It is often said that knowledge is power. One implication of this is that the powerful have an incentive to police what gets called knowledge. Nowhere is this truer than in economics since how we describe the economy has vital consequences for economic policy, providing a clear motive to police the production of economic knowledge. Unmasking this reality is critical for a democratic equal opportunity society. However, it is extremely difficult to do.
The policing of knowledge is often done through professions, and unmasking the process is difficult for two reasons. First, the very idea that knowledge might be policed in the interests of the rich and powerful creates a cognitive dissonance since we like to think of knowledge in terms of truth. Second, to the extent that professions serve a bona fide quality control function, it is easy to camouflage policing as quality control.
One function of professions is to oversee and ensure the quality of services that members provide. However, professions also work to bolster the social and economic standing of their members, and this private economic interest creates a permanent tension with their role as guardians of quality. It is easy to justify supply restrictions (such as licensing) in the name of professional standards and quality, when the real reason is to drive up pay. Likewise, technical professional discourse can suffer from the same tensions. On one hand it is needed to articulate specialized ideas and concepts, but on the other hand it excludes the public. Put bluntly, private language is a barrier to entry that confers ownership of the secrets of the temple, and it is not for nothing that professions have been described as a conspiracy against the laity.
The pursuit of self-interest by professions is unsurprising, being normal economic behavior. Economists are also professionals. Ironically, that means the economic logic of economists applies as much to themselves as it does to other professionals. The difficulty with acknowledging this is that it creates a huge dissonance with the rhetoric of academic economics, which is cast in terms of pursuit of “scientific truth.” The reality is that the practices and rules governing economic enquiry may also be partly about promoting self-interest. As with other professions, this can take the form of licensing requirements and private languages that restrictively shape discourse.
Such self-interest provides a point of entry for spotlighting far more important concerns about the role of social forces in the production of economic knowledge. Economic research is a job, and who pays the bills has an impact on the research produced. An economist working at the Federal Reserve or International Monetary Fund (IMF) will tend to produce research and advice consistent with the political and ideological alignment of those institutions. This is the route to promotion and an easier life, and institutions also tend to select economists who share their alignment. That is just a complicated way of saying that employers affect what workers produce. The only thing surprising about this is that it applies to the production of economic knowledge.
Economists are also members of society. That means they too are affected by trends and influences in society, just like everyone else. When society drifts left, economists drift left too. When society drifts right, so too do economists. Nothing surprising here except that it has consequences for economic knowledge. In the decade after the Great Depression, society drifted left and the economics profession became more progressive. The late 1940s inaugurated the Cold War, which pitted the ideology of central planning against free market capitalism, and American economists began to drift right in the wake of this struggle. Again, nothing surprising once it is recognized that economists are also members of society.
All knowledge is produced in a social context of politics, values, institutions and employment relations. This context exerts important influences on the knowledge that is produced, and this social context also influences economics. Once again, nothing surprising – unless one subscribes to the science myth in economics, in which case it is hard to reconcile these social impacts with the idea of true objective knowledge.
To become accepted, knowledge claims are subject to screening processes that warrant these claims. Tests of passage include logical coherence of the ideas and compatibility with selected facts. They also usually include a requirement that ideas are presented using the appropriate professional language, and have some degree of conformity with the political values and ideology of the professional community. Values are therefore part of the screen for warranting ideas as knowledge.
Sociologists term this screening process “gatekeeping” – which is the professional sociologist’s way of saying policing. This gatekeeping process varies with political and social climate. In some eras gatekeeping may be more open, in others more closed. Like all knowledge, economic knowledge is also screened and subject to gatekeeping. However, gatekeeping in economics is stricter than in comparative literature. It is easy to understand why. Wealth, income, and power are at stake in the former, since how we explain the economy affects law and policy governing markets.
Interestingly, the gatekeepers may not even be aware of their gatekeeping activities if they share the values embedded in the dominant knowledge paradigm. Here, the “science myth” can prove especially useful. This is because it can provide the gatekeepers with a justification for their activities that is constructed in terms of error and truth. Consequently, they can use the notion of “truth” to advance one point of view and suppress another.
This is not a conspiracy theory. It is simply the consequence of the fact that people produce knowledge, and people live and work in social contexts defined by values, institutions, and power relations. At one level, all of this is obvious. At another level, it is very disconcerting because it challenges widely held beliefs about the relation between knowledge and truth.
The important practical lesson is that we should be open-eyed about conventional economic knowledge claims, and open-minded about economic ideas that the gatekeepers have consigned to the underground. That has relevance for debate surrounding such issues as the economic impact of minimum wages, the employment effects of trade unions, the determination of income distribution, the consequences of job off-shoring, and the existence of a natural rate of unemployment.
