The Economism Frame at Work: The “Assault” on Texas Higher Education

Paul Burka wrote the cover story for the October issue of Texas Monthly, “The Battle over UT” (http://www.texasmonthly.com/preview/2012-10-01/feature, subscription required for full article). I’m sure this veteran political writer (or so I gather) thought that he was presenting a reasonably balanced account of Gov. Rick Perry, Jeff Sandefer and his Texas Public Policy Foundation, and the conservative assault on Texas’s flagship universities, University of Texas and Texas A&M. In actuality the article is highly biased, and in seeing why, we understand how “frames” work in political discussion.

Linguist George Lakoff explained frames in books such as Moral Politics. In framing a political statement, we may think we’re using neutral language, but may in actuality be adopting language that adheres to the key assumptions of one side of the debate. That means that anyone who wishes to argue the other side starts off at a disadvantage, because the debate has already been laid out in terms favorable to the other side—terms that make it sound like the other side is sensible and its critics are muddle-headed. If, for example, we frame the debate over immigration policy as, “Are you in favor of upholding the law of the land, or do you endorse amnesty?” then we’re doing the sort of framing that Lakoff objects to.

Burka’s article is shot through with the economism frame. He accepts as unassailable the assumptions that:

·         A college degree is a commodity

·         The goal of college is to “buy” a degree and then use it to get a good job

·         What you learn in college can be precisely quantified by standardized tests

·         It makes sense to argue that a college should be run as if it were a business

Defenders of higher education’s role in a democratic society by creating an educated, critically thinking populace automatically sound old-fashioned and out of touch as soon as you adopt this frame. Philosopher Martha Nussbaum, for example, in her valuable book, Not for Profit: Why Democracy Needs the Humanities, obviously has nothing worthwhile to say according to the economism formula.

Perhaps the worst example of one-sided framing comes at the end of this long article when Burka seems to accept the notion that the old-fashioned university faculty types represent an elitist view of higher education while Sandefer and his gang, who want to hold down tuition and make more on-line learning available, are the populists in this contest. Thomas Frank, in his One Market Under God (which I discuss at length in The Golden Calf), shrewdly dissects economism’s claim that it represents populism and true democracy via the marketplace, since in the free market, the consumer can purchase whatever she wants. By contrast, any form of government regulation is elitism, with other people telling you what to do. Yeah, right, says Frank, the US corporation is a wonderful example of democracy—Bill Gates assures us that we’ll have the widest possible choice of operating systems for our computers and we can pick whichever one we want. And if Bill Gates’s employees didn’t like the way he was running Microsoft, they could take a vote and get rid of him.

If you want to know the real scoop about what’s elitist and what’s populist in the American university, read Christopher Newfield’s essential book, Unmaking the Public University. His thesis would seem to be a wild conspiracy theory if he had not documented and supported it so thoroughly. On his view, in the late 1960s, the elite, wealthy white males that were used to running America the way they saw fit got into a snit. Women and minorities were increasingly rising to positions of power in an expanded and highly educated middle class. The skittish one-percenters looked around at where these people were coming from, and discovered the source of the problem—the large public university. So they decided that two things had to happen if they were to remain in control. First, the university had to be robbed of its essential funding. Second, equally important, the university as a source of knowledge had to be delegitimated in the eyes of the populace. Newfield makes a good case that the entire assault on affirmative action in the 1990s (for instance) was a part of this delegitimation process.

Burka admits that he’s personally biased because he’s a part-timer at UT-Austin, teaching one course a year on politics for low pay and no benefits and outside the tenure system. He’s the sort of faculty member that would be the only employee of UT if Sandefer had his way. Burka talks movingly about how faculty like him usually have something many tenured professors lack—real-world experience. That is supposedly the reason why Sandefer wants to hire so many of them. The fact that such profs are for the most part cheap and docile labor couldn’t possibly be the real reason conservatives love them so much. (My own personal bias is the opposite of course since in my day job, I’m a tenured professor teaching humanities in a professional school.)

The final bit of evidence that Burka has totally swallowed the economism frame is what he proposes to do about the future of the university. Suppose that you agreed with all the following:

·         The large public university is a huge public good, producing both education for the masses and essential research.

·         In today’s world the university, like everything else, is increasing expensive to maintain.

