Archive | May, 2018

What happened to economics?

7 May
Eric Posner and Glen Weyl, “How Economists Became So Timid”, The Chronicle of Higher Education.
Then:
Self-styled American and European radicals, for example, helped end monarchy and expand the franchise. The free-labor ideology of European radicals and American Radical Republicans helped abolish serfdom and slavery and establish a new basis for industrial labor relations. The late 18th and 19th centuries also witnessed the liberal reformism of Jeremy Bentham, Smith, James and John Stuart Mill, and the Marquis de Condorcet; the socialist revolutionary ideologies of Pierre-Joseph Proudhon and Marx; the labor unionism of Beatrice and Sydney Webb; and, influential at the time but now mostly forgotten, the competitive common ownership ideology of Henry George and Léon Walras. This ideology shaped the Progressive movement in the United States, the “New Liberalism” of David Lloyd George in Britain, the radicalism of Georges Clemenceau in France, even the agenda of the Nationalist Chinese revolutionary leader Sun Yat-Sen. The Keynesian and welfare-state reforms of the early 20th century set the stage for the longest and most broadly shared period of growth in human history.
Now:
The upshot is that economics has played virtually no role in all the major political movements of the past half-century, including civil rights, feminism, anticolonialism, the rights of sexual minorities, gun rights, antiabortion politics, and “family values” debates. It has been completely unprepared for Trumpism and other varieties of populism, having failed to predict those developments just as it failed to predict the financial crisis of 2008. And, until very recently, it has shrugged at one of the most politically charged and morally troubling issues of our time — the rise in inequality.
Even the recent attempts of the field to live up to its heritage have fallen flat. Thomas Piketty’s Capital in the Twenty-First Century, while widely perceived as a successor to Marx’s Capital, ends by half-heartedly proposing a modest global tax on capital. Where is the modern Smith, Marx, George, or Keynes? Other fields have not stepped up to fill the void left by political economy’s collapse. Sociologists and political scientists largely eschew specific policy proposals. And political philosophers, while offering bold visions of ideal societies, usually avoid dirtying their hands with the details of feasible policy design.
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