Beyond that there is a serious problem because policing of university economics has become so one-sided that only one view is admitted. Consequently, it is as if we have two economic policy waiters – in the U.S. they are the Republicans and so-called “new” Democrats – but only one chef. What we need is another chef in the economic policy kitchen, working from another economic cookbook and producing another economic policy menu.
I spent some time on this issue of the philosophy of economics and its epistemic status over at Mark Thoma’s blog a few weeks ago. One of the most basic points is that it is important to understand the difference in the degree and kinds of objectivity that can be claimed for natural-scientific theories and social theories. Not only do social theories refer to an historical reality that is far less invariant and thus far less susceptible to general and immutable lawfulness, but social theories are needed precisely insofar as the consequences of the practices and activities of social agents generate structures that constrain them, structures that , in turn, interact with and become entangled in each other, further feeding back their constaints upon social agents beyond the horizon of their ordinary understanding and experience. Hence, not only does economic theory, as a kind of social theory, originate from social practices and activities of a certain kind or aspect, but it relates reflexively to those domains of social action and ultimately serves to inform and alter them. Two main points follow from this: 1) that it is impossible to cleanly separate out normative from “positive” considerations in economic theory, to the same degree that is possible in natural science; and 2) that, though there is a really effective quasi-systematic implicature that constitutes the “object domain” of economic theory, that theory is a part of that implicature and can not entirely step out of it to view it as a whole, but rather always occupies a perpsective within it. This is not to say that there is not a kind of objectivity that economic theory concerns itself with, nor that there are not differences between degrees of objectivity. The further implication then is that the conditions of application of economic models and methods always need to be considered in assessing their usefulness or validity and that no total systematization of an economic theory is possible, for, if it were, it would by the same token, be inapplicable. Finally, whatever the empirical assessment or measurement of the current state of an economic system may be, itself a dubious or uncertain matter, there would be several functionally equivalent alternate states of the system that would be prospectively possible, such that any policy proposal for intervention or nonintervention in the workings of that economic system would bear ethico-political as well as epistemic criteria, even as it seeks to reflexively inform such considerations.
The upshot is that economic theory does not have the sort of “hard” objectivity that is often attributed to it and, further, that it usually deploys a narrow and rather fantstical conception of social agency, tailored to its own narrow preoccupations, that lends to its claims an overly assertoric air, as if it were entirely “justified” in its “positive” claims, that obfuscates the normative import of its implications. A good example would be a recent article by Edward Prescott of RBC fame, noted by Thoma among others, that displays such tendencies in all their absurdity.
Palley’s article and the Halasz comment address issues of “objectivity” and [at least by implication] “rationality” that are often only peripheral rather than the central focus of discussion.
I continue to advocate greater attention to the work of Stephen Toulmin in this respect. His work, Human Understanding [1972], stated with eloquence and nuance the case for considering both the “discplinary” and “professional” problems that scientists – and specifically natural scientists – confront. He stated the issues in terms that are very similar to those used by Thomas Palley. Not long ago, in Return to Reason, Toulmin elaborated his thought for the social sciences including economics. His portrayal of the classic “epistemic portrait” shares a kindred spirit with John Halasz’ comments about the hazy boundary line between the “detached observer” and an “economic system” which is at least partially created by that same “observer” as a “participant”.
I think it’s more important that ‘professionals’ are forced to engage, explain, and defend their ideas with the ‘unprofessionals’, rather than the the untrained actually iniating the dialogue.
The fact is, professionals, even though they are the annoying gatekeepers, do deserve that role and help keep the pool of knowledge clean from intellectual confusion.
But they shouldn’t be immune, and they should be forced to teach and defend in order to maintain their position at the gatekeeper. They should be arming their foes so that when they are weak and weary they have to step down.
If they can’t do that, then they probably don’t deserve to be there.
I think it’s more important that ‘professionals’ are forced to engage, explain, and defend their ideas with the ‘unprofessionals’, rather than the untrained actually initiating the dialogue.
The fact is, professionals, even though they are the annoying gatekeepers, do deserve that role and by having it help keep the pool of knowledge clean from intellectual confusion.
But they shouldn’t be immune to enquiry, and they should be forced to teach and defend in order to maintain their position at the gates. They should be constantly arming the unlearned so that when they are weak and weary they have to step down and can be properly replaced.
If they can’t or won’t do that, then they probably don’t deserve to be the gatekeepers.
I fail to see where Tom is leading this point. I agree with his point on “policing” as a phenomenon, but the real problem is not that Republicans and “new Democrats” (whoever they are) keep the gates at our universities. It has been thoroughly proven by Dan Klein (GMU) and others in similar studies that the overwhelming majority of college professors – even in economics – are solidly leftist.