·         Raising tuition to pay for the increased costs adds unacceptable levels of debt to young people just starting their careers, and excludes many others from even getting a degree.

Now, if you agreed on all those things, a logical conclusion would be that we have to belly up to the bar and pay for a public good with more public money—that is, taxes. That would be logical unless you’d adopted the economism frame, where raising taxes is taboo. So the possibility that the real problem in Texas, despite its relatively booming economy, is inadequate public funding for its schools (K-12 even worse than higher ed) gets completely left out of Burka’s discussion.

Am I a defender of the status quo? I believe that universities need to do more to cut costs while retaining quality, must address the tuition problem more aggressively, and that faculty need to be more accountable for how they spend the taxpayer money entrusted to them. But we need open-minded discussions of how to do all that—not warmed-over economism.

Who's Entitled?

The Democrats are like a dog with a bone, with Romney's secretly-videotaped speech in which he labeled 47 percent of the American public as non-tax-paying moochers who think they're entitled. As I said previously, this speech is fair game as it comes straight out of the economism playbook, and Romney has made it clear all through this campaign that economism is in fact his religion. (Okay, so maybe he's a Mormon on the side.) But let's for now take a somewhat closer look at this question of just who in our society think they're "entitled."

Academics (those troublemakers again) have recently done several studies about the ethics of the rich vs. regular folks. Here is a blog post based on just one such study:
http://hcrenewal.blogspot.com/2012/07/quantitating-corruption-of-finance.html

What these studies find, routinely, is that wealthier research subjects generally are more likely to cheat, and feel more entitled to get ahead, so that any means they need to use to get ahead is all right with them. Yet when we talk in our society, for example, about "entitlement programs," we always seem to talk about programs that aid the poor and middle class; we never seem to treat the wealthy (the cherished "job creators" of the Republicans) as "entitled" folks. These recent research results simply add more evidence of a pervasive double standard, fueled by the ideology of economism, that the rich are different and better than the rest of us.

Now, when I say something like this, I am likely to get the response, why am I picking on the rich? Do I believe that all rich people are rotten? Do I believe that all poor people are angelic?

Well, I happen to believe that some rich people and good and some are bad. I happen to believe that some poor people are virtuous and hard-working and some are bastards. I imagine that most of us, if we thought about it, would believe the same. So why is it even necessary to go through the motions of saying such an obvious truism?

The reason one has to say such things is that economism has had its way with us for so long that its defenders have had an incredibly easy time of it. The rest of us drank the Kool-aid and agreed that what economism preaches is simple common sense and must be true. So they got lazy about thinking of arguments that actually support economism in any substantial way. (That's just as well for their peace of mind, as economism is so full of contradictions, and so thoroughly undermined by real-world evidence, that trying to seriously defend it is a real headache.) So all it takes is a person like me questioning a single feature of the economism's religious ideology, and the defenders go berserk, figuring that anyone so crazy as to doubt economism must be trying to destroy civilization as they know it.

The good news is that finally us crazies are coming out of the woodwork.

The Truth about CEOs

NBC News brought us up to date yesterday about a university study of CEO pay:
http://bottomline.nbcnews.com/_news/2012/09/27/14125675-lavish-ceo-pay-doesnt-work-as-intended-study?lite

Basically what these folks from the University of Delaware found is:

• If you assume that you have to pay a company CEO huge megabucks because other companies pay their CEOs those sums, your company will not perform any better and is probably wasting its money.
• If you want your CEO to do well, pick somebody who actually has experience in the business you're in. Don't hire a successful CEO from a totally different type of company.

Now, if we lived in a sensible world, these observations would produce the usual response when we read about an academic study: "Everyone already knew that anyway so why did these silly professors have to get a grant to study this?" But we don't live in a sensible world. We live in a world where economism has somehow morphed itself into everyday common sense, and so we do need to learn these lessons.

Why are the lessons of economism at odds with these very sensible findings--and how have those beliefs led to out-of-sight CEO pay and the creation of an overclass of the wealthy to whom all other Americans so willingly defer? First, as I explained in The Golden Calf, economism has repackaged old religious beliefs that go toward imagining that if you're rich, you must be especially favored by God. So it's simply God's will that you'll be showered with riches and that the rest of us should kiss the hem of your whatever.

