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The best theory money can buy

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Opinion pieces and speeches by EPI staff and associates.


The best theory money can buy

By Max Sawicky

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I’ve found the ‘Mafia’ debate about economic theory and method, especially the back-and-forth between professors DeLong and Galbraith, to be highly informative, interesting, and entertaining. Most of it, however, has been a gigantic diversion from the original subject, which was not economics, but economists. More specifically, the economists who control the elite university departments and by extension, the profession.

Brad is often* magnanimous in engaging competing arguments about economic theory and public policy. But he is clear about what he takes to be his professional oblgation:

“MIT Keynesianism (DeLong’s school. — mbs) does not claim that East Anglian Keynesianism is not “Keynesianism.” (It claims that it is a sterile research program, that pursuing its line of research is harmful to graduate students’ intellectual development, and that its model-building practices lead to fuzzy thinking, but it doesn’t excommunicate East Anglian Keynesianism.)”

The final “doesn’t excommunicate” in this context means precisely nothing. No religious procedures are in question. The duty of orthodoxy is clear: deny departmental positions and resources to inferior research programs and purify the top journals of incorrect thinking, all understood as maintaining high standards. After you deny them professional positions, standing, resources, and exposure, the only thing worse that could be done is to commit errant economists to mental institutions.

Of course, departments and journals do need to separate wheat from chaff. Otherwise we get a Professor Newt Gingrich. The problem — seriously addressed by nobody — is one of process, or governance. Not what is wheat, and what is chaff, but more directly, how is that question decided? Who decides? The answer is not in figuring out which way the Keynesian project should have evolved.

I don’t have any brilliant procedural reform proposals, except to holler, “Loosen up, you S.O.B.s!”

More to the point, if anything it will be events and politics that will reform the profession, just as politics has pushed the mainstream this way and that from the beginning. The barrenness of standard policy nostrums in the face of unsatisfactory conditions of life for the masses will shift the center of gravity, as Jamie suggested in his first post.

Case in point: my tiny think tank has had public events this year with the following keynoters: Senator James Webb, Paul Krugman, Rep. Rosa DeLauro (senior Dem on Appropriations Cttee), Joseph Stiglitz, and Rep. Barney Frank (chairman, Financial Services Cttee). I don’t really need to complain.

In the same vein, you will gradually see a new cast of characters testifying before Congress, appearing on C-Span. Don Imus is off the air, Glenn Beck is hanging on by his fingernails, could it be long before Phil Donahue is back? The ground is shifting.

Conditions are ever more propitious to explain how the world’s greatest economists have been wrong, wrong, wrong, just like the greatest “war cabinet” and the greatest analysts of national security.

Call it demand shocks in the marketplace of ideas. Then even our academics will understand.


* But not always. We have seen unhinged tirades directed at Duncan Foley, David Ruccio, and a deceased Paul Sweezy.

Max Sawicky is an economist at the Economic Policy Institute in Washington, D.C.