Thursday, October 22, 2015

Loomis's rant against economics

Erik Loomis has a post trashing economics, which he says is basically pure ideology.  (The post has attracted more than 200 comments, none of which I've read.  I read the LGM blog only sporadically.  In fact I often end up regretting having gone there at all.)

My two cents on this: Loomis is exaggerating. He's right that economics is not a value-free science, that data is/are not a freestanding avatar of The Truth.  He's right that "free-market fundamentalism" is harmful.  And I agree with him that "we have to find ways to improve the quality of lives of workers in the U.S. and overseas at the same time" (hard to disagree with that).  But to dismiss the entire field of economics as simply capitalist apologetics goes a bit too far.

My father was an economist (in the world outside the academy), and I grew up around economists.  I saw that Western economists in a developing country were people genuinely trying to help, even if in hindsight some of what they were doing might have been misguided.  Intentions don't excuse everything, but in this context they aren't irrelevant either.  Also, economists helped design the New Deal, no doubt a favorite era of Loomis's.  Hasn't he ever heard of Keynes and Keynes's American students and followers?

I took the intro-to-econ course in college and I've never regretted having done that.  I was reading Marx at the same time and it made for an interesting juxtaposition.  I'm not sure the intro-to-econ course taught me much I couldn't have picked up in some other way or that it was essential to reading articles on international political economy, which I had to do then and later, but I don't think it hurt.  It's fine to be skeptical of mainstream economics and keep a critical distance, but Loomis here, as I say, goes a bit too far.  YMMV.


Ronan said...

" I read the LGM blog only sporadically. In fact I often end up regretting having gone there at all"

I used to have this policy aswell. I have to get back to it.

LFC said...

Internet willpower is something i cd work more on myself. But apart from Loomis, who can be maddening/provocative/(sometimes) informative, I don't find anything really pulling me there, at least not on anything like a daily basis. The others are occasionally interesting, but not, to me at any rate, every day. (Specially when I'm behind, as per usual, on a sh*tload of other stuff.) I'm about to put up a short post on the Dem. presidential debate and that will prob. do it for October here.

Peter T said...

Loomis' rant went too far, but there's a strong element of truth in it. There's "economics" as the current leading form of political legitimation, "economics" as ideological justification and "economics" as an academic research program. Trouble is, they all overlap, Still, it's pretty clear that, at least in in its present form, the last is a failed program - the elaboration of interesting ideas on a decidedly weak foundation.

LFC said...

I guess I would tend to agree, though I don't follow academic 'mainstream' economics at all; yet it's also interesting to note that, in terms of its influence on other disciplines and its place in the academy, mainstream economics has been a 'success'. Admittedly that says nothing about its substantive merits or real-world effects.

There are also differences among mainstream economists. I don't like Ben Bernanke's views on a variety of matters or his general worldview, but the fact that he had studied the Great Depression was probably a good thing in terms of his realizing, albeit not anticipating, the seriousness of the '08 crisis and the need to do something, even if that something was mostly bailing out Wall St. The alternative was for the Fed etc. to do nothing, which probably wd have been worse. Unless one thinks an apocalyptic collapse of global capitalism wd have cleared the way for a whole new social order... which I'll leave to others to debate.

hank_F_M said...


Economics is such a dismal Art and Science. Wishful thinking would be so much more fun. : -)

Certainly there are problems with the discipline, but does anything else provide a better alternative for understanding some of the basic functions of society?

LFC said...

does anything else provide a better alternative for understanding some of the basic functions of society?

Hank: Well, I suppose entire libraries, in a way, have been written around that question. I think 'mainstream' economics, descended from what Marx called bourgeois political economy by way of the marginalist "revolution," is open to criticism on various grounds. Obviously the answer of a Thomas Sowell or a Tyler Cowen (whose blog that I virtually never read is called, not coincidentally, Marginal Revolution) to your question would be a resounding "yes," but there have been and are critical voices within economists' own ranks. And obvs. outside them as well. Plus, as I tried to suggest, there are diff. strains within mainstream economics itself, and some strains are probably more useful in understanding the "real world" than other strains. These days I can't say I read much economics or criticism thereof, so I suppose I shd leave it at that.