The more subtle answer is that economism is joined at the hip with the most simplistic form of neoclassical economics, which in turn believes that everything of importance in the world can be predicted by means of its mathematical models. These models are basically the doctrine of the supposedly free market. This worship of neoclassical economics and its presumed mathematical precision (a precision purchased at the cost of grossly misrepresenting the real world) leads to the impression that it's possible to be an expert in the free market, and to have a sort of financial wisdom that transcends any specific industry. On this basis, people readily imagine that if you managed to make a ton of money as CEO of a widget company, you can become president of a hospital system and be equally successful (at making money at least, even if none of the patients get any healthier).

Let's for a minute apply this to Mitt Romney. He's running for president on the platform that he, much better than that idiot Obama who never "met a paycheck" as they like to intone, knows how to get the American economy moving forward again. And how does he know this? Presumably because he was successful, in terms at least of personal wealth accumulation, as an executive of a certain sort of firm, a venture capital company.

Again, let's assume for a minute we lived in a sensible world. In that world people would note two things. First, being president of the U.S. is quite different from running a business, and there's no reason whatever to believe that somebody skilled at one would be skilled at the other. Second, what Romney proved to be good at was doing one very specific form of financial dealing--which actually amounts to leveraging huge amounts of debt and then forcing others to pay off that debt for you, as Matt Taibbi explained for us in detail in the August 29 issue of Rolling Stone (subscription required).

Maybe some day we will live in a sensible world again.

Romney’s 47 Percent—Right Out of the Economism Scripture

            I was about to write a comment about the now-infamous video of Mitt Romney speaking in Boca Raton, FL about the 47 percent of Americans whom he’d write off in the election, but Paul Krugman sort of beat me to it in his New York Times economic column:

http://www.nytimes.com/2012/09/21/opinion/krugman-disdain-for-workers.html?partner=rssnyt&emc=rss&_moc.semityn.www

            Has Krugman read The Golden Calf? I know he has a copy, since like most aspiring authors, I sent copies to several important figures whom I had quoted in the book, hoping that some of them would see fit to give the book a little notice (dream on, as it turned out). But I have no idea whether he has actually looked at it. In any event, he was writing things before that book appeared that anticipated many of the messages in it, and since the book has appeared his columns seem to channel ideas in the book even more.

            The gist of this latest column is that today’s Republicans have a deep and serious disdain for ordinary working people, so it’s not in the least out of character for Romney to say what he did. If you work for someone else, by definition, you’re not one of the “job creators” that the Republicans idolize. Forget that those capitalists and investors would never have a dime if the working stiffs of America weren’t the world’s most productive workers, and hadn’t slaved away so that those guys could be rich while seeing their own income stagnate ever since 1980.

            What I had been about to add to that observation was that what Romney was captured saying in Boca Raton was vintage economism—so again, it’s not as if he was misquoted or that they caught him on a bad day. The creed of economism allows people like Romney an easy conscience when casting aspersions against so many of their fellow citizens.

            Using its two religious roots, the Protestant ethic and English evangelicalism, economism has concluded that where anyone is in the economic pecking order is exactly where they ought to be, for two reasons. The first reason is overtly religious. Both of the above religious doctrines held that God designed the world down to the last feather on the last sparrow. If the people who fall into the tax categories that Romney poo-pooed happen to be those who generally make less than $50,000 per year, and by the merest coincidence, Republican donors had to pay $50,000 a plate to attend the dinner in Boca Raton where Romney spoke, well, no reason at all for the donors to feel embarrassed. God made them rich because they were especially worthy, and he made the others poor because they were especially sinful.

            That’s the first reason. The second reason is that economism believes devoutly in neoclassical economics, which in turn teaches that everything about the economy can be exactly predicted by its neat mathematical models. Those models show that so long as you have a free market, then whatever happens in the world is the best possible thing that could have happened. If the market is free and the 1 percent are fabulously wealthy and the rest of us are miserable, then that outcome is the best possible way that the world could be organized. The only fly in the ointment is what happens if the market is not, in fact, ideally free. But that’s a minor change of the subject, as the devotee of economism then goes into a rant that the entire problem is due to the market not being free enough, and that hated government regulation is what is messing everything up.

