Harvard and the knowledge-effect

Harvard has received quite a battering in recent months.

After the student cheating scandal (and the accompanying investigation scandal), we’ve witnessed the Reinhart-Rogoff error-ridden scandal followed by the Ferguson gay-bashing scandal.

Now, we have the scandal of Jason Richwine’s doctoral dissertation.

All of these scandals involve the production and dissemination of knowledge, and what fascinates me (and a friend with whom I’ve been discussing these issues) is the wide array of arguments that are offered in order to preserve the idea that what happens at Harvard is in fact (to use Louis Althusser’s term) a “knowledge-effect.”

Consider Zack Beauchamp’s investigation of l’affaire Richwine.

First, of course, Richwine’s dissertation on the genetic intellectual inferiority of immigrants from Latin America must have been legitimate knowledge-work because it was done through the Kennedy School at Harvard and we know that’s a “very serious” place, that has produced “outstanding scholars,” with “kind,” knowledgeable professors (like George Borjas, Richard Zeckhauser, and Christopher “Sandy” Jencks) who, of course, are engaged in their own first-rate knowledge-work.

Second, Richwine successfully went through the “normal” steps for achieving a doctoral degree: courses, comps, prospectus defense, dissertation research, and a dissertation defense. And we all know that each of those steps guarantees that knowledge-work is being done and that, in the end, new knowledge has been created.

Third, Richwine used high-quality (for economists, that is) statistical methods, which are considered impeccable, and therefore the work is unassailable in terms of its economic model. It certainly looks like knowledge, because it is produced by a knowledge-producing machine we call statistics and the econometrician says the work was carefully done and that, in itself, suggests the integrity and validity of the work. And, of course, the statistical techniques and economic model are somehow considered independent of the “other stuff”—the race and IQ connections—such that they stand on their own as criteria of knowledge-production.

So, there we have it, all the pieces that make Richwine’s dissertation resemble of piece of knowledge, to display the appropriate knowledge-effect.

And yet. Richwine is now the Heritage Foundation’s former Senior Policy Analyst in Empirical Studies, because it was politically inconvenient to leave him in his post. But Richwine still has his Ph.D. from Harvard.

While the rest of us are left wondering what it is that constitutes the knowledge-effect that serves as the basis of much contemporary work in the social sciences—which, in the name of “good science,” metes out its rewards and punishments to thousands of scholars whose work is measured according to the scholarly standards set by the Harvards of the world; and which determines the fate of millions of Americans through the public policies suggested by the “best and brightest” whose work is taken as knowledge by think tanks and legislators in Washington.

Chart of the day

Corporate lobbying, as Thomas B. Edsall discovers, can be very, very profitable.

For example,

the prescription drug industry spent $116 million lobbying for legislation to prevent Medicare from bargaining down drug prices — legislation that enabled drug companies to make an additional $90 billion annually.That amounts to an extraordinary 77,500 percent return on investment. Oil companies, in turn, had a return on investment of 5,900 percent, and multinational companies, 22,000 percent.

Georges Moustaki RIP

 

Georges Moustaki (né Giuseppe Mustacchi), the French singer and composer, has died at the age of 79.

Here are the lyrics to his “Marche de Sacco e Vannzetti”:

Maintenant Nicolas et Bart
Vous dormez au fond de nos coeurs
Vous étiez tous seuls dans la mort
Mais par elle vous vaincrez!

Cartoon of the day

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Nietzsche’s marginal children?

It’s not often that the work of Friedrich Nietzsche is connected to economics. I have only had the occasion to mention his name three times on this blog (here, here, and here), although Jack Amariglio and I do devote the better of a chapter of Postmodern Moments in Modern Economics, on institutionalist economics, to Nietzsche’s critique of value.

Corey Robin [ht: m] has made another important connection between Nietzsche and economics: the work of Austrian economists such as Friedrich Hayek and Ludwig von Mises. He makes his argument carefully, in the sense that he doesn’t try to establish a direct connection between Nietzsche and the Austrians. The relationship is, instead, one of “elective affinity,” which can be found (to quote from Robin’s own discussion of the article):

in the startling symmetry between Nietzschean and marginal theories of value; in the hostility to labor as the source or measure of value; in the insistence that morals be forged in a crucible of constraint; in the vision of an idle class of taste-makers creating new values and beliefs.

Robin’s argument is provocative, in the best sense of that word—it forces us to think through the relationship between economists’ treatments of value and the other ways value has been constructed and deconstructed in the modern world. In my view, there is in fact a strong affinity between Nietzsche’s “perspectivism” and the radical subjectivism one finds in Austrian treatments of value.

My only major critique of Robin’s argument (I have some minor ones but I’ll leave those aside for now) is that he doesn’t draw a sharp enough distinction between Austrian marginalists and mainstream neoclassical marginalists. That’s important because, while Austrian marginalists may be on the ascendance in recent years (connected, in turn, to the rise of the libertarian Right), they are still mostly outcasts within mainstream economics, which is dominated by neoclassical marginalism.

