I have an American doctorate in mainstream economics. Upon its completion, I confronted that I knew almost nothing. Having acquired a University appointment (dishonestly) on the strength of my orthodox credentials, I immediately joined a group of dissident staff and students seeking wholesale reform of our Departmental economics syllabus. This was the early 1970s.
There then ensued a long civil war, resulting in the ultimate creation of a separate Department of Political Economy at the University of Sydney. My colleagues and I acquired a blissful intellectual freedom inconceivable in a conventional Department of Economics.
If ‘economics’ is defined as based on particular axioms, modes of thought, techniques of research, of necessity there will be breakaway tendencies. The hard fact is, if you want to understand how capitalism (a label shunned in economics) works, you have to turn to other social disciplines for insight.
The history of the economics discipline (sic) over the last 150 years has been the history of attempts to marginalize, vanquish or absorb endless breakaway tendencies. The recent imposition of oppressive quantitative metrics attempting to stratify the ‘quality’ of an academic’s contribution is merely the current stage in a long battle. In this game, the world is a distraction or, at best, a plaything for the imposition of acceptable conceptualizations.
Thus has there been a breakaway tendency in France, of sufficient critical mass to achieve broad public exposure. There have long been breakaway groups operating in the activist sphere (notably Attac), treated as irritants by the establishment. This new dissatisfaction is occurring on academic terrain. A rebel group, the Association Française d’économie politique, set up in 2009, has attracted over 600 well-qualified adherents. Bernard Maris, the columnist assassinated in the Charlie Hebdo massacre, was a member.
Pressure led to the Minister for Higher Education & Research, Geneviève Fioraso, to establish a working group in mid-2013 to confront the criticism. Fioraso appointed as Chair one Pierre-Cyrille Hautcoeur, president of the École des Hautes Études en Sciences Sociales. In spite of the Minister’s directives, the group’s composition did not reflect divergent opinions in the discipline, earning the ire of AFEP.
The situation is particularly piquant in France because of the centralizing (essentially authoritarian) component involved in university appointments, embodied in the Conseil national des universités (CNU). Apparently, for the period 2005-11, of the 120 nominations for economics professors, only 6 were of a minority persuasion.
With the prospect that some government members (not including Fioraso herself) were sympathetic to the complaints of the dissidents, the French economist Jean Tirole has dipped his pen in acid and written to the Minister. Tirole, until recently known only to the cognoscenti, was given the Swedish Central Bank (ersatz Nobel) prize last October. The letter’s existence was publicized by AFP, and reproduced on Marianne, 29 January.
Claims Marianne, the French media accords Tirole the dignity of humility and self-restraint, but the ‘Nobel’ prize appears to have given him a big head. Here is Tirole’s letter to Fioraso.
* * *
Madam the Minister
I have been quite touched by your presence at my side this week at Stockholm. The support that you and your team have given to the Toulouse School of Economics for over two years contributes to the optimism that I feel as to the future of the best centers of research in economics in France and that I’ve seen in the media since 13 October.
Allow me to inform you of my concern a propos an insistent rumor with respect to the creation of a new section of the CNU titled ‘Institutions, economy, locality and society’. If this rumor is confirmed, it will be a catastrophe for the visibility and the future of research in the economic sciences in our country.
As you know, I have always militated for our country to adopt norms for the evaluation of research in force in the rest of the world. In particular, it is important that the community of teachers-researchers and economic researchers operate with a unique standard of scientific evaluation based on a hierarchy of the discipline’s journals and on external review by internationally recognized peers.
It is unthinkable to me that France should recognize two communities at the heart of a single discipline. It is essential that the quality of research should be measured on the basis of publications, compelling each researcher to place oneself before the judgment of peers.
This is the common foundation of scientific progress in all disciplines. To seek to evade such judgment promotes the relativism of knowledge, breeding ground for obscurantism. The self-proclaimed ‘heterodox’ economists must respect this fundamental principle of science. The creation of a new section of the CNU has the effect of removing this group from such discipline.
Besides, the critiques emanating from the sponsors of this project on the lack of inter-disciplinarity, of scientificity and of social usefulness of modern economics are unfounded. (Even if such claims had merit, it should be necessary to demonstrate that a new CNU section will improve things along these lines!)
Modern economic science is open to the grand questions of society, as is perfectly illustrated by the recent works of Thomas Piketty and many other prominent French economists. Numerous researchers amongst the best economists, both French and otherwise, work on the links between economy, psychology, sociology, history, political science, law and geography. Economic science is increasingly inter-disciplinary as is shown, for example, by the creation of the IAST [Institute for Advanced Study] in Toulouse. In particular, my fellow economists and myself, at Paris, Toulouse, Marseille or elsewhere, have long worked on ‘institutions, locality and society’. These subjects are even at the heart of our research. Logically, this new section would include all of us.
Secondly, like the other great scientific disciplines, modern economic science relies on the continuous questioning of its hypotheses, testing its models against the facts, and abandoning theories that fail the test of reality.
Finally, the centers of excellence that have emerged in France over the last three decades train economists who are snatched up by the regulators, international organizations and enterprises, so that they can more readily confront the main technological, economic, social and environmental stakes of the Twenty-First Century. This strong demand is the best demonstration of the social value accorded our discipline.
