Soon after I read Brad DeLong’s post on “The Economist as…?: The Public Square and Economists,” I contacted my long-time friend and collaborator Antonio Callari, who is the Sigmund M. and Mary B. Hyman Professor of Economics at Franklin and Marshall College and an authority on the history of economics. I am pleased to publish his guest post here.
1. If you read Brad DeLong’s reflections on the role of economists in the public square you would be justified in reaching two overriding conclusions. The first is that the “great divide” in the practical and analytical economics of our times is between austerity-imposing Say’s Law theorists on one side and fiscal-stimulus Keynesians on the other. No sign here of a different type of divide—between those who assume the current institutional framework of capitalism and those who would use economic theory (e.g., the general framework of under-consumption as a tendency of capitalism) ) to question this framework and argue that the economic problems of our times require structural reforms foremost. No Marx, no Kalecki—not even a Schumpeter here—just Say and Keynes. But just Say and Keynes seems a rather inadequate couple today, when politics in both Europe and the United States (the very heart of the “market” economy with which DeLong identifies “economics”) has made clear that structural imbalances and inequalities are the heart of the matter.
2. The second, and I think even more remarkable, conclusion of DeLong’s reflection is that the essential disagreements among economists are beyond the grasp of the public. Having laid out the terms of the disagreement between the Keynesian and the austerity sides, DeLong argues that the public does not have the technical expertise to evaluate the sophisticated blend of analytical assumptions and methodological considerations each side uses to support its case. (Regarding the likely resolution of this struggle, DeLong seems to waver between arguing that the process of science is open enough that the austerity side might yet be proven right; and that the austerity side is winning in the court of political opinion only because of the plebeian nature of political discourse, to which he metaphorically refers as a kind of “sewer” of civilization—on which more below). There is, DeLong concludes, a separation between, on the one hand, the economists who “know” (even if they are not quite agreed on what it is they know) and, on the other, the public that cannot “know” and cannot, thus, participate adequately and intelligently in the ongoing conversation on just what it is that we ‘know” and what is to be done. Thus, unable to determine the correct position in economics, DeLong’s public is left as much exposed to and unprotected from the gales of popular sentiments as our ancestors were, before the rise of modernity/science, left to the claims of “philosopher kings” and the gales of imperial (sacred and profane) machinations. DeLong writes that he himself refuses, as should every other economist, this obviously anachronistic role of “philosopher king” in his/their function as “economist/s” (but see #13 below for the limits of this abnegation of a regal prerogative). Unable to participate knowingly and intelligently in the deliberations of their economies, and yet compelled to listen to the economists they cannot understand and judge, the poor people are left in a state of clinical anxiety.
3. All of this DeLong argues in a paper he gave at a Notre Dame conference on public intellectualism, and in response to the organizers’ invitation for him to address the function of the economist as a “public intellectual.” As it turns out, DeLong’s title, “The Economist as … ? The Public Square and Economists,” studiously avoids applying the label “public intellectual” to economists. And, given the substance of his representation of the content of economics, it makes sense for him to avoid that label, certainly if by “public intellectual” one were to mean either: (a) something like the figure of the philosopher king DeLong invokes and dismisses (again, see #13 below for the limits of this role abnegation by DeLong—I will add here that I myself fully agree with DeLong’s desire to dismiss philosopher kings, although I do so not on the grounds he offers, namely that history has shown them to be false prophets, but on the grounds of the strawman quality of the figure: though there have been kings who have imposed philosophies by virtue of being kings, there never has really been a king who became a king by virtue of being a philosopher); or (b) someone who plays a galvanizing role in the production of public knowledge and policy, where “public” means not just “for” the public, the people, but also “of” and “by’”the people. As opposed to the strawman figure of the “philosopher king,” the latter is the only real, sensible meaning the term “public intellectual” could have. Alas, it cannot pass the test of existence in a world where the terms of knowledge and policy are given in and by econometric technicalities the public cannot possibly comprehend (let alone navigate).
4. But is it really the case that economics is reducible to the dance of supply- side versus demand-side economics whose econometric testing is beyond the public’s ability to comprehend? No! In a second, I’ll turn to explain why this “no”—why, that is, economics is not, or certain key analytical parts of it are not, beyond the meaningful grasp of the public; but let me first make explicit the implication that economists can in fact act as “public intellectuals” (in the second, and the only sensible one, of the two sense of that in #3 above). In fact, as I will conclude in #13 below, DeLong is himself acting as a public intellectual in creating/supporting the idea that “the economy” is beyond the reach of the public (not the kind of “economist as public intellectual” that I approve of, true, but a “public intellectual” nonetheless).
