Encouraging Signs of Polarization…

3 Nov

…as Israel Shahak liked to say. The subject of dispute is the set of shibboleths underlying prevailing macroeconomic theory, as reported in an ultimately disappointing read in the Guardian. Aditya Chakrabortty’s report makes a nice addition to any clipfile on shifting economic thinking in the wake of the 2008 financial crisis, but its account of challenges being levied against macroeconomic orthodoxy is fairly superficial and trite.

The anecdotes he uses to frame the piece are interesting and encouraging to hear. And it’s hard to disagree with some of the general points about (macro)economics suffering from tunnel vision both in method (abstract quantitative modeling, reductively characterizing economic agents as uniformly self-interested rational market participants) and scope (uncritically addressing concerns of capitalist political economy: growth, development, efficiency, inflation, preventative and therapeutic treatments for recession and depression, etc.).

But calling out the twin elite orders of economic authority–ivory tower economists and finance sector alphas–for causing, or at least failing to predict/prevent, the financial crisis without losing so much as their credibility and privileged positions of influence among policy makers…it’s something we all heard vaguely informed 18 year olds (rightly) proclaiming back even before the advent of Occupy.

Which brings me to another of the article’s shortcomings–the conspicuous failure to so much as mention Occupy or its European sister movements (British street protests and Occupy London‘s occupation of government buildings, Spain’s Indignados, Greek Okupas and anarchist community organizing in resistance to austerity, Israel’s tent city “social protests” , etc.). Surely these movements are central to understanding post-crash skepticism toward the reigning economic authorities. One wonders whether this omission was deliberate. Maybe Chakrabortty (or his editor) was afraid that if he dredged up all that he’d remind his audience that the trends in question are hardly recent developments.

My strongest direct objection is to this bit:

In his new book, Never Let a Serious Crisis Go to Waste, the US economist Philip Mirowski recounts how a colleague at his university was asked by students in spring 2009 to talk about the crisis. The world was apparently collapsing around them, and what better forum to discuss this in than a macroeconomics class. The response? “The students were curtly informed that it wasn’t on the syllabus, and there was nothing about it in the assigned textbook, and the instructor therefore did not wish to diverge from the set lesson plan. And he didn’t.”

I don’t think introductory macroeconomics classes have a responsibility to explain and analyze current affairs. It simply isn’t what the class is intended to do, right? There should be (and, at least in the US, often are) other classes offered in economics departments which address such pressing questions in a properly focused context; failing this, a department-sponsored reading group supervised and facilitated by one or more faculty members or whatever. The underlying problem, which Chakrabortty’s article touches on, is that the experts tasked with devising undergraduate economics training tend to deem such endeavors a distraction from imparting high level competence in the quantitative skill sets that employers are looking for.

And since it’s apparently Obvious Day on Camp Stupid, yes: all economics departments should teach Marx. Those that don’t should have their senior faculty publicly flogged with a hardcover copy of Das Kapital. Ideally the flogging should be doled out by the grad students and adjuncts. Their alienated labor under the supervision of blithe tenured mandarins really lends a bitter irony to the latter’s failure to make students read the guy who wrote the fucking book on workplace exploitation.

While we’re on the subject, here are Richard Wolff and David Harvey on Charlie Rose discussing the financial crisis as a crisis of capitalism (7/26/2012); they broach the problem of fatally parochial discursive boundaries in economics departments around the 14:14 mark:

And for anyone interested in exploring serious heterodox approaches to macroeconomic questions, the University of Manchester’s Post-Crash Economics Society’s reading list is a handy resource.
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