The fragmentation of the community of French economists by the cloistering of a motley crew in difficulty with internationally recognized norms of evaluation is a very bad response to the failure of this grouping in its effort to legitimize its work within the prominent scientific journals that prevail in our discipline.
If the rumor is true, it seems to me essential to proceed to a re-evaluation (the Hautcoeur Commission has already advised against it, but its opinion has apparently not been followed), this time at the international level, an indisputable condition.
By such means one could, for example, establish a representative body of international award-winning scholars (Nobel Prizes, and drawing from the younger set, [John Bates] Clark medals and Yjro Jahnnson [Yrjö Jahnsson] awards – better economists under 40 and 45 respectively, prizes awarded by US and European associations) to give a verdict on the relative merits of two texts argued and defended: the one pro, the other against the creation of such a section. I am entirely at your disposal to outline the means for such an evaluation.
Madam the Minister, I invite you to accept my sentiments offered with respect.
Jean Tirole
* * *
Laurent Mauduit, previously economic journalist at Le Monde, now fulfils that role at the online journal Mediapart. On 16 October (in English, subscriber only), following the ‘Nobel’ Prize award, Mauduit noted that this latest recipient was representative of the Swedish Central Bank’s narrowness.
“For it was [Tirole] who created, and remains a director, of the Toulouse School of Economics, which represents the spearhead in French academia for liberal and ultra-liberal economic theories.”
Mauduit also expressed concern for Tirole’s priorities in fostering essentially a privatization of his discipline via public/private partnerships in higher education.
“Furthermore, it is he who was among the very first who invited the world of finance to sponsor economic research in France.”
Mauduit quotes from his 2012 book on the issue, Imposteurs de l’économie:
“It was the Institute of Industrial Economics, the Institut d’économie industrielle (Idei) – the forebear of the Toulouse School of Economics – which, at the beginning of the 1990s, acted as the scout, sealing partnership deals with business companies to create and finance a foundation made up of teachers and researchers. … Following suit, numerous French universities in turn created similar structures, benefitting from private capital as well as public financing. Foundations sprang up across the country, with chairs funded by the private sector. But amidst this process of ‘finance-alisation’ of economics teaching, Toulouse always remained several leagues ahead of its rivals.
“The problem is that the process is subterranean and invisible. All the new centres that prospered displayed the ambition of being centres of excellence. All the criteria for validation of this were scrupulously respected, but nevertheless the world of finance had, in a manner of speaking, reached the core of the reactor. …
“Among the outside donors [of the TSE’s governing foundation] figure finance and insurance group AXA, utility giant EDF, Electrabel (a subsidiary of GDF Suez) the public financial institution La Caisse des depots, the BNP Paribas bank, the Crédit Agricole bank, oil company Total, France Télécom and the French Post Office (La Poste).
“The private sector has almost as many seats on the board of governance of the foundation as the founding institutions. Apart from its president Jean Tirole and two other qualified figures, the founding institutions are represented by six board members while the business donators have five seats – representing GDF Suez, France Télécom, Crédit Agricole and BNP Paribas and investment company Exane.
“Thus a large number of the board members governing one of France’s top economic research centres are from the business and finance worlds, and notably private banks. These private partners have also brought private sector practices to the foundation, notably concerning salaries …”
None of these details figure in Tirole’s account of the rigorous process and its institutional pre-requisites by which scientific progress is achieved. Appropriating Jean Baudrillard, The GFC did not take place.
Of particular interest is Tirole’s claim:
“Secondly, like the other great scientific disciplines, modern economic science relies on the continuous questioning of its hypotheses, testing its models against the facts, and abandoning theories that fail the test of reality.”
This claim is a great laugh, because it is manifestly untrue. It is a joke.
On 29 January, AFEP published an open letter to Tirole. It included the following:
“No, Mr Tirole, intellectual diversity is not the source of obscurantism or of relativism, it is the source of innovation and discovery. Science progresses primarily at its margins, by audacious minorities whose merits will often be recognised only well too late. Gauss so feared to present the premises of his non-Euclidean geometry that he waited decades before making them public. Riemann and Helmholtz were abused by Dühring, recipient of prizes awarded by influential majorities, twenty years after Riemann’s fundamental contributions on differential geometry. The geometry of non-linear systems of Poincaré was largely ignored for sixty years until deterministic chaos theory allowed it to return to the scene.
“There is a stake not only scientific but fundamentally democratic: for democracy, including inside the university, rests on government by the majority but also on pluralist institutions guaranteeing that minority voices should be able to express themselves, to explore new voices, to feed the debates and to persuade.”
Tirole’s claims for the nature of the path to understanding are an embarrassment. He appears to know no history of economic thought nor of economic methodology. Ditto the history and philosophy of science.
Also on 29 January, French economist André Orléan published an article in Le Monde, noting (without a touch of irony) that the idea of competition, central to economists’ weltanschauung, should also be applicable to themselves.
Tirole can rest easy, it appears. The push for a separate syllabus has been derailed. And presumably the Toulouse School of Economics remains well insulated from the funding crunch affecting French higher education.
Tirole’s demand for uniformity is unsavoury because intrinsically anti-intellectual. Residing in Toulouse, he should be well aware of the Inquisition and its parlous effects.
Freedom of thought and expression is OK for the mags. But in higher education, there is only the Truth, and we as its guardians will dictate its substance.
Evan Jones is a retired political economist from the University of Sydney. He can be reached at:evan.jones@sydney.edu.au
