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Bada Bing! Equilibrium!

Opinion pieces and speeches by EPI staff and associates.


Bada Bing! Equilibrium!

By Max Sawicky

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In his excellent article, Chris Hayes’ Mafia terminology conveys some useful information, but it isn’t the best word. When Tony Soprano strolls onto a construction work site, workers and supervisors alike are right to quake in their boots. By contrast, put an economist in the company of lay persons and he turns into a bowl of warm jello. And how could it be otherwise? After all, his or her methods require great effort to comprehend (an effort often unrewarded), and the policy prescriptions often affront perceptions of the national interest, not to mention common sense.

No, the zone of fear for elite economists is the Econ Department itself . . .

Tenured faculty tyrannize over the untenured and graduate students. Professors from elite departments loom over those from benighted realms. Grad students anxiously follow the ratings of their department. Are we top 20? Only top 30? Awwww . . .

Among the top ten, as among the rich, envy swells the greater. Number eight looks jealously at number four. Number three moans, why can’t we be number one? In the academic context, this I suspect is not an unusual state of affairs. Perhaps there is an English Lit mafia as well. The differences are that a) the Econ Elite affects public policy to the general detriment or the working class, and b) econ is what I decided to take up, damnit!

Outside the academy, there is kryptonite everywhere to sap the super-strength of the would-be supermen of public affairs. In the world of policy, whether in politics, business, or trade unionism, the economist plays second-fiddle to a genuinely powerful person. His esoteric knowledge provides some currency for stuff that his patrons want to do anyway. The problem with economists is the system they are chosen to serve.

If you like the Mafia metaphor, it should be clear that the code of omerta has already been broken. We have the testimony of made men like David Card, Alan Blinder, Dani Rodrik, George Borjas, Joseph Stiglitz, and Paul Krugman. Professionally speaking, brilliant people like Sam Bowles, Duncan Foley, Herb Gintis, and Lance Taylor sleep with the fishes.

Krugman is the most prominent case. He was o.k. with most mainstream economists until he started writing columns eviscerating Republicans. Then there was grumbling about polemics and propaganda. Milton Friedman bloviated for years on the pages of Newsweek (or was it TIME?) but never came in for the same treatment.

I suspect that few if any of the inner elite will rise in their defense. Why bother? “Top o’ the world, Ma!” We will have to make do with Tyler Cowen, which is ironic in this context. (Let me stipulate in passing that Tyler is a very nice fellow of great accomplishment.)

Tyler’s department at George Mason University is itself a consequence of the Mafiosi organization of the profession’s academic wing: a refuge for heretics. Originally there was just the gentlemanly James Buchanan and the crazy Gordon Tullock at Virginia Polytechnic Institute, founders of the mostly (but not entirely) reactionary “public choice” school (a.k.a. the “Virginia School”). They were not well-regarded by many of their peers in public finance, but they kept scribbling away. I believe they saw their mission as communing with their progeny and organizing them to be fruitful and multiply.

Way back in 1980, I actually applied and was accepted to VPI (they had night classes at Dulles Airport, of all places), and in the Federal government I worked with some GMU public choice folks in the middle 80s. Perhaps aided by the ascent of Reaganismo, JB and GT migrated from VPI to George Mason University, whose econ dept has become a big deal. It is a haven for the best and brightest of the Virginia School type, who have since spawned far afield from VPI. (The normal GMU economists are in the public policy department.)

Like the Acadians, the Virginia people underwent hardship, journeyed far, and have ultimately come to flourish. They are themselves heterodox, albeit in the anarchist/libertarian direction. They just don’t like to advertise it. Tyler is defending an orthodoxy under which his own status is problematic. There is probably psychological research explaining this, and Tyler has probably read it.

Going to Tyler’s points, the research on Dem v. Repub economists is irrelevant. First of all, many identifying “democratic” are a) intolerant of heterodoxy, and b) not very liberal. Second, many practicing economists do not inhabit the elite econ departments (or any econ department, as Jamie and Nathan have noted) that are held to represent the dizzy heights of economic erudition.

Tyler cites public choice as exemplary inquiry into power relations. The emphasis in public choice is on the depredations of public agencies, trade unions, and narrow interest groups. This can be interesting but it is small beer.

Tyler does not address the quoted words of economists of great stature who support the Hayes account.

Tyler’s other argument is that heterodox theory is no damn good. He is basically hanging back, daring somebody else to propose a theory that he can knock down. In the present context, this would be a mug’s game. No theoretical dispute is going to be settled here at TPM Cafe. The issue is not the acumen of long-standing, prolific, well-regarded academicians who think the wrong thoughts; it is the exclusionary, intellectual thuggery of the elite.

I have always found output from the mainstream (as well as the Virginia school) to be a very mixed bag. The tools that are provided can be useful, but they tend to be deployed to narrow, politically biased purposes. There are certainly insights to be had.

But there is some tipping point where even the use of the most conventional methodology to ends considered inappropriate will send a person’s professional well-being off the deep end. Methodology is but one of several filters. Tyler has noted some biases himself.

Tomorrow: how can people so pleased with themselves be oh so wrong about so many things.

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



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