The following is the foundation on which the argument is built. The whole post is worth reading from the point of view of heterodoxy successfully confronting orthodoxy.
All heterodox economists agree on one thing, by definition of heterodoxy: orthodox economics contains (huge) errors. INSTEAD of explaining what these errors are and trying to fix them, I would like to stand back from the fray and try to examine what is going on from a distance. WHAT makes certain theories popular? WHY do most people come to believe in theories? WHAT causes changes in these beliefs? By studying the Methodology of Polanyi’s Great Transformation, I came to the understanding that theories can only be understood within their historical context. This understanding is violently in conflict with the conception of knowledge, based on positivist ideas, that I learned in the universities. Contrary to positivist ideas, to understand the process of emergence of theories, and how these theories change over time, one has to do analysis at three levels simultaneously:
LEVEL 1: The Historical Facts, the Context, The Various Groups engaged in the struggle for power, and their interests and ideological positions.
LEVEL 2: The THEORIES which are in use by different groups to analyze the historical experience. It is crucial to understand theories as the lens and framework used by different groups to understand history. Theories prescribe actions to be taken, and groups act to shape history in light of understanding furnished by (often false) theories.
LEVEL 3: Rise and fall of theories as a consequence of the shifting sands of political fortunes of different groups, as well as twists and turns of emergent historical events.…
The naive notion about emergence and adoption of theories can be summarized as:
STANDARD (logical positivist) THEORY OF KNOWLEDGE: A theory will be discarded once it is shown to be false. A theory will be adopted if it can be proven to be true.
On the basis of this positivist idea, we try to prove that dominant theories are false, and offer alternatives which we try to prove true. We think that if we are successful in this attempt, our theories will be accepted. Of all people, heterodox economists should be the first to understand that this theory of knowledge is wrong. They are witness to the long standing dominance and widespread acceptance of theories which are obviously false, and easily demonstrated to be wrong. Thus we need to move to a more sophisticated theory of knowledge. Foucault builds on Marx, and provides a very useful improvement.
POWER/KNOWLEDGE: Theories which are aligned with interests of power become accepted. Moreover, acceptance of these theories actually creates power — power and knowledge are entangled.
Thus, acceptance of neoclassical economics is very beneficial to the interests of the rich and powerful, and that is why it is the dominant theory. Universities serve to indoctrinate a select class to serve the interests of power. Based on this understanding of knowledge, we would not waste time trying to convince those in power of the truth and validity of our theories. Instead, we would appeal to those groups whose interests would be served by the theories we are offering as alternatives. We would focus on the benefits of believing our theories more than on the proof of their validity. The bottom 90%, those who are deeply in debt, those who are powerless, would be the natural target audience, who would listen to our theories because they are aligned with their interests.
I think Polanyi’s analysis of emergence and transformation of structures of knowledge goes further than this, and is more complex. We must understand human knowledge as a social construct — it comes into being because we agree to accept it, and consensus emerges. The agreement can be forced by powers that be using coercion and persuasion in different combinations. Truth is helpful in persuasion, and so it does matter, but it is not the only factor which is relevant. Many readings on the relation between power and knowledge are given on my webpage linked.…Real-World Economics Review Blog
Theories of Knowledge
Asad Zaman | Vice Chancellor, Pakistan Institute of Development Economics and former Director General, International Institute of Islamic Economics, International Islamic University Islamabad
So he is saying people would still think the world is flat if the neo-liberal conspirators wanted it that way?????
ReplyDeleteNeo-liberal conspirators were behind the whole theory that it was good to attach leeches to get out the bad blood????
Most people are not smart enough to figure out who is right, so they believe the "experts" based on who they are told the experts are.
ReplyDeleteWhen explaining MMT, I assume that like me most others often get often get the response, "You mean … is wrong" — said in a tone of disbelief.
ReplyDeleteHow experts and other holders of status and power are selected in a group is a matter sociologists study. C. Wright Mills's The Power Elite is a classic in this field.
Fallacy of authority is one of the most used and one the people falls more easily for.
ReplyDeleteLack of critical thinking of most people is outstanding.
So if we go back and look at it, then Gallileo or wtf actually knew the earth was round but instead of saying it was round right away, he thought it too much to swallow so his initial going in position was "its not flat!... its a slightly convex disc!"?