The problem is not political. It is methodological. It is ironic that the radical leftists, once they conquer faculty positions, assume the same old, mostly useless empirical methods of standardized economics. Instead of developing real methods for real problems, they dig themselves into the old marginalist and econometric trenches. While econometrics has its use in limited areas, it is basically useless on real world problems that our legislators are dealing with. An excellent example is the solution to our social security problem: the time horizon is 50-75 years, a time span that is an eon of uncertainty in the econometric context.
This all goes back to Keynes’s principle of uncertainty, which is a far more useful tool in economic analysis than most (though of course not all) quantitative methods.
Academic gatekeepers do their best to keep people out who do not strictly adhere to the quantitative gospel. There is your gatekeeper/policing problem. Absurdly enough, the emphasis on more or less useless methods also prevents the leftists themselves from actually putting their theory to interesting work.
Tom’s points about intellectual policing are important. I just wish he would direct his search light a little more to the left.
Economists do keep their data from the general public, often out of no good reason (at least by other science standard).
See my article “Inflation and Transparency” for an illustration:
http://www.eurotrib.com/story/2006/11/20/143350/23
The analogy we should be thinking of is the weather. We understand the physics of heat, moisture, etc., but that is no help in deducing the “laws of weather.” Halasz’s comment “the consequences of the practices and activities of social agents generate structures that constrain them, structures that , in turn, interact with and become entangled in each other, further feeding back their constaints upon social agents” sounds a lot like fluid dynamics to me, and it suggests that economics is not so much cursed with a “science myth” as with an outdated Newtonian paridigm.
I understand the author’s reluctance to be tagged as a conspiracy theorist, but let’s face it–there is a conspiracy of the rich and powerful versus the rest of us. It is pervasive but subtle. It is probably useless to rant and rave about it, but if we are not to be complicit in it, we must be honest about it.
j :
I just lost a longer reply with a single errant key-stroke. So, shorter version: the analogy with turbulent thermodynamics and complex physical systems vis-a-vis unpredictability is apt. Except that economics concerns the production and distribution of material surpluses, which is negentropic and does not dictate any reversion to low-energy dispersion. Human agents can always defect from structural constraints, though never without “costs”, and some of those defections might effect improvements in the production and distribution of surpluses. Human beings further variably can endure losses, i.e. suffer, and moderate and secure gains. Which makes the effort to understand, rather than predict,- since their very agency renders prediction all the more impossible,- the social and natural constraints that they are under worthwhile. Faillible human beings and infaillible markets is, indeed, the very stuff of theology. (Such notions also contradict the very argument for markets as information aggregating and processing mechanisms, which implicate the finite human impossibility of fulling knowing inputs and outcomes). But muddling on through under conditions of distributed uncertainty is still possible. Which is otherwise known as politics, the “conspiracy” of the collective good against itself.
Too much intellectualization here is counterproductive IMHO. “Negentropy” (I had to look that one up!) is only local, a temporary bubble of order in an entropic universe. We are dumb agents in a “weather system” of incentives that ultimately are ruled by entropic principles. Production expends energy to increase order, and consumption consumes it–turning products to waste.
It’s my belief (I have no special knowledge here) that complexity and simplicity have a fractal distribution in the world–they both exist everywhere you look. Complexity is contained by larger constraints (technology, the laws of physics, human limitations) which create simplicity that makes the world comprehensible. This is why it has been my experience that all new theories about human societies inevitably lead you back to what people have been telling their children for thousands of years. Trudge thru the complexity, and wind up with simplicity again in the end–yet the simplicity is never completely simple.
The dysfunction in our economic and political system is not hard to understand. Agents milk the system for their own good at the expense of others. Hardly a new idea. I believe that an economic and political system should be thought of as a computation system running a search algorithm to find more efficient methods for supporting human life. It is a distributed, massively parallel system–a “swarm intelligence.” We need to know more about the algorithms used by the agents (evolutionary psychology) and what types of systems interact constructively with those agent’s algorithms. In other words, which social systems bring out the best in us, and create a whole that is greater than the sum of its parts? To do this we need to take a hard look at human weaknesses, something our flattering, fawning media is loath to do, and experiment with social systems that “patch” them.
[…] Economic ideas have a profound influence on real world outcomes, which means powerful social interests will seek to control what gets accepted as knowledge. Furthermore, economists are themselves members of society and will therefore be influenced by what currently passes as knowledge. On top of that economists are motivated by their own economic self-interest, which means they are willing to produce knowledge that their customers want. – be they investment banks, business think-tanks, or the IMF and World Bank. Moreover, since cognitive dissonance makes it hard to produce knowledge you do not believe in, that willingness to produce easily merges into belief. Consequently, for all of these reasons, economists can be quite comfortable producing knowledge that supports the economic interests of the rich and powerful (see The Knowledge Police in Economics). […]