by From Lars Syll When politically “radical” economists like Krugman, Wren-Lewis or Stiglitz confront the critique of mainstream economics from people like me, they usually have the attitude that if the critique isn’t formulated in a well-specified mathematical model it isn’t worth taking seriously. To me that only shows that, despite all their radical rhetoric, these economists – just like Milton Friedman, Robert Lucas Jr or Greg Mankiw – are nothing but die-hard defenders of mainstream economics. The only economic analysis acceptable to these people is the one that takes place within the analytic-formalistic modelling strategy that makes up the core of mainstream economics. Models and theories that do not live up to the precepts of the mainstream methodological canon are considered
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Lars Pålsson Syll writes Cutting-edge macroeconomics …
from Lars Syll
When politically “radical” economists like Krugman, Wren-Lewis or Stiglitz confront the critique of mainstream economics from people like me, they usually have the attitude that if the critique isn’t formulated in a well-specified mathematical model it isn’t worth taking seriously. To me that only shows that, despite all their radical rhetoric, these economists – just like Milton Friedman, Robert Lucas Jr or Greg Mankiw – are nothing but die-hard defenders of mainstream economics. The only economic analysis acceptable to these people is the one that takes place within the analytic-formalistic modelling strategy that makes up the core of mainstream economics. Models and theories that do not live up to the precepts of the mainstream methodological canon are considered “cheap talk”. If you do not follow this particular mathematical-deductive analytical formalism you’re not even considered to be doing economics.
So, even though we, as you formulate it, can identify many “diverse parts” of modern mainstream economics, the “degree of commonality identified” comes from the non-negotiable demand that the proliferation of models has to take place as a kind of axiomatic variation within the standard neoclassical model. But to me, and I guess most other heterodox economists, no matter how many thousands of “technical working papers” or models mainstream economists come up with, as long as they are just “wildly inconsistent” axiomatic variations of the same old mathematical-deductive ilk, they will not take us one single inch closer to giving us relevant and usable means to further our understanding and explanation of real economies.
The kind of “diversity” you asked me about, is perhaps even better to get a perspective on, by considering someone like Dani Rodrik, who a couple of years ago wrote a book on economics and its modelling strategies – Economics Rules (2015) – that attracted much attention among economists in the academic world. Just like Krugman and the other politically “radical” mainstream economists, Rodrik shares the view that there is nothing basically wrong with standard theory. As long as policymakers and economists stick to standard economic analysis everything is fine. Economics is just a method that makes us “think straight” and “reach correct answers”. Similar to Krugman, Rodrik likes to present himself as a kind of pluralist anti-establishment economics iconoclast, but when it really counts, he shows what he is – a mainstream economist fanatically defending the relevance of standard economic modelling strategies. In other words – no heterodoxy where it would really count. In my view, this isn’t pluralism. It’s a methodological reductionist strait-jacket.
To me this also shows – to answer another part of your question – that the relationship between political/ideological views of economists and theory are not of the one-to-one kind. Leon Walras was a socialist. Knut Wicksell a social democrat. Paul Krugman is a political “radical”. But that’s not the point. A lot of my economics teachers at university in the 1970s and 1980s were Left party members, but they still preached neoclassical general equilibrium theory as if it were a gospel that had to be learned without question. To me, the political affiliations of these people were totally uninteresting. I am sure most of them had, as you put it, “good intentions” and looked upon themselves as “scholars”. But I fiercely criticized them then – as I do now – not because of their political/ideological views, but because they taught irrelevant mathematical-formalist theories and models that had nothing to do with real-life. The ideology that I, as an economist focusing on science-theoretical and philosophical aspects of economics, am interested in is not of a political kind, but rather of a methodological kind. And that ideology is pervasive in economics!