LFC said...

Sorry, I meant to say the answer of Sowell or Cowen would be a resounding no, i.e., "No, nothing else provides a better alternative."

LFC said...

It also occurs to me that I'm not sure what you mean here by "some of the basic functions of society." My best guess is that you're thinking of the allocation of scarce resources as the particular "function" of "society" that economics focuses on: that is indeed a textbook definition of economics. But I don't think the phrase "functions of society" is in many economists' vocabulary today; it would fit more into the vocabulary of a functionalist sociologist.

hank_F_M said...


I was thinking a little more broadly. Wasn't Marx an economist? He might join in a "no" while objecting to the theories of Sowell and others. The LGM article took a rather broad swipe.

LFC said...

We're getting into some tricky territory here.

I suppose that on a broad definition of economist, Marx was an economist among other things. He obviously wrote a lot about economic matters. He steeped himself in the literature -- for instance, knew and was definitely influenced by a classical economist like Ricardo. But Marx saw himself as engaged in a critique of the dominant economic thinking of the day, whose basic terms of reference he either rejected or turned inside out. Marx was at the same time a philosopher; much of his formal academic training was in philosophy, he was one of the 'young Hegelians,' and the Hegelian influence remained throughout even though Marx rejected Hegel's philosophical 'idealism'.

One reason this is murky territory is that economics as a separate academic discipline was only, I think, just coming into existence toward the end of Marx's life. "Political economy" before that was not a separate discipline cordoned off from social thought in the general sense or moral philosophy. I think the term 'economics' is first used by Stanley Jevons in the 1870s -- don't quote me on that, b/c I'm not taking the time to look it up. But I ran across a funny (as in humorous) take on the relevant passage in Jevons a long time ago. I'll try to dig it up sometime and maybe post it in this thread.

Anyway, to come to back to the original thing, if you meant the comment in a broad way, I guess we more-or-less are in agreement.

Btw, I recently found at a used bookstore an unmarked hardcover copy of Jonathan Sperber's Karl Marx: A Nineteenth-Century Life (2013). I'm planning to read it, as opposed to just flipping through it. It's long, but appears to be very readable.

LFC said...

Looking through Sperber, before actually reading it, I think his chap. on Marx's economic theory is somewhat weak. But it'll be a while before I can get around to elaborating in a post.

JS said...

Well, it's a bit mad, isn't it? Leave aside Marx---Amartya Sen and Ken Arrow are/were most certainly economists, and they couldn't have done the (very important) work that they did if they hadn't been. (Even, from what little I know/understand of it, Krugman's work on economic geography seems quite interesting/worthwhile.) Now, I guess I don't know whether Arrow or Sen fall into the "mainstream economists" category, but "Economics = Ideology" seems like classic Loomis hyperbole-turned-into-idiocy. (You could give some sense to that equation if you were a traditional Marxist, otherwise I think it's a bit difficult.)

LFC said...

thanks, points well-taken.

Amartya Sen and Ken Arrow are/were most certainly economists, and they couldn't have done the (very important) work that they did if they hadn't been. (Even, from what little I know/understand of it, Krugman's work on economic geography seems quite interesting/worthwhile.)

I think that's right. Sen's work I know largely at second-hand and I wasn't aware of Krugman's on economic geography unless you are using that to designate some of his work on trade (?) -- I s'pose I shd look it up. Know even less in detail about Arrow's work (I'm aware of his famous theorem but not much of the substance); embarrassing in a way since I've met Arrow, on one occasion a long time ago. If you're interested in the details of that [and they're not that exciting], js., feel free to ask me by e-mail b.c. I don't want to go into it here; my email address is available through clicking the 'profile' box (i.e. "about lfc") on the blog's right sidebar.

JS said...

LFC -- Yes, I meant Krugman's work on trade, the thing that won him the Nobel (or the "Nobel"). I don't know it either, but I've read one old paper of his that wasn't very technical, and it seemed interesting.