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.Must must-read!
We have been much the same thing here and the public is beginning to sense it although they cannot explain it and are being told either than they are delusional or envious, or that there is no alternative.
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.…
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.…
14. There are ways of thinking economics and writing historiographies in ways 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 traditions, the public can be in a space not just of anxiety, but of real choices.
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Economists as public intellectuals
David F. Ruccio | Professor of Economics, University of Notre Dame