Ask the Gemeinschaft: E. Roy Weintraub and Stephen Marglin Edition

Tyler Cowen sends us to Weintraub:

ECONOMICS: First, Kill the Economists: It is not often that a scholar with no particular historical or philosophical expertise trashes the Western.... Stephen A. Marglin's argument in The Dismal Science is that economics--with its focus on an individual's preferences, the freedom to engage in activities to promote his or her well-being, and the pursuit of self-interest variously construed--perverts a natural moral order:

the foundational assumptions of economics are in my view simply the tacit assumptions of modernity. The centerpiece in both is the rational, calculating, self-interested individual with unlimited wants for whom society is the nation-state.

And what modernity shunned was "community."

His main line is that "The market undermines community because it replaces personal ties of economic necessity by impersonal market transactions.... Economics is not only descriptive; it is not only evaluative; it is at the same time constructive--economists seek to fashion a world in the image of economic theory." Economics and thinking like an economist are bad for the health of the world....

The argument about the proper way to do economics is an old one. An 1832 complaint in The Eclectic Review charged the work of Thomas Malthus and David Ricardo with leading the public far from "the true path of inquiry" and making political economy "a hideous chain of paradoxes at apparent war with religion and humanity."... The professionalization of economics was a late 19th century phenomenon. Cambridge's Alfred Marshall, in attempting to construct a scientific economics, was not able to establish economics as a separate discipline until the death of Henry Sidgwick, the university's professor of moral philosophy, under whose direction lectures in political economy had been organized....

The kind of economics from which Marglin recoils is, however, not of the sort that was present in writings of individuals (e.g., Smith, Ricardo, John Stuart Mill, Marshall, and John Commons) who have been claimed as ancestors by modern economists. It is instead what developed in the post-World War II stabilization of economic discourse and the final professionalization of the discipline. It was during that postwar period, not in the Enlightenment, that economic science became normal in Thomas Kuhn's sense.

Marglin... believe[s] that the ideas he engages and then casts aside (ideas about the economic agent, preferences, equilibrium, models, and markets) all grew up not in the 20th century but hundreds of years earlier--and that those ideas have had stable meanings ever since:

For four hundred years, economists have been active in the enterprise of constructing the modern economy and society, both by legitimizing the market and by promoting the values, attitudes, and behaviors that make for economic success. No apology is due for this--except for the pretense of scientific detachment and neutrality and the unwillingness to confront the ideological beam in our collective eye.

The ahistoricity of such a statement is startling; for instance, it assumes wrongly that there were individuals called economists 400 years ago and that science in 1600 meant the same thing as it does in 2008.

In his critique, Marglin moves back and forth between moralizing about the loss of community and contempt for the economists' tools and models. He claims:

By promoting market relationships, economics undermines reciprocity, altruism, and mutual obligation, and therewith the necessity of community. The very foundations of economics, by justifying the expansion of markets, lead inexorably to the weakening of community...

From the first times economic arguments were parsed and markets described, there were those who found both contemptible, and this was well before the Enlightenment. Attacks on money lending at interest go back even earlier than Jesus on the temple steps.... William Coleman showed how over the centuries the very idea of economics has been loathed by left, right, and center; Christian, Jew, and anti-Semite; pope and communist dictator; lawyer and business mogul; and scientist and humanist.

In this same tradition of anti-economics, Marglin sees the future of the field as bleak, with the current generation of economics students avoiding large questions in their search for career advancement. And the problems that economics creates will only get worse, he claims, because globalization will make the national community as obsolete as the market has made the local community.

I note in closing that the lead dust-jacket blurb for this volume was provided by the noted economist and social theorist Bianca Jagger (sic). Whatever was Harvard University Press thinking?

I have always found it remarkable that Marglin cannot but assume that "personal ties of economic necessity" are a good thing. Whenever I hear somebody say that they wish I were bound to them by "personal ties of economic necessity," I think that what they really mean is:

I want a world where you don't get to eat unless I approve of what you are doing, so you will be very careful to do only things I approve of.

I don't like that world, much.

Perhaps the most ironic thing about Marglin's rants against associative gesellschaft society in general and economics in particular as destructive of normal, natural, good, right, just, human, blood-and-soil, gemeinschaft community is that Stephen Marglin has spent his life not in a gesellschaft but in a gemeinschaft: for forty years he has been a tenured professor in Harvard's economics department. Few positions in the world today offer a life more embedded in a structured traditional community than his.

The gemeinschaft that is the professional community of Ivy League economists in which Marglin has been embedded for the past forty years has not treated him with "reciprocity, altruism, and mutual obligation" but has--rather--in a very gemeinschaftlich way done what gemeinschaften traditionally do to corral their deviant members and to discourage others from imitating them. It has not been pretty.

But it seems to have had no effect on Marglin's thinking, none at all, for reasons I do not understand.

Comments

[John Emerson]

I'm sure that there are problems of detail, but can we at least agree that the proposal that all economists be killed is a sound one?

