Friday, May 28, 2010

Alternative Economics In Mechanics' Institutes And Think Tanks

Various nonacademic institutions have helped shaped the development of academic economics. Fred Lee, in his recent history, describes some aspects of the culture of university economics departments:
"Intellectual bullying of heterodox-interested graduate students; denying appointments, reappointments, and tenure to heterodox economists; red-baiting; and professional ostracism/discrimination" (Lee 2009)
In the United States around 1945, some institutions outside universities provided intellectual support and culture for left-wing intellectuals, including economists. I refer to schools for workers supported to some extent by the Communist Party:
  • School for Jewish Studies (New York)
  • Jefferson School for Social Science (New York)
  • Abraham Lincoln School (Chicago)
  • Samuel Adams School (Boston)
  • Boston School for Marxist Studies
  • Tom Paine School of Social Sciences (Philadelphia)
  • Walt Whitman School of Social Sciences (Newark)
  • Joseph Weydemeyer School of Social Sciences (St. Louis)
  • Ohio School of Social Sciences (Cleveland)
  • Michigan School of Social Sciences (Detroit)
  • Seattle/Pacific Northwest Labor School
  • Tom Mooney/California Labor School (San Francisco)
Under Truman, these schools were listed by the Attorney General as subversive. With continued McCarthyist oppression, none existed by 1957.

On the other hand, extremely rich reactionaries paid economists to argue for right wing views. This funding went to both universities and to think tanks set up since the workers' schools were shut down. Some examples:
  • Harold Luhnow, who made his fortune selling furniture, is important for the history at, among other places, the University of Chicago (Van Horn and Mirowski 2009)
  • Jasper Crane, a former executive of the DuPont Chemical Company was a major funder at one point of the Mont Pélerin Society (Phillips-Fein 2009)
  • Sir Antony Fisher, who introduced factory farming into Great Britain, set up the Institute of Economic Affairs in Great Britain (Blundell 2007, Mitchell 2009)
  • Leonard Read led the Foundation for Economic Education
  • Edward H. Crane founded the Cato Institute in 1977

Perhaps the long history of oppression of economists with certain views and funding of economists with others has had some influence on what ideas are developed. The above only provides a very limited glimpse of political interventions into academic economics. Much more can be found for those willing to look.

  • John Blundell (2007) Waging the War of Ideas,Third and expanded edition, Institute of Economic Affairs
  • Colleen Dyble (editor) (2008) Taming Leviathan: Waging the War of Ideas Around the World, Institute of Economic Affairs
  • Frederic Lee (2009) A History of Heterodox Economics: Challenging the Mainstream in the Twentieth Century, Routledge
  • Timothy Mitchell (2009) "How Neoliberalism Makes Its World: The Urban Property Rights Project in Peru", in The Road from Mont Pélerin: The Making of the Neoliberal Thought Collective (ed. by Philip Mirowski and Dieter Plehwe), Harvard University Press.
  • Kim Phillips-Fein (2009) "Business Conservatives and the Mont Pélerin Society", in The Road from Mont Pélerin: The Making of the Neoliberal Thought Collective (ed. by Philip Mirowski and Dieter Plehwe), Harvard University Press.
  • Rob Van Horn and Philip Mirowski (2009) "The Rise of the Chicago School of Economics and the Birth of Neoliberalism", in The Road from Mont Pélerin: The Making of the Neoliberal Thought Collective (ed. by Philip Mirowski and Dieter Plehwe), Harvard University Press.


Unknown said...

Robert -- the "free market" funding was half pennies on the dollar compared to the "mainstream" foundations which turned increasingly leftist over the decades.

And it can be argued that the stuff funded by Cowles and the Navy via Rand etc. was dominated by leftist math economists who were no friends of a genuine causal understanding of the functioning of markets of the sort that the best "free market" had achieved.

Unknown said...

Private foundation money was miniscule and counted for little as far as the guild structure of academic economics went -- lets be serious here.

What mattered were the universities and the military & "science" money from the U.S. government -- which funded "math economics", mainstream left of center math economics.