            So the Republican donors can take their pick. They can all have an easy conscience because it’s God’s will. Or they can all have an easy conscience because precise mathematical laws prove that the world is ideal the way it is. Or for that matter they can believe in both. After all, they paid fifty grand for a place at the table—might as well throw in an extra ideology as a bonus.

So Why No Jobs?

A number of reports on the US economy agree that in recent months, companies have been sitting on huge wads of cash. They have not, for the most part, used any of that cash to expand their workforce. Nevertheless profits are up, because existing workers are more productive than ever before—this coming on top of figures I noted in The Golden Calf, that American workers already were leading the rest of the world in productivity.

Economism teaches us that if we just lower taxes on the rich and on corporations, they will be the “job creators.” So why no jobs, if they are so flush with funds?

The students of economism offer us an answer. The problem, they allege, is uncertainty. Right now these companies have money, but who knows about tomorrow—maybe those nasty Democrats will raise taxes again, or enforce some new regulations. It’s not enough that the job creators have a lot of money; they have to be in the right frame of mind. This excuse as to why we don’t have jobs, when all the conditions seem to be just what economism ordered, is what economist and columnist Paul Krugman memorably labeled the “Mom, he’s looking at me funny” rationale.

So, says the political right wing, if you want jobs, it is not enough to put wads of cash in the hands of employers. You also have to ease their uncertainty that anyone could ever take that cash away from them. So be sure to elect Republicans to control both the White House and Congress, and then to appoint only pro-business, activist judges. And while you’re at it, dismantle American electoral democracy to be sure that the guys never get voted out of office (something economism believes but doesn’t like to say out loud).

It is part of the brainwashing job that economism’s acolytes have pulled off on American society that all this can be said with a straight face. So let me see if I can state the rather obvious flaw in this reasoning, even if no one in the political debate in the U.S. seems willing to go there.

Economism claims that the unregulated free market is this powerful force for good in society, and that if we just let it alone, it will do everything we desire. Everyone will be prosperous, except of course for those who don’t deserve to be, because obviously they didn’t work hard enough or didn’t have the right entrepreneurial moxie. Or God doesn’t like them.

Then when we line up all the ducks in a row the way economism says, and there are still no jobs, we are supposed to believe that the problem is uncertainty and lack of confidence. Somehow this incredibly powerful free market thing is so weak and unreliable that it will fall apart if it sees its own shadow.

So you can have a (so-called) free market that grandly sweeps all before it. Or you can have a free market that’s so wimpy and undependable that you have to make really nice to it to get it to do what you want. One way or the other, guys—make up your minds.

Republican Worship of Hayek’s The Road to Serfdom: Part 4. The Mystery Economist Revealed

    Note: This is Part 4 of a four-part discussion that makes the most sense when read in order. For the other three parts see:
http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to.html
http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to_9.html
http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to_8330.html       


 Okay, let’s recap. In Part 2 of our discussion of Hayek I summarized the main ideas that Hayek proposed and that have won him such a following among today’s defenders of economism. Then, in Part 3, I compared Hayek with the Mystery Economist who was writing at just about the same time, the mid-1940s. That Mystery Economist, by contrast, turned out to be no friend of the major beliefs that make up today’s economism faith. The Mystery Economist, in short, seems to be hardly the sort of person that Ronald Reagan, Glenn Beck, Paul Ryan, or other supporters of economism could possibly agree with. So by now you’re probably tired of this game and want to know just who the Mystery Economist is.

            Drum roll, please. The Mystery Economist is—Friedrich Hayek.

            That’s right. Every idea that I have attributed to the Mystery Economist comes straight out of The Road to Serfdom.

            Bruce Caldwell, the editor of Hayek’s collected works, writes of The Road to Serfdom, “Hayek’s book may have been widely, but it was not always carefully, read.” (2) One has to wonder, if Glenn Beck and Ronald Reagan and others have worshipped Hayek as the originator of today’s economism, how carefully they actually read his book.

            A confirming comment on this aspect of Hayek’s thinking is provided by somebody you might have guessed was the Mystery Economist, because he was probably the most prominent English economist of that time—John Maynard Keynes. Keynes is the economist most usually associated with the New Deal in the U.S. and the welfare state in Britain—developments that today’s economism advocates view with horror. So it is interesting to see what Keynes had to say about Hayek’s book.