ReplyDeleteThis crafty incremental approach was more important to getting things turned towards reality than the empirical data he had that it was actually round?
"The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, it should be a big lie, and one should stick to it. They keep up their lies, even at the risk of looking ridiculous."
ReplyDeleteJoseph Goebbels, "Aus Churchills Lügenfabrik" ("Churchill's Lie Factory"), 12 January 1941, Die Zeit ohne Beispiel (Munich: Zentralverlag der NSDAP., 1941), pp. 364-369
Good one Tom!
ReplyDeleteYou pulled the reductio ad nazium!
tough to counter that one!
;)
Tom what big/major technological breakthru was ever not achieved thru empiricism?
ReplyDeleteAnd was instead just debated or whatever?
Air travel: Wright Bros just debated it against the people stating "man cannot fly!" and won and all of a sudden it existed?
The essential economic leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The economists follow the principle that when one lies, it should be a big lie, and one should stick to it. They keep up their lies, even at the risk of looking ridiculous
ReplyDeleteTom what big/major technological breakthru was ever not achieved thru empiricism?
ReplyDeleteWhat has empiricism to do with economics, where deductivism rules?
I've lost count of the number of ways that these people have been shown to be either wrong, or not even wrong, just nonsensical.
Matt there are people who really do still think the world is flat, check my twitter tl out tonight as I originally thought it was a joke. Spent a couple of hours banging my head against the wall with the stupidity.
ReplyDeleteMatt aren't you familiar with the saying: "science advances one funeral at a time" ? It was said by a physicist.
ReplyDeleteEmpiricism wins... eventually. Unless crushing evidence to break the cognitive dissonance, denial is the usual response.
In economics is very hard to come with 'crushing evidence' in most cases due to the many variables at play, hence denial is the usual response.
"Empiricism wins... eventually"
ReplyDeleteUnfortunately that is difficult when the thing you are measuring has been bashed with hammers into the shape of what you are trying to disprove.
It's highly Orwellian, but the approach is to expunge any *empirical* data that suggests the beliefs are incorrect and cover up anything that actually leaks through.
For instance how many central banks refuse to provide last resort liquidity to speculative currency markets? How many force entities through administration that have borrowed in a foreign currency and are unable to obtain it to clear those debts other than by tapping the 'foreign currency reserve' at the central bank?
So we don't know who currency rates respond with those short-killer policies in place.
Empiricism wins... eventually.
ReplyDeleteEven in Cologne, Germany?
Tom wrote: "Most people are not smart enough to figure out who is right, so they believe the "experts" based on who they are told the experts are."
ReplyDeleteandy wrote: "Matt there are people who really do still think the world is flat, check my twitter tl out tonight as I originally thought it was a joke. Spent a couple of hours banging my head against the wall with the stupidity."
I think the flat earthers to be found in surprisingly large numbers on YouTube are the other side of the same coin referred to by Tom. Same probably goes for a lot of the conspiracy theorists.
The clueless fall into two groups: the faithful and the paranoid. The first group puts its faith blindly in authority. The second group distrusts any position that is mainstream.
Sometimes fundamentalist Christianity appears to feed into the second group as well. In the "end days" etc. the world is under a great delusion, "deceiving if it were possible even the very elect" etc. Therefore, whatever the majority thinks must be a delusion. The majority accept that the world is round. Therefore ...
Neil, Bob,
ReplyDeleteI get what you guys say, the problem with economics is that there are no natural laws that govern finance. In other words, as someone famously said: "We make our own reality (now)".
The issue with this, though, is that the economy does not operate on an other universe independent of society. The empirical "insight event" is when social turmoil unstoppable force meets the immovable object of "curve-fitting economicism", then you see things happen.
No one said "eventually" is a short time, it can be years, or decades, even centuries (earth flatteners)... but eventually it happens. And when it happens, it happens fast.
When the heads of the central bankers are on the menu offered by politicians to the angry mobs, the rats will bail the boat. Even in Cologne, Germans are famous for kowtowing to the ruling elite after all, due to their heavy bias towards rule-based society (and those who rule, write the rules).
Even in Cologne, Germany?
ReplyDeleteThe investigation results are not in as far as I know, but the preliminary conclusion seems to be "failure of public order" rather than either an organized attack or even specifically a refugee issue, although some refugees were involved. It also seems that some of the victims may not have been forthright about what happened, too.