Yet another think piece on the dismal science

Right now, I think many educated people’s views of economists can be captured by this hypothetical dialogue.

Civilian: “I’m worried about doing X, it will increase inequality.”

Economist: “With the money society saves by doing X, we can reduce inequality.”

…Society does X

Civilian: “Should we use the money we saved to reduce inequality?”

Economist: “Fuck no, that would reduce efficiency.”

This is a bit odd because, on the whole, economists are, while nowhere near as leftwing as I would like, somewhat left of center, yes, even on ‘economic’ issues and not just social issues. So what’s the cause of this rightwing reputation?

There are a number of reasons economists ended up with this dire reputation. What I do not buy is that some kind of methodological ‘original sin’ has doomed neoclassical economics to be eternally rightwing. A lot of its key figures- from Walras to Lerner- were socialist, and many more were leftwing. Neoclassical economics may well be afflicted with certain methodological ‘original sins’ that cause all sorts of harm, but its history shows it doesn’t have an inherently reactionary character. So why are things like this?

One reason economics ended up this way is that many uncritically bought into the new welfare economics, which treated ‘efficiency’ as a legitimate goal of economists, but saw advocating for a certain level of redistribution as ‘value laden’. In truth, both are value-laden, there’s no easy way out of value-laden work if you’re going to engage with policy, as even the original critics of the old welfare economics saw. Kaldor-Hicks’ efficiency, in particular, is far from innocent, it systematically favors the rich.

Another is that the right -successfully and often without pushback from the left- associated rightwing policy with the economics profession in the public’s mind. The left was often only too happy to allow the right to claim contemporary economics, after all, they told themselves, didn’t Marx prove economics bunk or something? As a result, most highly educated people- on the right and left- think the economics profession is far more rightwing than it really is.

Yet another is that, at times, the economics profession has been genuinely quite conservative relative to what the evidence would support, even leaving aside my concerns about the new welfare economics. There has been a good case that one can’t treat labor markets like other kinds of markets vis a vis the minimum wage for yonks. Nevertheless, economists only moved their opinion on the minimum wage very slowly, stuck to an assumption that one could treat it like a simple price floor under perfect competition.

But more than anything else, the reputation economists hold as rightwing reflects the failure of the large majority of economists who aren’t rightwing to do something about it. That rightwing economists would try to convince us that economics endorses rightwing policies is not surprising, what is surprising is the failure of leftwing economists to fight back. When leftwing economists do fight back, it is all too often by ceding ‘mainstream’ economics to the right and digging in around heterodoxy. By all means, go with heterodoxy if that’s what’s in your heart, but that’s no reason to let the right claim that standard neoclassical economics and econometrics are in their corner.

Often, it seems to me, that even economists who favor leftwing policies do so in a way that is very asymmetric to the way their rightwing colleagues favor rightwing policies. A leftwing (mainstream) economist will let the perfect act as the enemy of the good and only back a redistributive policy if it is exceptionally well designed. Rightwing (mainstream) economists though will very often back any old rubbish that has the support of the rightwing establishment. Right-wing economists have been politically dynamic, loyal, active, and strategic in a way left-wing economists haven’t been.

Am I saying that leftwing economists should be hacks? No. But am I saying they should be a bit more hacky? Yes. If a policy will make things better, in general, you should back it and back it strongly, rather than waiting for something more efficient to come along. Go with the flow and force of history and politics.

There are disciplinary forces at play, in both senses of the term disciplinary. A Rightwing of economists who publicly argue that economics means we have to be extraordinarily conservative- from Sowell to Laffer has run like a streak through the discipline. That streak is generally tolerated in good humor, much more so than its equivalent on the left. In my experience, economists are just much more likely to whinge about controversial figures on the left, like Ha Joon Chang, or if you want someone more esteemed, Krugman, than they are to whinge about figures like Mankiw, Sowell and the like. Strangely, this is sometimes even true of economists on the left. A left-leaning economist might roll their eyes at the right, but they’ll get out the red pen for left, finding errors real, imagined, and overblown. At a theoretical level, Austrian economics is much more integrated into the discipline than various leftwing heterodoxies, even when there is leftwing heterodox material that could be integrated into the mainstream. Why all this is so, I’ll leave for sociologists of science [and capitalism].

But as for changing it, there is really nothing for it but to stick one’s head above the parapet. Leftwing economists within mainstream economics, and not just heterodoxy, need to be more proactive and strategic. A post on Crooked Timber that I can’t find now and maybe just imagined once compared the neoliberals to Leninists, in their combination of discipline, strategic outlook, dynamism, and sheer determination to win. We need, then, a few Lenins of our own with sharp minds for politics not just in the sense of high-minded theory, but maneuver and organization.