Friday, July 12, 2013

Mankiw and the myth of one economics

I avoid commenting on Mankiw's blog, since it is, in my view, the worst of the mainstream. I'm okay with Krugman, who at least uses neoclassical economics to try to understand the world (although his economics makes it difficult for him). But Mankiw is a different animal, and seems to be more about justifying the worst of conservative policies. Also, he is the sort of the leader of New Keynesians (or was at some point), which is a terrible misnomer used by fundamentally anti-Keynesian authors [Mankiw is only Keynesian when it is convenient for the 1%; he is against higher taxes, since that would make productive people like him work less; yes a good reason to for higher taxes on the wealthy indeed!].

At any rate, I'll make an exception this time, since I think the topic is relevant. In a recent column on the NYTimes, on the new head of the CEA, an ex-student of his, he said:
"The field of economics offers a lens through which to view the world. For those who buy into it and pursue it as a career, it provides a foundation of a personal and political philosophy. It forever sets you apart — for better or worse — from mere muggles. 
For economists working for politicians, as both Jason and I have, there is an inevitable tension between where the logic of the discipline leads you and what your political allies would like to hear."
This reminds me of the title of Dani Rodrik’s book One Economics, Many Recipes. The notion is that there is only one economics, one field in which there is agreement for the most part. This myth is perpetuated, not only by Mankiw, but by the likes of Krugman and other more progressive mainstream authors too. Like Rodrik, for example.

This is very revealing of their views of what economics is, and what economists do. I commented before on Rodrik's views of economics. Rodrik’s definition of economists is interesting, not so much for what it says, but because of what he feels he needs to say. Rodrik says in his Has Globalization Gone Too Far that: “when I mention ‘economists’ here, I am, of course, referring to mainstream economics, as represented by neoclassical economists (of which I count myself as one).”

The clarification must dispel any doubts of where he stands. He may be critical of certain aspects of the globalization process, but God forbid somebody misconstructs his critique and takes him for a heterodox economist! One is led to believe that Rodrik thinks that the consequences of not being part of the ‘gang’ must be pretty harsh.

In fact, in a post in his blog, nicely titled “Is Neoclassical Economics a Mafia?,” Rodrik conveys the following story: “some years ago, when I first presented an empirical paper questioning some of the conventional views on trade to a high profile economics conference, a member of the audience (a very prominent economist and a former co-author of mine) shocked me with the question ‘why are you doing this?’” Clearly his co-author was concerned with the effects that being critical of free trade might have on Rodrik’s career. Rodrik’s co-author is, most likely, just a good friend, but his question reveals a lot about the dark corners of the edge of the profession.

The point is that neoclassical economics is the only acceptable 'economics', not because logic and empirical evidence compel one to follow the marginalist principles, but because of the sociological pressures of being part of the dominant paradigm and the need to engage in normal science. So being an 'economist' in Mankiw's sense might separate you from mere muggles, but it might make you a member of the Cosa Nostra!


  1. The concern for me is that it is difficult to break away from the indoctrination of 'one economics' forwarded by the establishment and the channels through which it is propagandized have greater weight than just economics departments. The edifice hasn't crumbled despite the paucity of real world policy prescriptions emanating from the neoclassical ivory tower. Who really reads the AER? Countless more read The Economist and Wall Street Journal and their opinion pieces are neither scientific nor value free yet influence many. The world's most sought after investment certification subscribes to Friedman and Schwartz's view of The Great Contraction in its economic readings and regularly enlists card carrying members of the Chicago School to give their views on markets, the economy, and policy allthewhile maintaining a bias towards light touch or self regulation in the financial services sector. From a personal standpoint, I couldn't understand the first political economist I came across, W. Robert Needham, nor the first post Keynesian, John Smithin, as my epistemological framework brought me back to the neoclassical equations that I learnt and understood during the formative years of economic training for that felt like reality even though it was never realistic. Eventually, I had an epiphany that it didn’t make sense but how many do?

    1. True. There are few popular publications that are heterodox, or open to heterodox ideas. Challenge and Dollars & Sense come to mind. And there are a few good journalists like Greider, Kuttner, Madrick. Dean Baker's blog (Beat the Press) provides good progressive responses to the regular conservative/neoliberal stuff in the media.


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