An irrationally exuberant decade of postmodern moments

Alex Shaefer, “Chase” (2012)

Our response to the four critics of our Postmodern Moments in Modern Economics book—Suzanne Bergeron, Serap Kayatekin, Deirdre McCloskey, and Evan Watkins—is now available on-line (paywall).

Here are the opening paragraphs:

In the midst of the deepest gloom and the wildest whirlwinds that characterized each new day’s world financial developments in 2008 and the collapse of market after market continuing into 2009, one of our Economics Department colleagues approached us late in the day in a shared hallway. He remarked with the utmost sincerity and congenial candor: ‘‘Hey, you guys,’’ referring to Ruccio and Amariglio, ‘‘should win the Nobel Prize.’’ He went on to say (our paraphrase), ‘‘Your work on uncertainty and the postmodern moments that signify the present inability to corral disorder in the economy predicted these out-of-control events; your book, Postmodern Moments in Modern Economics, has placed you far in the lead among economists in bringing these issues to center stage.’’ Nice words said in tones dulcet and sweet, and certainly music to our ears. But about that Nobel Prize? Yeah, sure!

However, aside from our conjecture that no one in Stockholm connected with giving out prizes or any kudos to individual members of the very large worldwide community of economists and affiliated sidekicks knows that we have been alive in this century, or any past one, it was surprising and then reassuring that our work on the ‘‘postmodern moments’’ of modern economics could be viewed by a sympathetic colleague as a ‘‘contribution’’ to the current contest among competing economic discourses as well as shining a new light on the historical path taken by ‘‘real’’ economic processes and institutions. Indeed, we think that the decade that is now ending since the composition and publication of our book, perhaps uncannily, has highlighted the much-lopsidedness, and also the discursive and practical explosiveness, of the concept and lived existence of uncertainty. It is likely that in no period since the 1930s, and perhaps not since Keynes announced in his 1936 article in the Quarterly Journal of Economics his radical notion of ‘‘fundamental uncertainty,’’ have economists spent as much time trying to contain, reform, blunt, or ignore the ‘‘nihilism’’ of such uncertainty and the postmodern character of (some versions of) the concept of uncertainty and the experience to which it refers.

The crash of 2008-9 and the ‘‘Great Recession,’’ or what we take to be the Second Great Depression of modern capitalism to have occurred worldwide in the past century, was, temporarily at least, a ‘‘cleansing’’ experience for many professional economists in the centers of economic power. At least for a while, the mea culpas (Alan Greenspan, for God’s sake!) may have outdone partisan finger pointing, as hosts of economists and their fellow travelers (would-be forecasters and analysts trained in other fields and conversant with a range of economic ideas and viewpoints) were fairly quick to denounce their own and others’ mainstream—read neoclassical, free market, and/or neoliberal—tendencies that, admittedly, did more to obfuscate and less to illuminate the crisis as it was unfolding. In that intensified period, marked at one pole by the rapid annihilation of some fortunes, and, at a second pole, and more widely, by the increased despair internationally for workers and others without fortunes to lose, articles and blogs appeared nearly every day in which capitalism and its swashbuckling heroes were blamed for their life-threatening excesses, their unconstrained and persistent irrationality the so-called irrational exuberance and for the erection and maintenance of ever-present barriers to regulation and control.

The public bitterness and suspicion that arose over the question of ‘‘bailouts’’ for capitalist firms ‘‘too big to fail’’ soon turned to or on the economics profession itself, and one after another famous economist stepped forward to declare the failure of all but a few in predicting the crash and the events of massive economic disaccumulation and dislocation that soon followed. Stunningly, there were even public acknowledgments that older economic ideas and schools of thought, possibly better equipped for the crisis—both seeing it coming, and knowing what to do once it was here (if not avoiding it)—had long ago been ignored or drummed out of the profession. Both of us were astonished to see, and we communicated with each other about it quite often, a spate of articles, from short, slogan-ridden blurbs to longer diagnoses, that reenergized the theoretical bones of John Maynard Keynes, or even more shockingly, resurrected whole parts and even the main theoretical line of Das Kapital. A new era for Marxism and socialism was being born. Who would have predicted this so soon after Marxism’s putative ‘‘death’’ in the wake of the 1989 revolutions?