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Can we please move
on? A note on the Guerrien debate James K. Galbraith (University
of Texas at Austin, USA) © Copyright 2002 James K.
Galbraith Gentlemen, ladies, comrades... Your contributions to the Guerrien debate
have been reflective, even wise occasionally.
But even where points were most deftly made, as they were (to my
taste) by Peter Dorman and by Steve Keen, something about the discussion
troubles me. There is here the flavor
of a certain type of social activist, earnest and dedicated, honorable in
every way, yet so caught up in the problems of the poor that one comes
finally to understand they would be quite lost if poverty were ever made to
disappear. In other words, aren’t we wasting our
time? Isn’t there more important work to do?
In the immortal words of Thorstein Veblen: If we are getting restless under the
taxonomy of a monocotyledonous wage doctrine and a cryptogamic theory of
interest, with involute, loculicidal, tomentous and moniliform variants, what is the
cytoplasm, centrosome, or karyokinetic
process to which we may turn, and, in which we may find surcease from the
metaphysics of normality and controlling principle? Critics of the neoclassical doctrines have
penned, over more than a century, millions of words -- though few as good as
those just cited. But how many have
devoted themselves to new and alternative theory, to an economics that was
not merely a variant or a gloss on neoclassical doctrine? Keynes. Robinson. Schumpeter.
Ayres. Simon. Leontief.
Galbraith père.
Georgescu-Roegen. Sraffa.
Minsky. Davidson. Nelson and Winter, too tentatively. Pasinetti.
Peter Albin. And since then? Yes
I know there are others, including some readers of these very words. But aren’t you tired of embedding your
originalities in critical restatements, however elegant, of what is already
clear to thousands of bright undergraduates on the second day of class? It is time to get on with it. We need a
replacement for neoclassical economics. A new curriculum. Let’s build it. Let me suggest a few key characteristics of
what should follow. 1. The micro/macro distinction should be
abolished. It exists in principle to separate irreconcilable doctrines. The new classicals have recognized this,
and have abolished macro. (As Evelyn Waugh said of Randolph Churchill’s
surgeons, it was a miracle, they found the only part that was not
malignant, and removed it.) We should take the opposite tack: toward a theory
of human behavior based on principles of social interaction. 2. Empirical work should be
privileged. Real science does not
protect bad theory by concentrating on unobservables. It is, rather, a process of interaction
between conjecture and evidence. In
the history of science, new technologies for measurement have often preceded
new ideas. Believe it or not, this
could happen in economics too. 3.
Mathematics should mainly clarify the complex implications of simple
constructs, not obscure simple ideas
behind complex formulae. Dynamical
systems (as Steve Keen rightly insists), fractal geometries, cellular
automata all help us to understand the principles underlying evolutionary
social dynamics. They are also
fascinating. They help students learn to think. Mathematics should lie, in other words, at
the essential core of a new curriculum;
it should not be deployed defensively, as the protective belt. 4.
Our economics should teach the great thinkers, notably Smith, Marx,
Keynes, Veblen and Schumpeter (to restrict myself tactfully to a few of the
honored dead). We need not reinvent
the field; nor should we abandon it. Economics over the sweep of history is
not mainly about scarcity (which technology overcomes) nor about choice (which
is generally neither free nor the defining characteristic of freedom).
Rather, economics is about value, distribution, growth, stabilization, evolution. The great
ideas in these areas, and the history
in which they were embedded, are fundamental.
They should be taught, and not as dogma but rather as a sequence of
explorations.1 5.
Pop constructs derived from neoclassical abstractions (social capital,
natural capital....) are not part of our canon. While they are noteworthy as efforts to
reconcile neoclassical ideas and policy commitments to real social problems,
these constructs also extend, rather than attempt to overcome, the logical
defects of the neoclassical system.
From the standpoint of post-autism, therefore, they represent a dead
end. 6.
Nor should we accept the reconstruction of economics as an amalgam of interest-group
politics. This approach -- popular these days at the American Economic
Association -- has become a way of isolating certain dissenters who cannot
conveniently be suppressed. But the
fact that race, gender, and the environment are important social constructs
does not mean that economics requires a separate branch for the economics of
race, another for the economics of gender, and another for “sustainable
development.” It should instead mean
that the core of what we teach should handle these questions (which relate to
power, discrimination, entropy, and so forth) in a way that is central to the
discipline we espouse. 7.
An economics of modern capitalism should study the actual, existing
features and behavior of our system.
Households, business enterprises of all the types (including some
characterized by diminishing and others by increasing returns, some with
monopoly power and others without), money and credit systems, governments and
their budgets, and the international system are all parts of a nested,
hierarchical structure of rule- and convention- setting institutions, of
interacting and sometimes conflicting sources of power. Their behavior is
characteristically unstable and sometimes violent. To have reduced the subject to shapeless
households, firms and markets, all linked by a uniform conceptual structure
of supply and demand curves (labor market, capital market, goods markets...)
- and in equilibrium! – that was the original neoclassical mistake, already
analyzed by Keynes in the first pages of the General Theory. 8.
Accounting matters. We should
work with and teach from the full spectrum of information sources, not merely
sample surveys (with their obsessive focus on personal characteristics such
as years of schooling) and the national accounts, but also credit, trade,
industrial and financial data. Not to
mention linking economic measurements to other information: political events,
the environment, quality of life, demography,
health. 9.
A focus on social structures and the data that record them requires
new empirical methods. The study of
dispersions, of inequalities, is intrinsic to the study of power. Neoclassical economics with its bias in favor
of the sample survey, the gini coefficient, and the assumption of normality
in the distribution of errors has neglected the mathematics and statistics of
dispersion measures. There are large
gains to be had here, for small investments of effort. Likewise the study of
social structures cannot be done properly with parametric techniques held
hostage to the dogma of hypothesis and test. There is no single formula for
empirical learning. Numerical
taxonomy, discriminant analysis, multidimensional scaling, and many other
techniques are available for studying the phenomena of real economic systems,
and we should learn, use, and teach them.2 10.
Finally, our economics is about problems that need to be solved. There
remain before us the pursuit of full
employment, balanced growth, price stability, development, a sustainable
standard of life. That is why students
once were attracted to our field. That
is why they abandon it now. That is
also why, if we develop a coherent research program, and a teaching curriculum
derived from it, that broadly respect the principles outlined above, we will
prevail in the long run. Notes
1.I thank Pedro Conceição for his characteristic
insightfulness on this point. On Sept. 1, James K. Galbraith became the
Lloyd M. Bentsen, jr. Chair in Government/Business Relations at the
University of Texas at Austin, where he directs the University of Texas
Inequality Project ( ttp://utip.gov.utexas.edu
) He is also a Senior Scholar of the
Levy Economics Institute, and his most recent book, co-edited with Maureen
Berner, is Inequality
and Industrial Change: A Global View (Cambridge, 2001). ___________________________ SUGGESTED CITATION: James K. Galbraith, “Can we please move
on? A note on the Guerrien debate”, post-autistic economics review,
issue no. 15, September 4, 2002, article 2. http://www.paecon.net/PAEReview/issue15/Galbraith15.htm |