            As Caldwell summarizes (23-24):

[Keynes] delighted Hayek when he wrote him that [The Road to Serfdom] was “a grand book” and that “morally and philosophically I find myself in agreement with virtually the whole of it; and not only in agreement with it, but in a deeply moved agreement.” Keynes went on to say, though, that “You admit here and there that it is a question of knowing where to draw the line. You agree that the line has to be drawn somewhere, and that the logical extreme is not possible. But you give us no guidance whatever as to where to draw it.”

Keynes, it appears, found much in Hayek’s book to agree with. Keynes was declaring himself to be no fan of Nazi or communist central planning. But Keynes at the same time nailed Hayek on the book’s main deficiency. Keynes realized that Hayek could not have it both ways. The Hayek of economism rigidly claims that if we stray a single step from the path of market competition, we will bring about totalitarianism. Yet the same Hayek, now in the guise of the Mystery Economist, very reasonably advocates a robust role for government alongside private enterprise and market competition.

Keynes asks Hayek—just where do you propose to draw the line? Where does appropriate government regulation and supplementation of the market, to make up for the market’s inherent limitations, leave off? Just where does the inevitable slide to totalitarianism begin? Keynes could find no answer to this key question when he read The Road to Serfdom. Nor can we.

Hayek, as it turns out, is only a partial author of today’s economism. He was, by today’s standards, far too reasonable. Advocates for economism today accordingly find it necessary to deny those reasonable things that Hayek wrote, about the non-existence of completely unregulated markets and about the limited power of the market to achieve social welfare. In doing so, they continue to praise Hayek’s book as if it agreed completely with their revised program, which shows (as we’ll come back to many times) how economism is long on religious fervor and short on respect for facts.

Sources

F.A. Hayek, The Road to Serfdom: Text and Documents: The Definitive Edition, ed. Bruce Campbell (Chicago: University of Chicago Press, 2007).

Here are the page sources in Hayek for all the quotations attributed to the Mystery Economist in Part 3:

 “Where, for example, it is impracticable”: 87

“In no system that could be rationally defended”: 88

Providing a decent minimum of food, clothing and shelter: 86-7, 147, 215

Regulating working hours: 86-87

Requiring workplaces to be reasonably safe: 86-87

Limiting the concentration of wealth due to inheritance: 134

Government should be involved only insofar as market competition fails: 87

Government social programs should promise every citizen: 147, 215

“Nor is the preservation of competition incompatible”: 87

Too great a concentration of corporate power: 205

Republican Worship of Hayek’s The Road to Serfdom: Part 3. Hayek vs. the Mystery Economist

Note: This is the 3rd part of a four-part commentary that makes the most sense when read in order. For the first two parts see:
http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to.html
http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to_9.html

           Let’s stick with our friend Hayek and his book, The Road to Serfdom. It turns out that quite a different program was proposed by an economist at just about the same that Hayek was publishing his book in 1944. The contrasts between this alternative program and my summary of Hayek’s views in Part 2 are striking and suggestive. I’m going to have a little fun with this alternative author and call him the Mystery Economist for now, and invite you to guess his identity. (No fair peeking ahead to Part 4 where all will be revealed.)

The Mystery Economist’s Program

One way to approach the Mystery Economist’s program is to contrast it with a list of things that true believers in economism tend to accept without question:

• “The best outcome for society” is synonymous with “the end result of free market exchanges.” To live in a world governed by an unregulated free market is to live in Utopia.
• Markets are self-regulating. The best thing government can do for the market is simply to get out of the way.
• Any social problem can be solved through market principles; government intervention is never called for.
• If a corporation grows so large that it can control markets, that is simply the way the market (and God) wanted it to be.

The Mystery Economist, it turns out, disagreed with each of these statements. Let’s see how and why.

            Markets define social good. The Mystery Economist attacks this idea head-on:

Where, for example, it is impracticable to make the enjoyment of certain services dependent on the payment of a price, competition will not produce the services; and the price system becomes similarly ineffective when the damage caused to others by certain uses of property cannot be effectively charged to the owner of that property. In all these instances there is a divergence between the items which enter into private calculation and those which affect social welfare; and, whenever this divergence becomes important, some method other than competition may have to be found to supply the services in question.