The counterintuitive rationality economists are so proud of produces a lot of glib, amusing creepiness presenting itself as truth, for example in the Chicago school (Becker, Cowen, Leavitt). Nelson's "Economics as Religion" has a nice chapter on this.

Marglin's Ivy League Gemeinshaft is a tiny controlled-entry elite which helps manage the Gesellschaft. Economists play by different rules than they propose for others, in the same way that our President, who believes that long French vacations would be an unconscionable drag on the economy, even though he takes one himself, and believes devoutly in hard work, even though for him it is no more real than the tooth fairy. I don't see that Marglin's personal situation discredits him.

There are more and more influential people who need to quit thinking like economists than the other way around. I keep hearing rumors and allegations that the field is changing, isn't as bad as people think it is, etc., but the evidence to the contrary keeps rolling in.

[Miracle Max]

Another view: (http://deirdremccloskey.org/pubs/revsof/dismal.php)

"But one can only applaud Marglin's readable contribution to the undermining of Max U."
-- D. McClosky

-- Max S. (no relation to Max U.)

[Knee-jerk, Cherry-picking Cynic]

A Miracle Max sighting! Best thing since the return of Fafblog!

[Peter H]

William Coleman's book is stupid. Read Walt Byars' comments about it: ihttp://archives.econ.utah.edu/archives/pen-l/2006w03/msg00084.htm

[Peter H]

Sorry, the link didn't work right:

http://archives.econ.utah.edu/archives/pen-l/2006w03/msg00084.htm

[Jonathan Stray]

I won't argue the ahistory of the quotes you have provided. Nor will I try to say that personal economic ties are uniformly good, though from spending time in traditional villages in various places in the developing world -- just about the only place where such ties still strongly obtain -- I can see that personal economic ties can perform an important social function: having to actually talk to your neighbors to get your bread, whether you like it or not, has interesting effects on community.

However, what if we leave the bile and innacuracies aside and wonder whether the classic "rational agent", by which is meant "self-interested agent", is actually a good model for human behavior? What sort of world does economic theory describe? Does the world actually look like this?

And do we want it to? I must say that I agree with the general idea that economic theory can be normative, even if it isn't meant to be. If nothing else, the conceptual framework(s) of neo-classical economics have been used as moral justification for a whole lot of bad. One can argue that this is abuse of perfectly innocent theory, but it also seems prudent to consider carefully how the conceptual framework of the subject influences our thinking about moral questions.

[ehj2]

Dear Mr. DeLong,

He isn't attacking you (as an economist), and you shouldn't be grossly mischaracterizing his ideas and then trashing them (strawman) -- because you're in more substantive agreement than you seem to think.

Most would find some truth in the following assertion -- in America if you provide an actual service from which society benefits, it isn't rewarded (financially.) Rewards in our society derive from those services that involve manufactured needs and creative destruction. I doubt that you are paid to maintain this blog, yet I suspect it is one of the most valuable things you do for the collective. I read here every day and thank you for the work you do that enables my privilege.

Economics as practiced in this country and exported to the world is insane -- we just spent several decades building an unsustainable society based on gasoline priced at less than water, which is not only renewable, it falls from the sky.

"Rational self-interest" doesn't exist, or most of the things you rail about in these posts wouldn't exist as problems. But "irrational self-interest" isn't quantifiable, so it falls outside your discipline, perhaps in anthropology or psychology.

This country is run on "voodoo economics" (I know you remember the term) for the benefit of the few who don't even have a stake in America; their investments -- like their domiciles -- are worldwide, and they simply follow profit where it takes them, even in the creative destruction of their own companies.

We can't talk about economics without talking about corporations, the economic "power actors" in a world in which buyers simply buy whatever is marketed to them (from Bush to the religion of "free markets" and "de-regulation" to endless war with teenagers in pajamas with $50 rifles) and now we're really into madness.

Corporations (as currently informed and designed by economic theory) are a significant part of our global challenge, only in part because corporate law requires boards to put short-term profitability above all other considerations, even corporate survival. Corporations, even as they use their considerable resources to influence politics through their ownership of the media and financial support for politicians, create and exacerbate global problems that now risk not merely current civilization but human life on the planet itself -- we're not the only country that's been on a permanent war footing since WWII and allows corporations to buy pseudo-scientists to market the notion of "controversy" regarding every threat to mankind.
 
While corporations are global, they are (unlike nation states) short lived; their philosophy is competition (never true cooperation) and their ethos is without question zero-sum gaming; most are bought and sold or traded like baseball cards. Why would we want our political structures (that guide our nation states) to adopt this philosophy which condemns the world to endless conflict? Yet we both know that corporations have successfully persuaded the electorate that our government (and in fact all governments) should be run like successful un-regulated corporations, and as a consequence we now have an un-regulated government in a country run like a poor island.

