Wednesday, December 14, 2011

A Serendipitous Juxtaposition

Tuesday, Peter Dorman, at Econospeak, considers why reactionaries in the United States are not embarrassed when caught at their constant lying. He says the contemporary right-wingers' pride in lying is ultimately derived from Leo Strauss. According to Dorman, Strauss taught:
"The cartoon version of Strauss, which is broadly correct, goes like this: The great philosophers of the past, each in their way, were led by the force of logic and experience to a dangerous insight, that no social or cultural arrangement can substitute for the necessity of virtue, and that only a small minority of individuals are truly virtuous... Those who perceive this truth must write deceptively, since the unworthy masses, if they sense that they are being judged unworthy, will persecute the truth-teller. Strauss provided readings of the canonical texts that claimed to show they functioned on two levels, as decoys for the average reader and secret wisdom for the initiate." -- Peter Dorman

And on Monday, Dani Rodrik, at Project Syndicate notes the difference between discourse among elite economists and what they tell introductory students and the general public:

"As the late great international economist Carlos Diaz-Alejandro once put it, 'by now any bright graduate student, by choosing his assumption...carefully, can produce a consistent model yielding just about any policy recommendation he favored at the start.' And that was in the 1970's! An apprentice economist no longer needs to be particularly bright to produce unorthodox policy conclusions.

Nevertheless, economists get stuck with the charge of being narrowly ideological, because they are their own worst enemy when it comes to applying their theories to the real world. Instead of communicating the full panoply of perspectives that their discipline offers, they display excessive confidence in particular remedies - often those that best accord with their own personal ideologies...

...In my book The Globalization Paradox, I contemplate the following thought experiment. Let a journalist call an economics professor for his view on whether free trade with country X or Y is a good idea. We can be fairly certain that the economist, like the vast majority of the profession, will be enthusiastic in his support of free trade.

Now let the reporter go undercover as a student in the professor’s advanced graduate seminar on international trade theory. Let him pose the same question: Is free trade good? I doubt that the answer will come as quickly and be as succinct this time around. In fact, the professor is likely to be stymied by the question. 'What do you mean by "good?"' he will ask. 'And good for whom?'

The professor would then launch into a long and tortured exegesis that will ultimately culminate in a heavily hedged statement: 'So if the long list of conditions I have just described are satisfied, and assuming we can tax the beneficiaries to compensate the losers, freer trade has the potential to increase everyone's well-being.' If he were in an expansive mood, the professor might add that the effect of free trade on an economy’s growth rate is not clear, either, and depends on an altogether different set of requirements.

A direct, unqualified assertion about the benefits of free trade has now been transformed into a statement adorned by all kinds of ifs and buts. Oddly, the knowledge that the professor willingly imparts with great pride to his advanced students is deemed to be inappropriate (or dangerous) for the general public." -- Dani Rodrik

This bifurcated discourse in economics creates a problem for critics. They can point out that most introductory mainstream teaching and applied policy advice of mainstream economists is self-contradictory and theoretically and empirically unfounded. Defenders of orthodox economists can then accuse the critics of attacking a strawperson. The failure to take their own advanced teaching seriously leads orthodox economists to disappear as a target, in some sense. Maybe the question is one of professional ethics.


Anonymous said...

You called "Dani" Rodrik "Dana" twice in this post.

Regarding Rodrik's (and your) comments, they suggest that perhaps criticisms of orthodox economics need to be split into different categories to avoid charges of "straw-manning". These categories might include "econ 101", undergraduate economics as a whole, standard graduate program economics, "simplified policy prescription" economics (e.g. "trade is good", "central banks should be independent",etc. regardless of whether orthodox theory even really supports these prescriptions), and finally state-of the art orthodoxy.


Robert Vienneau said...

Thanks for the correction. I fixed the spelling.

Gualra said...

100% agree. Is a standard practice to praise General Equilibrium as "The Model". But when it`s time to policy mainstreem economist always assume that factor demand curves are well-shaped.