The Dismal Science

by GREGORY TRAVIS

At first, I was horrified to learn that Sweden’s Royal Academy of Sciences had gone ahead this year and awarded a prize in Economics. That horror abated some when I learned it had been awarded, for the first time ever, to a woman. And it abated more when I understood that she was a faculty member here at Indiana University, a fact that replaced much of the horror with pride.

But what really turned things for me, what allowed that final sigh of total relief, was the revelation that the prize for Economics hadn’t gone to an economist at all. IU’s Elinor Ostrom is a political scientist.

Why was that important? Because the state of the dismal science is dismal. It’s more than dismal, it’s dreadful. It’s embarrassing.

Half of the discipline’s practitioners think one way. The other half think exactly the opposite. I’m referring, specifically, to the wisdom and guidance being meted out (and, yes, I do mean meted because it sure feels like punishment) with regard to our economic future.

Should we cut government spending or should we increase it? Should we raise taxes or should we lower them? Should we enact trade protections or should we ratify more trade treaties? Bail out our largest and most important industries or let capitalism’s sickle cut them down for a bonfire of creative destruction?

Pick a hundred economists at random and ask them any of those questions. Half will answer one way, the other half the other way.

***

This isn’t funny. It’s not just a manifestation of a healthy dialectic within the profession. It’s not an exposition on the sovereignty of the individual opinion. It’s chaos.

We simply wouldn’t put up with it from any other discipline. If you asked a hundred physicists if an object in motion would stay in motion unless acted upon by a force, half of them wouldn’t say “yes” and the other half “no.”

If you asked a hundred astronomers if, tomorrow, the sun would rotate around the earth or the earth around the sun, half of them wouldn’t give you one answer and the other half the other.

And lest you think I’m demanding too much of a social science by comparing its lack of orthodoxy with that of the hard sciences, think again. Imagine if we asked a room full of, umm, political scientists if consent of the governed was an important characteristic of democracy — and they split down the middle?

We’d be horrified. What’s more, there’d be a movement immediately to disband the political science department on a charge of irrelevancy.

But, for some reason, we’re willing to put up with that in Economics — at least in the present. And I can’t figure out why.

***

I might not be quite so spun up about this if the circumstances weren’t so deadly serious. The nation and the world are deep in what may turn out to be the biggest and worst economic downturn, ever. Forget green sprouts, forget a rally on Wall Street. The economy is still hemorrhaging employment, and it’s doing so in a way that forebodes a patient who might get better, but never gets well.

I’ve got a suggestion, however, to try and get us better out of this mess. It’s a simple exercise in Einstein’s definition of insanity: doing something over and over again in the hopes that it will eventually produce a different outcome.
Luckily for us, the bicameral split in the economics profession cleaves upon historic lines. As for presumptions of what policy initiatives should be undertaken to steer the world out of trouble there are two contradicting answers.

One set would have us turn right, back to the nostrums and shibboleths of the past 30 years. Rightward to Reaganism, deficit-financed tax cuts, trickle down prosperity, a financial sector unshackled from the controls imposed on it the last time it spectacularly melted down and capital free to emigrate away from a labor force that cannot. Laughing all the way to the Laffer Curve.

But that is indeed insanity, as is evident to anyone capable of remembering even the most recent history, a history in which those very same nostrums and shibboleths exploded spectacularly, launching us into the trouble all around us.

The other set would have us turn left, toward an economy jumpstarted by stimulus, enabled by a public sector that stepped into the ring when the private sector had to step out and take a breather. A turn not experimental, but proven by the lessons of World War II, a massive $5 trillion dollar stimulus in which half of the entire economy was dedicated to no more productive act than making things that blew up other things or making things that got blown up by other things.

But the thing is, it worked. Spectacularly. Pulling the nation, and the world, out of the tentacles of the Great Depression and setting the foundation for 50 years of peace and prosperity.

***

I’m not suggesting that we start another world war just to get the machinery of civilization running again. But I am suggesting that we use that example to inform us of what worked when and to give us the courage of our convictions to mount a similar campaign, at least in terms of scale, today.

