its extreme. We must recognize therefore, if we are not to be self-destructive in the extreme, that the scale of objectivity versus subjective experience is a sliding scale, where even if the truth is not necessarily found in the middle, then certainly at least some moderation must be sought rather than to seek certainty on either end. A lot of the infighting and internal strife between various Communist factions and sects, one would almost say denominations, of the past century has been the result of inability of the participants to see this particular phenomenon as a tension inherent in their reasoning, something which goes in particular for the various Leninists (tending toward the ‘objective’ end) and the anarchists & friends (tending toward the ‘subjective’ end). There are countless examples of situations where different positions on the scale of ‘objectivity’ have clashed within the left, leading often to dramatic results: Kronstadt, Molotov-Ribbentrop, Trotsky vs. Stalin, not to mention the numerous disputes over egalitarianism on the one hand and the need to promote specialists for planning and development purposes on the other hand, and many more. Yet socialists of all sorts do not cease haughtily berating each other either for lack of ideological commitment, or lack of sober, ‘objective’ thinking, causing much recrimination and little advancement.

I believe it is time we recognize this sliding scale for what it is, and accept that different people can take up different positions (even at different times) as to which should have the upper hand, without this leading necessarily to giving up any rooting in reality, or any seriousness about the idealistic content of socialist thought. If we do so, we will better be able to stick to factual and theoretical matters in discussions about policy and positions, rather than having to resort to arguing who is a ‘true’ committed Communist and who isn’t, based on differences on this normative scale.