A nice essay by Roger Backhouse and Bradley Bateman in today’s New York Times (Wanted: Worldly Philosophers) has prompted a last thought on Lionel Robbins, having now finished his[amazon_link id=”0814773893″ target=”_blank” ] Essay on the Nature and Significance of Economic Science[/amazon_link]. Backhouse and Bateman (who have a new book out, [amazon_link id=”0674057759″ target=”_blank” ]Capitalist Revolutionary: John Maynard Keynes[/amazon_link]) criticise economists for failing to think enough about the economic system as a whole. This is why economists are unable to engage with the ‘Occupy’ protestors, they suggest – unfairly, as there are lots of economists engaging in that debate, online and outside St Paul’s Cathedral & elsewhere. But we’ll allow the exaggeration for the sake of polemic.
In the days of communism (the good old days?), they argue, understanding comparative economic systems was taught in universities. But now the subject has become disastrously unhistorical, its new graduates unschooled in thinking about the big picture. It is obviously true that economic history has dropped out of the university curriculum, and that this has been an adverse development. One element of the curriculum reform needed now is to restore it. However, this point should not be confused with the separate argument that economics needs to become more ‘heterodox’. For some years now, even before the crisis, there has been a heterodox movement (it used to be called ‘post-autistic’) railing against economic orthodoxy. I always thought these critics underestimated the willingness of mainstream economists to change their methodology – it was one of the reasons I wrote [amazon_link id=”0691143161″ target=”_blank” ]The Soulful Science[/amazon_link]. The orthodox mainstream certainly settles on a mental model – that’s why it’s a mainstream – but that changes with events. Mainstream economists have been hugely interested in behavioural psychology, as noted in this recent post.
So it was cheering in a way to find Robbins making the same point in his 1935 essay:
“The procedure of ‘orthodoxy’ has always been essentially catholic. The attacks, the attempts to exclude, have always come from the other side.” (Chapter 5 Section 4)
Economic analysis, he goes on to say, is intrinsically dependent on empirical evidence which changes all the time as the course of history rolls on. Economic generalisations are bound to be contingent. No doubt the critics will say it’s about time, but the mainstream always has changed and is changing now.
[amazon_image id=”0674057759″ link=”true” target=”_blank” size=”medium” ]Capitalist Revolutionary: John Maynard Keynes[/amazon_image]
Thank you for your remarks on our piece in the New York Times. Our response is that we agree with much of what you say on the evolving mainstream and do not see our piece as an argument for Post Autistic Economics or Heterodoxy. We have written elsewhere that we think that the work of behavioral economics is important. We support good technical work in economic theory, as we had tried to make clear in the op-ed.
What we are trying to say is something quite different. It is that it is also important not to lose sight of the big issues and of the ethical dimensions of economic activity. To use Lionel Robbins’s terminology, because economists are trying to be economic scientists, they tend, especially in teaching, to avoid serious engagement with some of the important ethical issues that need to be faced up to. Surely academic economists too often confine themselves to “Pareto efficiency” when they discuss question of welfare? (We should also note that Robbins believed there was more to economics than what he called, in his famous definition, economic science, and there are obviously prominent economists today who believe this too, but they are a minority.) The work of some behavioral economists does raise ethical questions that extend beyond the neoclassical model, but their work does not remove the need for a return to considering the larger issues, raised in comparative economic systems courses, relating to the type of capitalism we want.
As Robert Teitelman (http://www.thedeal.com/thedealeconomy/backhouse-and-batemans-capitalist-revolutionary-john-maynard-keynes.php) recognizes in his blog, we explain that Keynes encouraged a wide variety of interpretations of his work, including those that developed into the macroeconomic mainstream. But there was more to Keynes than the economic technician. One reason why Keynes is so interesting is that he was both a moral philosopher forming moral judgements about capitalism and a theorist who devised a new theoretical framework with which to analyze its workings. The question is not whether we return to socialism or communism. It is what kind of capitalism we want to have and that is a question that is generally avoided in both the old mainstream and the new.
Thank you for such a thoughtful comment, in which there is nothing I would disagree with. I’m very much looking forward to reading your book!