I’m suggesting that the economists are evenly split on what to do, and that’s depressing. But the split is a real and informative one: half of them are exactly wrong and the other half is exactly right. We just need to understand which half to listen to.

And now you do. Congratulations, again, Dr. Ostrom

GREGORY TRAVIS writes a biweekly column called “CIVITAS” for The Bloomington Alternative, www.BloomingtonAlternative.com, where this article originally appeared. He can be reached at greg@littlebear.com.

 

 

Like What You’ve Read? Support CounterPunch
September 01, 2015
Mike Whitney
Return to Crisis: Things Keep Getting Worse
Michael Schwalbe
The Moral Hazards of Capitalism
Eric Mann
Inside the Civil Rights Movement: a Conversation With Julian Bond
Pam Martens
How Wall Street Parasites Have Devoured Their Hosts, Your Retirement Plan and the U.S. Economy
Jonathan Latham
Growing Doubt: a Scientist’s Experience of GMOs
Fran Shor
Occupy Wall Street and the Sanders Campaign: a Case of Historical Amnesia?
Joe Paff
The Big Trees: Cockburn, Marx and Shostakovich
Randy Blazak
University Administrators Allow Fraternities to Turn Colleges Into Rape Factories
Robert Hunziker
The IPCC Caught in a Pressure Cooker
George Wuerthner
Myths of the Anthropocene Boosters: Truthout’s Misguided Attack on Wilderness and National Park Ideals
Robert Koehler
Sending Your Children Off to Safe Spaces in College
Jesse Jackson
Season of the Insurgents: From Trump to Sanders
August 31, 2015
Michael Hudson
Whitewashing the IMF’s Destructive Role in Greece
Conn Hallinan
Europe’s New Barbarians
Lawrence Ware
George Bush (Still) Doesn’t Care About Black People
Joseph Natoli
Plutocracy, Gentrification and Racial Violence
Franklin Spinney
One Presidential Debate You Won’t Hear: Why It is Time to Adopt a Sensible Grand Strategy
Dave Lindorff
What’s Wrong with Police in America
Louis Proyect
Jacobin and “The War on Syria”
Lawrence Wittner
Militarism Run Amok: How Russians and Americans are Preparing Their Children for War
Binoy Kampmark
Tales of Darkness: Europe’s Refugee Woes
Ralph Nader
Lo, the Poor Enlightened Billionaire!
Peter Koenig
Greece: a New Beginning? A New Hope?
Dean Baker
America Needs an “Idiot-Proof” Retirement System
Vijay Prashad
Why the Iran Deal is Essential
Tom Clifford
The Marco Polo Bridge Incident: a History That Continues to Resonate
Peter Belmont
The Salaita Affair: a Scandal That Never Should Have Happened
Weekend Edition
August 28-30, 2015
Randy Blazak
Donald Trump is the New Face of White Supremacy
Jeffrey St. Clair
Long Time Coming, Long Time Gone
Mike Whitney
Looting Made Easy: the $2 Trillion Buyback Binge
Alan Nasser
The Myth of the Middle Class: Have Most Americans Always Been Poor?
Rob Urie
Wall Street and the Cycle of Crises
Andrew Levine
Viva Trump?
Ismael Hossein-Zadeh
Behind the Congressional Disagreements Over the Iran Nuclear Deal
Lawrence Ware – Marcus T. McCullough
I Won’t Say Amen: Three Black Christian Clichés That Must Go
Evan Jones
Zionism in Britain: a Neglected Chronicle
John Wight
Learning About the Migration Crisis From Ancient Rome
Andre Vltchek
Lebanon – What if it Fell?
Charles Pierson
How the US and the WTO Crushed India’s Subsidies for Solar Energy
Robert Fantina
Hillary Clinton, Palestine and the Long View
Ben Burgis
Gore Vidal Was Right: What Best of Enemies Leaves Out
Suzanne Gordon
How Vets May Suffer From McCain’s Latest Captivity
Robert Sandels - Nelson P. Valdés
The Cuban Adjustment Act: the Other Immigration Mess
Uri Avnery
The Molten Three: Israel’s Aborted Strike on Iran
John Stanton
Israel’s JINSA Earns Return on Investment: 190 Americans Admirals and Generals Oppose Iran Deal