The "free market" foundations were small and didn't fund much basic research -- not anything which can be compared to the massive comparative funding source of the universities and the U.S. government.

Let's stay in the realm of reality and not conspiracy or fantasy.

Unknown said...

This is what these organizations did NOT much provide:

"political interventions into academic economics"

Anonymous said...

Mainstream foundations "turned increasingly leftist over the decades"? Really? Which ones?

"leftist math economists"? What, was the maths "leftist" or the economists? Which ones?

"academic economics"? You mean, neo-classical Keynesian synthesis economics? Yes, that is really "leftist"...

And after complaining about all the asserted but not proven funding by "foundations" and all those "leftist" economists, we get "Let's stay in the realm of reality and not conspiracy or fantasy"? Now that IS funny...

Strange, though, that we have such a visceral rejection of applying "demand and supply" to the economics profession. Now, rich capitalists want to be "left-alone" to accumulate their wealth. We have a demand there, now are we expect there to be no supply? That would be market failure on a staggering level...

Is that a conspiracy theory, applying supply and demand to economic ideology? It must just be a massive co-incidence that mainstream economics concludes that unions are bad, redistribution is bad, unemployment benefits are bad, and so on...

Interestingly, John Kenneth Galbraith noted the impact of wealth on the economics profession back in 1972:

"Economic instruction in the United States is about a hundred years old. In its first half century economists were subject to censorship by outsiders. Businessmen and their political and ideological acolytes kept watch on departments of economics and reacted promptly to heresy, the latter being anything that seemed to threaten the sanctity of property, profits, a proper tariff policy and a balanced budget, or that suggested sympathy for unions, public ownership, public regulation or, in any organised way, for the poor." [The Essential Galbraith, p. 135]

The Great Depression did offer an opening for a wider economics to develop, which it did. However, Keynes was squeezed back into the neo-classical framework and the rise of Monetarism in the 1970s effectively closed that off to a large degree. Maybe the new crisis will open thing up a bit, again.

Oh, but then again, there is Paul Krugman... He is a bit left-wing, so I take it all back :)

An Anarchist FAQ

Unknown said...

Most of the math economists of the 1950s were on the left -- and they misled themselves into believing that the "givens" of their math constructs could be used by central planners.

Read some history of economic thought.

Robert Vienneau said...

I think of Kenneth Arrow as illustrating Greg's position. According to Mirowski's Machine Dreams, he did take defense money through his work at Rand. And Mirowski presents much of the work being done there as an answer to Hayek's socialist calculation argument.

Institutionalism was an important alternative available at the time to such formalism. And institutionalism was engaged with many real issues in the economy. So I can see how one would think of formalism as a kind of quietism, a movement away from the left.

I've been reading the Blundell reference I give in my post. It is triumphal bragging about successfully changing the climate of opinion to be more rightist. And you can see, if you read it, that there's something to these claims.

Anonymous said...

The change happened because of Hayek' earlier arguments.

These little foundations had almost no role in shaping academic economics.

The foundations spread ideas to the public, mostly non formal popular writings.

peter said...

George Stigler, not a leftist or heterodox economist by any means, once argued that the production of economic theories should be analyzed like any other market. Who has the money to demand and pay for the production of economic theories in our society? Rich capitalists, mostly. What sort of economic theories are produced by economists in response to this demand? Theories which justify the status quo distribution of wealth, and which support the unfettered operation of capitalist markets. Why should anyone with any economics understanding be surprised at this?

Ronald Rutherford said...

Who has the money to demand and pay for the production of economic theories in our society?
Now that is a tough one...
The State obviously as it has unlimited resources and little accountability. Thus economic theories would in fact support the status quo and promote Keynesianism.

Anonymous said...

@ Ronald Rutherford:

"The State obviously as it has unlimited resources and little accountability"...

And it also has a mind, right? So that it can punish those who dare theorizing to the right, just like the Koch Brothers and all them 1%'ers.

"The market" is a concept, not an individual; so is "the State". It can't do, or not do, anything "by itself" without a conscious decision or interest by somebody to censor somebody else.
Please, learn to think properly.