And the difference? Neoclassical marginalism is founded on the idea of utility-maximizing consumers (along with profit-maximizing producers), leading to equilibrium within and across markets and an efficient allocation of scarce resources for society as a whole. Austrian marginalists, on the other hand, reject the idea that anyone can have the knowledge to make such society-wide calculations. Instead of efficiency, the Austrians focus on the freedom of individuals (especially entrepreneurs) to make decisions based on their local plans and limited knowledges. To put it in a nutshell, while both groups celebrate capitalism, they do so for different reasons: efficiency versus freedom.

My point is simple: not all contemporary marginalism should be considered Nietzsche’s children. Perhaps the Austrians but certainly not the neoclassicals who dominate the discussion of economic theory and policy within mainstream economics and who remain wedded to the kinds of humanism, positivism, and scientism that Nietzsche himself would have found to be the expressions of a slave morality.

Austerity—now or in the future?

Eduardo Porter makes the case against austerity now (when unemployment is high)—but he wants to see austerity in the future (when, presumably, full employment is achieved). In other words, Porter believes we should be Keynesians now and switch to being neoclassicals somewhere down the line.

But there’s a fundamental asymmetry in Porter’s view of austerity: in the Keynesian moments, stimulus comes from a combination of tax cuts and spending increases. But later, in the neoclassical moments, he focuses only on spending cuts.

Fortunately, there is a way to square the circle, if only our political masters could overcome their partisan animus to embrace it. The answer is to combine some stimulus in the present — via tax cuts or more public spending — with transparent, legally binding initiatives to limit spending in the future.

For instance, the administration could propose raising the retirement age a decade down the road. It could also save a lot of money by rejiggering Medicare’s cost-sharing formulas. The higher-income elderly could be made to shoulder a larger share of their health care costs in the future.

Swapping future cuts in Social Security and Medicare for more spending today will not be an easy deal. Liberal Democrats will balk at trimming the social safety net. House Republicans appear immune to any fiscal compromise.

The Obama administration has tried some of this at the margin. It proposed changing the price index used to adjust Social Security benefits, slowing their rise. It has had no success.

But a deal along these lines offers a plausible political path toward an economic policy that is not quite as self-destructive as the one we’ve got. The goal: Keynesian today, when the economy needs it, but not tomorrow.

Well, what happened to tax increases?

Because the Porters of the world take tax increases on wealthy individuals and large corporations off the table, austerity is guaranteed—either now or in the future.

Chart of the day

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Sweden, which has long been the shining example for liberal economists of what we should be aiming for, seems to be losing its luster.

That’s because the growth in Swedish inequality between 1985 and the late 2000s was the largest among all OECD countries, increasing by one third.

Sweden has seen the steepest increase in inequality over 15 years amongst the 34 OECD nations, with disparities rising at four times the pace of the United States, the think tank said.

Once the darling of the political left, heavy state control and wealth distribution through high taxes and generous benefits gave the country’s have-nots an enviable standard of living at the expense of the wealthiest members of society.

Although still one of the most equal countries in the world, the last two decades have seen a marked change. Market reforms have helped the economy become one of Europe’s best performers but this has Swedes wondering if their love affair with state welfare was coming to an end.

The real tipping point came in 2006 when the centre-right government swept to power, bringing an end to a Social Democratic era which stretched for most of the 20th century.

Swedes had grown increasingly weary of their high taxes and with more jobs going overseas, the new government laid out a plan to fine-tune the old welfare system. It slashed income taxes, sold state assets and tried to make it pay to work.

Spending on welfare benefits such as pensions, unemployment and incapacity assistance has fallen by almost a third to 13 percent of GDP from the early nineties, putting Sweden only just above the 11 percent OECD average.

At the other end of the spectrum, tax changes and housing market reforms have made the rich richer.

Since the mid-80s, income from savings, private pensions or rentals, jumped 10 percent for the richest fifth of the population while falling one percent for the poorest 20 percent.

And now, three days of rioting in poor immigrant suburbs have rocked Stockholm.

After decades of practicing the “Swedish model” of generous welfare benefits, Sweden has been reducing the role of the state since the 1990s, spurring the fastest growth in inequality of any advanced OECD economy.

While average living standards are still among the highest in Europe, governments have failed to substantially reduce long-term youth unemployment and poverty, which have affected immigrant communities worst.

The left-leaning tabloid Aftonbladet said the riots represented a “gigantic failure” of government policies, which had underpinned the rise of ghettos in the suburbs.

“We have failed to give many of the people in the suburbs a hope for the future,” Anna-Margrethe Livh of the opposition Left Party wrote in the daily Svenska Dagbladet.

Cartoon of the day

Special mention

 

Chart of the day

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Société Générale expects the unemployment rate in Spain, which currently stands at a record-breaking 27.2 percent, to reach 30 per cent in 2015.

Cartoon of the day

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