FacebookTwitterGoogle+RedditEmail

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.

 

 

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
June 23, 2017
Friday - Sunday
Jeffrey St. Clair
Democrats in the Dead Zone
Gary Leupp
Trump, Qatar and the Danger of Total Confusion
Andrew Levine
The “Democracies” We Deserve
Jeffrey St. Clair - Joshua Frank
The FBI’s “Operation Backfire” and the Case of Briana Waters
Rob Urie
Cannibal Corpse
Joseph G. Ramsey
Savage Calculations: On the Exoneration of Philando Castile’s Killer
John Wight
Trump’s Attack on Cuba
Dave Lindorff
We Need a Mass Movement to Demand Radical Progressive Change
Brian Cloughley
Moving Closer to Doom
David Rosen
The Sex Offender: the 21st Century Witch
John Feffer
All Signs Point to Trump’s Coming War With Iran
Jennifer L. Lieberman
What’s Really New About the Gig Economy?
Pete Dolack
Analyzing the Failures of Syriza
Vijay Prashad
The Russian Nexus
Mike Whitney
Putin Tries to Avoid a Wider War With the US
Gregory Barrett
“Realpolitik” in Berlin: Merkel Fawns Over Kissinger
Louis Yako
The Road to Understanding Syria Goes Through Iraq
Graham Peebles
Grenfell Tower: A Disaster Waiting to Happen
Ezra Rosser
The Poverty State of Mind and the State’s Obligations to the Poor
Ron Jacobs
Andrew Jackson and the American Psyche
Pepe Escobar
Fear and Loathing on the Afghan Silk Road
Andre Vltchek
Why I Reject Western Courts and Justice
Lawrence Davidson
On Hidden Cultural Corruptors
Christopher Brauchli
The Routinization of Mass Shootings in America
Missy Comley Beattie
The Poor Need Not Apply
Martin Billheimer
White Man’s Country and the Iron Room
Joseph Natoli
What to Wonder Now
Tom Clifford
Hong Kong: the Chinese Meant Business
Thomas Knapp
The Castile Doctrine: Cops Without Consequences
Nyla Ali Khan
Borders Versus Memory
Binoy Kampmark
Death on the Road: Memory in Tim Winton’s Shrine
Tony McKenna
The Oily Politics of Unity: Owen Smith as Northern Ireland Shadow Secretary
Nizar Visram
If North Korea Didn’t Exist US Would Create It
John Carroll Md
At St. Catherine’s Hospital, Cite Soleil, Haiti
Kenneth Surin
Brief Impressions of the Singaporean Conjucture
Paul C. Bermanzohn
Trump: the Birth of the Hero
Jill Richardson
Trump on Cuba: If Obama Did It, It’s Bad
Olivia Alperstein
Our President’s Word Wars
REZA FIYOUZAT
Useless Idiots or Useful Collaborators?
Clark T. Scott
Parallel in Significance
Louis Proyect
Hitler and the Lone Wolf Assassin
Julian Vigo
Theresa May Can’t Win for Losing
Richard Klin
Prog Rock: Pomp and Circumstance
Charles R. Larson
Review: Malin Persson Giolito’s “Quicksand”
David Yearsley
RIP: Pomp and Circumstance
FacebookTwitterGoogle+RedditEmail