5. DeLong’s “history of economics” is long on the idea of markets but short on the idea of power. It’s true he mentions power abundantly: he mentions monopoly power, and he even discusses the way in which power subverts neo-institutionalist utopias of complete markets. These are, no doubt, important elements in framing the limits of the parameters of market-economics. Insofar, however, as they work against the background of an analytical system that imagines and formalizes a market system capable, under ideal conditions, to define efficient (i.e., “power-free”) outcomes, these elements relegate questions of power to the periphery of the analytical core of his economics.
6. But there is another analytical tradition in economics in which questions of power and class are central and not peripheral, a tradition that makes it clear that there is no such thing as a “power-free” market system even at the most abstract level of analysis. This tradition is entirely absent in DeLong’s reflections. It is the tradition that not only Marx but also Veblen created (with their verbal and/or analytical demonstration that “capital” is itself “power”, not a “market-regulated” factor of production), which finds its roots in the analytical core of Adam Smith and David Ricardo, and which more recently found its uncontroverted analytical vindication in the work of Piero Sraffa. In an allusion to its disciplinary longevity, I’ll refer to this tradition as the Smith-Sraffa tradition. It is both an insight and an analytical conclusion of this tradition that a capitalist economy “can” in principle (purely according to market forces) come to find its central tendency at any level of output, and that the particular outcome is fundamentally determined by an exogenous (and primarily politically determined) distributional datum (a position on the wage-profit frontier), with prices (market forces) essentially bending to fit (enable, but not determine) the outcome. This tradition enlarges the set of direct, analytical, concern to economics to include questions of distribution, and of policies directly (administratively and/or politically) effecting distribution (e.g., minimum wage laws, capital controls, accounting and taxing rules for profits and management income, the structure of financial instruments and markets, and so on). In the work of some French economists, the framework for the arrangement of institutional and power levers effecting a particular central tendency or another has been suggestively called an “accumulation regime.”
7. Now, DeLong’s neglect of this Smith-Sraffa tradition leads to certain lapses on his part, not merely in the history of economics he produces (more on this in #12 below), but also in the representations he makes regarding his two take-away points: that (a) the “great divide” in economics is between supply-siders and demand-siders , and (b) the epistemic impotence of the public.
8. With respect to the first point, had DeLong included the Smith-Sraffa tradition in his map of economics, he might have painted (or he might have engaged) a significantly different portrait of the great divide in the economics of our times. To economists in the Smith-Sraffa tradition, the great divide is not so much about the reliability of the sources of aggregate demand (as DeLong’s representation, or Krugman’s for that matter, would have it) as it is about the nature of the forces and sources of supply. By “sources of supply” I do not mean what the modern followers of Say’s Law would have (Say’s Law as originally posed by Say, that is, the one thing I did learn, gratefully, from DeLong’s paper, is that the mature Say had reservations about his earlier formulations). I mean, rather, the forces behind the accumulation of capital, the regime of capitalist accumulation in this age of global capital and of the weakened Welfare State. To economists in the Smith-Sraffa tradition, what is behind the Reinhart-Rogoff school of austerity is a preference of capital for a world free of as many state barriers (qualitative even more than quantitative) as possible. And, in a parallel way, what is behind the DeLong-Krugman camp is a rearguard defense of the logic of the Welfare State against the onslaught of market fundamentalism.
9. Of course, neither DeLong-Krugman on the one side nor Reinhart-Rogoff on the other side see it this way: they do not have the analytical framework with which to see the fundamental political divide between Right and Left as a matter of economic analysis. They frame their analytical disagreements in terms of interest- rate sensitivities and econometric specifications. Now, for sure, these terms carry a certain academic and disciplinary weight of their own. But, failing to get to the heart of the matter (the struggle over the nature of contemporary capitalism), they may not be the most effective terms with which to resolve the theoretical debate one way or the other: neoliberalism or something else? (I hesitate to pin down the alternative to neoliberalism to the orthodox Keynesianism of DeLong, or Krugman, because I do not see how the regime of Welfare State capitalism can be sustained under the current form of globalization.).
