Because most philosophies that frown on reproduction don't survive.

Thursday, December 15, 2011

Critiques of Economics and Keeping Economics in its Place

Greg Mankiw links to a brief talk given by fellow Harvard professor Steve Marglin as part of an "Occupy Harvard" teach in. Marglin offers a course via the course called "Economics: A Critical Approach", and most of this talk is devoted to explaining why he thinks it's important to criticize "mainstream economics" and how Marglin was unable to get much of a hearing from his fellow members of the Economics Department at Harvard -- indeed he says he basically doesn't talk to them. He complains that the economics profession has become monolithic in accepting certain things, such as the efficacy of markets and the importance of efficiency, which he believes should not be so uncritically accepted, and as such that basic economics textbooks and courses (whether taught by "conservative" economists such as Mankiw or liberal ones such as Krugman) offer a univocal and uncritical examination of the issues at play.

There are actually two very different types of critique of mainstream economics which Marglin says that he deals with, though it's not clear from his talk whether he sees these types of critique as distinct. Firstly, there are what I would term economic critiques of "mainstream economics". One he mentions in particular is Keynes' critique of the idea that the normal state of an economy is full employment. I'm not clear that full employment is widely assumed to be a natural state for an economy these days -- certainly, economies with truly "full employment" are virtually never seen outside of very unusual circumstances. But this is definitely an economic critique. He also mentions more vaguely some "very good" Marxist critiques of economics. He doesn't go into detail as to what these are, but I would assume that these also deal with actual economics.

Most of the critiques he discusses, however, are what I would term moral critiques of economics. He talks about a critique from inequality -- as to whether a distribution of income in which some people have much and many others have little is right. He talks about an environmental critique -- as to whether means of growth are sustainable and environmentally just. He talks about Catholics Social Teaching (and though he doesn't state what this critique is, I assume he must then talk about the concept of the "universal destination of goods"), etc.

Now, although I imagine that Marglin and I see eye to eye on few political issues, I would very much agree that "what is economically efficient?" is very from from being the sum and total of thought one should give to many economic problems. Economics, to the extent that it is a study of how things work, doesn't answer questions of "what ought I to do". At best, it gives some idea of what happens in a system when you make some change. While it may tell you what the results of an action might be, it won't tell you whether the action (or the results) are good.

Personally, I'm fine with that. I don't see that economists have any especial ability to discern "the good", and so I'd be quite happy to have them stick to "what happens" and let people go off and discuss "what is 'the good'" via more established means of philosophy and theology. I like the idea of economics being a lesser science.

Marglin, however, seems to want to pull those questions of "ought" into economics itself and address them there. In this sense, his approach reminds me a bit of the Creationist or Intelligent Design objection that the physical and biological sciences don't give sufficient consideration to God and morality. For my part, while I can see the value of addressing economic critiques of mainstream economics in an economics course (though clearly, as Marglin concedes, one would actually need to learn the mainstream economics first before the critique) I don't think that addressing moral critiques of economics in an economics course is necessarily a good idea -- other than acknowledging that economics is not itself a full life guide to policy and action.

2 comments:

Chris Burgwald said...

Darwin, can't it be said that every system of thought in every discipline makes certain presumptions about the nature of the good, though? Is it really the case that economics as a science is able to describe "what happens" with complete objectivity? I'm very much open to persuasion otherwise, but it seems to me that "ought" questions are *already* embedded within economics, and that it's completely legitimate to raise the issue of which ought questions are the right ones from within the context of economics itself.

Thoughts?

Darwin said...

Hmmm. Let me see if I can successfully take this in parts:

can't it be said that every system of thought in every discipline makes certain presumptions about the nature of the good, though?

I'm not sure to what extent this is the case. Part of the problem would be deciding what kind of discipline to compare economics to. Do you compare it to a social science? What assumptions does sociology or political science make about the nature of the good? Or do you compare it to a physical science of some sort? What assumptions about the nature of the good does physics or chemistry or evolutionary biology make?

Now, I think that there are probably some biases built into the method of economics, in that it's only able to examine certain things. So, for instance, some economists have tried to look at what religious beliefs or practices "benefit" people the most -- but clearly this makes an assumption that some sort of measurable material gain or reported gain in "happiness" is the purpose of belief, something that I would deny.

I suppose that to the extent that economics measures how well scarce resources are allocated, one could say that it assumes that it matters how resources are allocated, such that one can talk about them being allocated "well" or "badly". I guess I'd tend to say that's more a matter of assuming that what people appear to want to the extent that they're trying to allocate it efficiently is in fact some kind of a good and thus worth allocating efficiently.

Is it really the case that economics as a science is able to describe "what happens" with complete objectivity?

I certainly don't think it's able to do so with complete accuracy -- in many systems there's simply not enough known or knowable, in terms of motivations or contrafactuals, to describe or predict "what happens" with complete accuracy. Though it's object a better shot than assumption, which is the other tool people turn to.

As to objectivity: People themselves are often not objective, but I don't really think that the method itself lacks objectivity except to the extent that it necessarily gives only a partial picture.

I'm very much open to persuasion otherwise, but it seems to me that "ought" questions are *already* embedded within economics, and that it's completely legitimate to raise the issue of which ought questions are the right ones from within the context of economics itself.

I don't think that there are necessarily "ought" questions embedded within economics itself as within what questions people choose to try to answer with it. For instance, one person may ask, "What will increase GDP the most," while another might ask, "What will increase employment most broadly," while yet another might ask, "What will improve the lot of the bottom 20% the most."

Perhaps there's an additional layer of bias too in that each of these are progressively harder to get any kind of rigorous answer to via standard means of economic analysis -- and so it's not just a matter of thinking what to ask but of being shaped by what you can readily come up with a good answer to.