Wednesday, February 25, 2009

Economics and Its Enemies

William Coleman’s Economics and Its Enemies: Two Centuries of Anti-Economics is an amazingly comprehensive intellectual history of over two centuries of anti-economics. (It is online at Questia.)

Coleman is careful to define what he means, both in terms of what is being opposed in anti-economics and in what constitutes anti-economics. The target of anti-economics is what he calls, following Leon Walras, le Grande Tradition of economics – a set of ideas (not people) which have had influence within the tradition (not merely the currently accepted ones) and which are not an ideology or doctrinal conformity because
it includes debates without any resolution, and inquiries without conclusion (p.9).

What constitutes anti-economics is criticism, not of details, but that attempts to repudiate key constituents of the Tradition:
Economic theories, anti-economics holds, are valueless either to seekers of knowledge, or improvers of society (p.12)

So, anti-economics covers objections to the doctrine, practice and subject (matter) of economics.
Coleman divides Right and Left according to two axis (p.47): Right
defined as attraction to ‘order’. Order amounts, in the first place, to calm and stability, then shades off into structure and pattern, which shades off finally into inequality and hierarchy

and Left
defined as an aversion to order; and amounts at bottom to attraction to motion, change, and turbulence, that shades into fluidity and formlessness which shades finally into indistinctiveness and therefore equality.

The second axis is liberalism to anti-liberalism:
Liberalism is defined as an attraction to the prerogatives of the individual, freedom and ‘plurality’. The anti-liberal, by contrast, is attracted to the prerogative of the collective, ‘unity’.

So we have (p.47) the liberal Right attracted to order and plurality (e.g. F. A. Hayek), the anti-liberal Right attracted to order and unity (e.g. Auguste Comte), the liberal Left to turbulence and plurality (e.g. John Stuart Mill) and the anti-liberal Left to turbulence and unity (e.g. Karl Marx).

The anti-liberal thinkers constantly lead to analytical dead-ends. The problem being that attempts to base analytical methodology on collective entities (nation, class, culture, etc) all fail, often fairly quickly. We may be individuals embedded into social contexts of various forms, but we remain individuals. The more one probes analytically, the more we see that people do not act as if one single collectivity is always dominant, but belong to many different collectivities whose salience varies from context to context (and from person to person even in the same context): collectivities, moreover, which are subject to change, division, exit and entry.

Methodological individualism has to be the base of any successful social science. This certainly does not preclude interest in social collectivities. But successful analysis must be grounded in the reality of humans as individual agents.

The same ideas come up again and again in anti-economics. The criticisms also come in reversing pairs. Thus, there are those who damned political economy (as it was originally known) as being subversive of established order (‘The Wretched Procurers of Sedition’ as Chapter 2 is entitled), blaming it and its adherents particularly for the French Revolution. Then there are those who have damned economics for upholding the social order (being The ‘Apostles of the Rich’ as Chapter 3 is entitled).

Having dealt with the pairing over economics and social order, Coleman moves on to those who attacked the universalism of economics in the name of the particularities of nation (The Dream of Nationhood, Chapter 4), then to the murderous persecution of economists by Stalin (Chapter 5) in the name of a rival universal analysis. Nazi Germany was indifferent to economics and German economists tended to be less than enamoured of the regime (p.99ff). But Marxism had pretensions to being an economic science while Nazism was more concerned with other things.

Part I having defined the subject matter and Part II having dealt with anti-economics based on political ideologies, Part III looks at anti-economics based on broader concerns, starting with irrationalist attacks on economics (Chapter 6) then moralistic attacks on economics (Chapter 7). Coleman identifies values that are embedded in the Tradition – reason, human well-being and freedom (understood as choice) (p.133). This value triad provides the basis for conflict – either with traditions based on fewer values (e.g. libertarianism) or different values or which flatly deny those values (p.134). It also leads to a distinct tendency to be opposed to coercion and cruelty – political economists, almost without exception, were opposed to slavery while slavery apologists tended to be anti-economists (pp 155ff).

Coleman then moves on to attacks on economics as encouraging selfishness (Chapter 8) and attacks that take offence at the (alleged) selfishness of humanity (Chapter 9), environmentalism being an obvious, though far from only, manifestation of the latter critique. Coleman notes that environmentalism has tended to grow as Christianity has lost status (pp 169ff).

In line with the “mirroring” nature of anti-economics, having examined attacks based on economics as being beholden to wealth creation, Chapter 10 (Rival Gospels of Wealth) looks at anti-economics based on economics as not being beholden enough (or correctly) to wealth creation. Including, I am glad to see, engineers’ tendency to become attached to energy fetishism (pp 181ff).

In Part IV, Coleman examines anti-economics based on a sense of harm done to oneself by economics. That is, the anti-economics of interest (Chapter 11). Coleman argues that the anti-economics of interest and ‘ideal’ anti-economics feed off each other (p.191).

He then mounts an elegant argument for the unpopularity of economically liberal reform on the grounds that everyone has an interest for which free trade is not optimal:
the free market is never the optimal policy regimen for any interest. What every interest cherishes is preference and privilege, not the free market’s cold equality before the law. There is no vested interest to support the free market. Whatever friends the free market has are false friends, and its true enemies are all-embracing. The vocation of the free market advocate is a universally unpopular one (p.195).

A thesis with a lot of evidence to back it up.

Thus labour markets tend to be highly regulated because such a high percentage of the adult citizenry has – directly or indirectly – an interest in regulation that protects job incumbents. Similarly with housing markets and housing incumbents.

In Chapter 12, Coleman examines anti-economics that attacks economics and economists as evidencing an unwarranted authority and definiteness. In Chapter 13, he carefully looks at the conjunction between anti-economics and anti-Semitism, noting it used to be quite strong – since various forms of anti-economics attacked the market attachment, universalism, self-interest, rationalism and materialism of economics: all features frequently associated with Jews and Jewishness (p.213). But the conjunction collapsed with the collapse of the respectability of anti-Semitism.

In the final Chapter (The Not-so-Puzzlin Failure of Anti-Economics) he considers how little effect the barrages of anti-economics has had. He notes the repeated failures to accurately represent economics, to adequately examine economics, to adequately evaluate it (pp 220ff). This he subscribes to ignorance, to psychological inadequacies (an amazing number of prominent anti-economists had physical or mental health problems) and being grounded, not in perplexity, but frustration, affront and humiliation (p.230).

Coleman concludes by examining how criticism is properly done and how the Tradition has responded to such. His point that economics integrates and homogenises, in stark contrast with other social sciences (specifically psychology and anthropology, though much the same point can be made about sociology), is a very good one (p.232ff).

Thus the flaws of Marxism were noted by economists very early on. With the consequence that Marxism became very little about the study of economics, instead fracturing into many different tendencies and conjunctions (pp 233ff).

I found Economics and Its Enemies to be an enlightening and stimulating read. It should make the various species and manifestations of anti-economics much easier to spot, categorise and demolish.

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