10. DeLong seems at somewhat of a loss (as Krugman also seems in his public- sphere pronouncements) to explain why the austerity types seem to be “winning.” He can only explain the good political fortunes of the neoliberal-austerity side by invoking some popular gullibility (the “sewer” analogy he uses to refer to the nature of the popular mind is actually quite disturbing—so, I’m just softening his rhetoric). But might the political weakness of DeLong’s camp, instead of being explained by the analytical and methodological shortcoming of the “audience” (the people and the political leaders they charge with the task of “listening” to them), be perhaps better explained as a result of a certain insufficient “scientificity” on his part, as a result of his failure to include the contours of the Smith-Sraffa tradition into the geography of economics? As I argue below (#11), mapping those contours more completely would allow the public to be called upon, knowingly and appropriately, in a deliberation of the distribution-accumulation regime to be had. And might this greater core involvement of the public in the deliberation of the economics of our day not result in a broader and more powerful support for the criticism of market fundamentalism he and other orthodox Keynesians have been waging from the more limited standpoint of “aggregate demand”?
11. Of course, this brings us directly to DeLong’s downplaying of the public intellectual potential of economists (the second point of #7 above). Had DeLong broadened the content of economics to include the Smith-Sraffa school, he might indeed have found it possible for economists to function as public intellectuals (this, in addition to, and alongside, and not in opposition to, their function in the more limited disciplinary area he addresses). Public intellectuals are people who find ways of making the public an active and knowledgeable participant in understanding key (not necessarily all) parameters of public policy and in the deliberation about and the forging of public policy. In DeLong’s world, the public cannot really participate (and the people are, in fact, in an existential state of epistemic anxiety) because they are confronted with economic and methodological questions (e.g., a threshold level of the rate of interest) they can’t adjudicate, or even grasp. But this is true only if the questions they are confronted with are of such a nature that they haven’t been trained to tackle. The nature of the Smith-Sraffa tradition, however, is such that at least some of its analytical parameters (e.g., again, minimum-wage laws, capital controls, accounting and taxing rules for profits and management income, the structure of financial instruments and markets, and so on) are quite open to intelligent public discussion: their resolution requires not specialized expertise but ideological and moral compasses. Broadening the map of economics to include the Smith-Sraffa tradition might thus have allowed DeLong to create the space for knowledgeable public participation and, hence, for a role for economists as public intellectuals to make it clear in the public square that the people are to be called upon to give the “experts” their marching orders. With public conversations properly framed by the broader analytical perspective the inclusion of the Smith-Sraffa tradition would produce, we would be neither be in the “sewer” of popular passions and ignorance nor in the hands of any philosopher king.
12. In the historiographical part of his essay, DeLong, focusing on “markets” and the mechanisms of supply and demand, produces a history in which humans went on for ages and ages with just “popular” ideas about markets and prices. His view is that “economics” only emerged in the eighteen century and that it did so in response to the rapid pace of technological change emanating from Western Europe at the time. Nothing important to the rise of the “science’ before then. Curiously absent from DeLong’s history are important intellectual thresholds, most notably in late (European) medieval times (e.g., Ibn-Khaldun, Thomas Aquinas) , at which the legal, institutional, and even (and profoundly) cultural foundations were laid out for markets: the general discussions about the nature of property and the embeddedness of prices/incomes in social contexts. It’s not just whole schools of thought (i.e., the Sraffa-Smith tradition) that drop out of DeLong’s purview, but also whole interesting episodes of philosophical and intellectual history that get taken out. This can’t be because DeLong doesn’t know about them: he makes sure we know he reads beyond “economics” (he knows figures I grew up with, Homer and Cicero; figures I know of, Leon Trotsky and Alasdair Macintyre; and figures I frankly don’t know, St. Benedict). So, what is it that makes him, as such a well-read person, neglect the intellectual episodes others (e.g., Schumpeter) found important in the history of economics? A complacent, and problematic, view of the “economist” as “scientist”? A complacent, and problematically orthodox, definition of the core of “economics” as a study of “exchange”?
13. Let me add that, despite his reservations regarding the public intellectual role of economists, DeLong is very much acting as a public intellectual—not a public intellectual on the side of the people, but a public intellectual nonetheless. He is shaping a particular view, namely the view that economics is out of the grasp of ordinary people and needs to be left to the experts. His economics and historiography put the people in a state of participatory impotence and anxiety. In doing this—and ironically, given his statements (see #2 above)—DeLong is, perhaps without realizing it, substituting one type of figure (the economist as a “scientist”) for another (the “philosopher”) to give to the people as a “king.” In doing this—and ironically, given his position against the neoliberal regime of austerity—DeLong is, perhaps without realizing it, weakening the ability of the people to participate, in their resistance to the neoliberal onslaught.
14. There are ways of thinking economics and writing historiographies that are different from DeLong’s reflections on the role of economists as public intellectuals. I think Bernie Sanders was tapping into (some of) the practitioners of these other ways. In these other ways, the public can be in a space not just of anxiety, but of real choices.