America is a continent that has outsourced its industrial capacity so it imports most "made" things, now imports more food than it exports, and imports most of its energy -- oh yes, and imports some $2 billion a day to pay for these things. This is the description of a wacky island country with an inept banker.

Extreme corporatism has taken America into a strange darkness, and we should recognize how bizarre and inhuman is a philosophy (based or rationalized in economic theory) that gives human rights to property (if it's corporate) while stripping rights from real people, including even the voice of those who actually labor in corporations and must sign non-disclosure agreements about the very dark sins of those corporations (truth becomes inadmissible in courts under such circumstances).

Your short diatribe will have better footing in my mind when Economics takes seriously its responsibility to define Corporate Law and State Governance in a way that serves people, a sustainable civilization, and the planet.

Respectfully,

[John Emerson]

Gemeinschaft v. Gesellschaft is hardly a binary either-or. As I noted above, and Brad too, the masters of the Gesellschaft preserve lots of Gemeinschaft among themselves, as a sort of luxury product or privilege. They only want to destroy it for the lower orders, except when community does work more cheaply than paid labor would (e.g., childraising.)

As Brad noted, Gemeinschaft can be restrictive. It can also protect, enable, and empower. In any given case, you have to sort out these effects and choose between the specific alternatives, rather than just committing to the Gmschaft or the Gsschaft side.

[ehj2]

John E,

We're in total agreement. And in the interest of full disclosure, I think I'm in total agreement with Brad. I was just frustrated by the take in this post.

For the last seven years I've had the following fear: that the ruling economic/political class in America was acting like the corrupt owner of a private corporation running elements of it into the ground and milking it (while doctoring the "books") before selling it to some unsuspecting buyer and leaving for a life of leisure in the Cayman Islands. We both certainly know who will be paying down the deficit for the next several generations -- not those who made it.

We conclude too quickly in this country that ownership makes people take better care of things, forgetting the many exceptions to this general rule. Until we change the rules of State Governance of Corporations to ensure that they are vested in America's success, we live in a Commons, and destruction is profitable if you can leave the mess for someone else to clean up and move on.

Economics is not a science (which is why there are so many competing ideas in it), but has the pretensions of a science, which makes it easy to "use" if your goal is to confuse with false credentials or sow dissention with "controversy."

Arguing that economics is benign is like arguing that Christianity is benign. Until more "good" is done in its name than "bad," economics will suffer a mixed reputation. The sooner it recognizes and embraces its psychological and anthropological underpinnings in sound ways, the better.

Again, homo-economicus just doesn't exist. Or Las Vegas wouldn't exist.

[wood turtle]

RE: economists. Can you shoot them for not including a German dictionary?

[John Emerson]

Economists are what fish-and-game people call "an underused resource", like carp, suckers, or dogfish. They can be shot at any time in any quantity for any reason. Bag limits and closed seasons may have to be imposed at some future date, once the population has been properly thinned.

[david]

Max is missed.

"Whenever I hear somebody say that they wish I were bound to them by "personal ties of economic necessity," I think that what they really mean is:

I want a world where you don't get to eat unless I approve of what you are doing, so you will be very careful to do only things I approve of."

But that's not what's being said, of course, you're just hearing things.

[Yes it is. That's what "personal" and "necessity" mean here.]

You ought to hear "I'd like to live in a world where externalizing costs onto people is not thought of as creating shareholder value." You live in a world where Jack Welch is considered a hero -- do you like that part?

[John Emerson]

Incidentally, carp, suckers, and one kind of dogfish are downright tasty, and wrongly scorned. The bowfin dogfish isn't, though, just the burbot.

[ehj2]

Well, making a granular distinction with a difference here, I'll agree that Corporatist economists are an underused resource -- and for me the word Corporatist has the same relation to Corporation as Christianist does to Christianity.

[ivan janssens]

The case for the gesellschaft has been made over sixty years ago by Karl Popper in his Open Society. By defending the gemeinschaft against the economists Stephen Marglin is revealing himself as an enemy of the open society.

[John Emerson]

Yes, definitely anything Karl Popper ever said about anything must be taken as definitive.

[Bob Webber]

If Stephen Marglin has been denouncing the ideas of his scholarly community at Harvard for the 40 years of his tenured professorship, and if we accept Brad's characterization of the economics department, we must conclude that Marglin has wasted his life by spending it shouting down a Gemeinschaft.

[Bill Lumbergh]

[It seems to me, as a historian, that people with names like Gilgamesh, Khufu, and Agamemnon had created such a world thousands upon thousands of years ago. The ahistoricity of you comment is, I think, startling.]

It seems to me, as a layperson, that modern economics and economists have had a hand in creating the attitude that:

"I want a world where you don't get to eat unless I receive some form of remuneration, and therefore you will do exactly as I tell you, and eat exactly what crumbs I leave for you."

I live in a world where the economic 'strong-arm robbery' of a neighbor is acceptable, and I detest it.