[PEN-L:11385] Re: Re: NC economics

[James Devine <jdevine@xxxxxxxxxxxxxxx>]

Wojtek writes: >... That is quite surprising for a discipline that for the
most part does just that -- manufacturing evidence to support a theory
treated as given, and I do not know what the explanation is. ... Similarly,
if one in the business of cooking up evidence to support a theory a priori
assumed as true, one does not use a method of which it can be demonstrated
that it does that.  Or another explanation is interdisciplinary
animosities: since factor is used predominantly by, pardon my French,
sociologists, no respectable economist would touch it even with a ten-foot
pole.<

I think you're missing what NC economists do. Most of these economists do
not think of themselves as being whores (or whatever) and most do not act
that way, simply "cooking up evidence to support a theory a priori assumed
as true." The basic theoretical framework -- the paradigm -- is never
tested, especially since most or all of it is untestable.  Rather, it's
simply assumed to be true (as you say). Then, most are honest testers of
hypotheses _within_ this (essentially corrupt) paradigm. The dishonesty is
more structural or sociological than personal. (The economist's typical
disdain for sociology suggests to me that the profession doesn't know or
care about what statistical techniques sociologists use and so can't eschew
them.)

As I've said before, a lot of NC econometrics is okay as long as we
remember that they are skating on the surface of capitalist reality.
Estimating the relationship between the unemployment rate and the inflation
rate may involve all sorts of ideology (what kind of unemployment and
inflation is really important, etc.), but the results can be revealing. The
NC economist may interpret the results as reflecting simply supply & demand
(inflation occurs because of excess demand) while the results _really_
reflect the fact that capitalists punish us with inflation when the reserve
army gets "too small" to ensure that workers work hard enough and restrain
wage demands enough to preserve an "adequate" profit rate. Even though the
NC theory is wrong (IMHO), the actual specification of the econometric
equation isn't that far off, so if the NC economist finds that below a
certain threshold rate of (officially-measured) unemployment the inflation
rate tends to leap upward, we cannot reject the results out of hand. (That
threshold seems to have fallen lately, due to intensified competition,
deunionization, etc., but that doesn't mean that we can reject the idea of
a threshold altogether.)

>... NC as well a host of other disciplines that developed primarily in the
US -- such as behavioral psychology -- belong to the same paradigm, let's
call "master-race science" ... that relies on a differemnt than classical
definition of truth. As you know, the classical definition of truth or its
modern derivatives defines truth as "thought" corresponding to "reality."
The master-race science, by contrast, defines truth as the capability of
producting desired result through manipulation. ...<

Ironically, the above description applies better to the "liberal"
economists (using the US definition of liberalism) than it does to (the
official self-image of) Chicago-style economics. It's the liberals who used
to advertise government policy as allowing very specific results, via
manipulation of the economy. (They've lost self confidence, but such policy
economics still occurs.)

I agree that there's a lot of similarity between NCism and behaviorist
"psychology," but there's a difference too. For the NC, consumer "tastes"
(or preferences) are given and not subject to analysis. But unlike the
behaviorist, the NC embraces an image of the consumer as the prime mover in
the economy (an image arising with Adam Smith). If consumers change their
tastes, the market responds. Further, though most economists outside of the
University of Chicago would agree that markets do not in fact work as
perfectly as advertised, "consumer sovereignty" is a major _ideal_. They
want to fix the system so that the consumer is monarch.

Frankly, consumer sovereignty is not that bad as an ideal, though I would
unite it with worker sovereignty (and other aspects of a democratic economy).

>... it does not take a rocket scientist figure out that if a person's
behavior is viewed mainly as utility-maximising given an opprtunity
structure,  then maniupulating the opportunity structure by those equipped
to do so (i.e. corporate or gevernment types) will produce the desirable
behvior in "subjects" (this time without 'experimental').<

You're right. That's what economic policy-making is about (raising interest
rates fights inflation by changing the "opportunity structure," etc.)

But it's important to remember _why_ this attitude is perverse. It's
because the NC manipulators take the existing power structure for granted
and/or as "natural." Capitalism, patriarchy, racial dominance are often
seen as outside the analysis or are trivialized (usually as merely
referring to markets for capitalism and as attitudes for the latter two).
Some sort of revision of the unemployment insurance law is proposed,
ignoring the fact that capitalism requires a reserve army to preserve
profits. So the "reform" ends up having results that are perverse for
workers but can be very pleasant to capitalists. You can think up examples
of this for yourself.

Some sort of policy economics will be needed, however, if we ever get
socialism, a democratic political economy. In this system, policy
initiatives would be subject to democratic discipline. (Some economists
think they already are, poor benighted souls.)

Also, it's important to remember that policy economics can be useful even
within the system. A lot of labor economists used their theory and
empirical work to oppose the recent Gingrich/Clinton welfare "reform." This
is the kind of thing that EPI does, as Max would no doubt point out.

Because the entire system does not simply respond to the needs of capital,
patriarchy, and white hegemony, there are some pockets of resistance, so
that there is some material basis for the use of some NC tools for
counter-hegemonic purposes. (The AFL-CIO, for example, isn't 100% corrupt,
since it has to maintain _some_ basis in the working class outside of craft
unions. It, I am sure, provides some of EPI's funding.) It's true that much
of this research is ideologically limited (e.g., trying to talk to capital
about its long-term interests being poorly served by Gingrichite madness,
as if the capitalist elite cares). But the fact that the system does not
fit the Frankfurt-school image of totalitarian capitalism means that there
can be some validity to some NC research.

We have to pick and choose, treating each item of research critically.
(Actually, the same should be said for Marxian research, since some of
_that_ is total dreck.)


in pen-l solidarity,

Jim Devine   jdevine@xxxxxxxxxxxxxxx
jim_devine@xxxxxxxxxxxxxx
Econ. Dept., Loyola Marymount Univ.
7900 Loyola Blvd., Los Angeles, CA 90045-8410 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"Segui il tuo corso, e lascia dir le genti." (Go your own way
and let people talk.) -- K. Marx, paraphrasing Dante A.