The Mystery Economist is saying that there are certain things that are important for society that simply won’t emerge from market competition, since no individual can manage to produce those things in a way that yields a satisfactory profit. Economism states that those things are simply not wanted or needed. But the Mystery Economist disagrees. He claims that “items which enter into private calculation” (that is, what figures in the marketplace) and “social welfare” may be two different things. By making this simple statement he pulls the rug out from under one of economism’s main tenets.

            The Mystery Economist goes on to provide examples of what he has in mind. He does not think that private-enterprise competition will get most roads built or prevent the worst sorts of pollution.

            Self-regulating markets. The Mystery Economist is quite consistent in rejecting the notion that marketplace forces actually can manage the market. He refers repeatedly to the intricate system of legal regulations that is needed for markets to be able to function, and that these laws must come from outside and cannot be generated through market activity itself. He also offered the observation that in his own time, many of these laws were poorly developed: “In no system that could be rationally defended would the state just do nothing. An effective competition system needs an intelligently designed and continuously adjusted legal framework as much as any other. Even the most essential prerequisite of its proper functioning, the prevention of fraud and deception (including exploitation of ignorance), provides a great and by no means yet fully accomplished object of legislative activity.”

In short, the Mystery Economist thinks that economism’s “unregulated free market” is an illusion. Markets, he argues, simply won’t work without a heavy dose of government regulation.

            Government’s role in solving social problems. Besides building roads and avoiding pollution, the Mystery Economist lists a number of functions that he assigns to good government because he believes that market competition alone will never achieve the desired results:

• Providing a decent minimum of food, clothing and shelter for everyone in society
• Regulating working hours
• Requiring workplaces to be reasonably safe and sanitary
• Limiting the concentration of wealth due to inheritance

You might imagine by now that the Mystery Economist is a raving socialist, but he’s careful to deny this charge. He always hedges his recommendations for government action with the proviso that government should be involved only insofar as market competition fails; as soon as a market mechanism is available to reach the desired social goals, the government should back off. For instance, he is quite careful to stipulate government social programs should promise every citizen the security of a decent minimum of the necessities of life, but should never promise prosperity or any given level of wealth. He nevertheless insists, “Nor is the preservation of competition incompatible with an extensive system of social services—so long as the organization of these services is not designed in such a way as to make competition ineffective over wide fields.”

            Opposing monopolies. Traditionally, economics has viewed a monopoly as a threat to the free market. The Mystery Economist agrees and is especially forceful in denouncing monopolies, since he thinks they are the entering edge of the wedge that will start the slide down the slope to central planning. But he thinks that the prime force behind the creation of economies in the first place comes not from government but from the capitalists who own the corporations, and fears that they will use their political pull to hijack government power toward maintaining their monopoly status. In short, the Mystery Economist is very suspicious (along with his predecessor, Adam Smith, if you actually read what he wrote) of too great a concentration of corporate power in a few hands.

            As you can see, the Mystery Economist seems to be no fan of much of what today’s defenders of economism like to think. So who is this masked man? We’ll find out in Part 4 of this discussion:

http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to_6229.html.

Sources

For the source of all the direct quotes above for the Mystery Economist, see Part 4.

Republican Worship of Hayek’s The Road to Serfdom: Part 2. What Hayek Stood For

Note: This is the second part of a 4-part commentary that makes the most sense when read in sequence--for the first part see:
http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to.html

In my earlier post (Part 1) I talked about Hayek’s time in history when he wrote this book in 1944, and how issues that seemed alive and vital then have significantly faded today—a point widely ignored by Hayek’s adoring fans in the world of economism.

Ignoring the historical background of Hayek’s work is not the only thing that those who worship at his altar today are guilty of ignoring. In this and later posts I’ll take apart just what Hayek actually seems to have stood for—and whether it bears any resemblance to today’s economism belief system. I’ll begin by reviewing the position that Hayek advocated.

            As one widely worshipped as a high priest, if not the patron saint, of economism, Hayek is somewhat disappointing as a source of descriptions of what the ideal society envisioned by economism would look like. Hayek was quite convinced that democratic people of his day, particularly Americans and English, had two choices—either maintain steadfastly a society run according to market-competition principles, or else sink into totalitarianism. He did not, therefore, have to argue for his version of economism by telling us in detail about the wonderful world it would create; he simply had to warn us of how terrible the alternative, totalitarian world would be.  Indeed, even if the world that resulted from his vision turned out to be not so great, it could hardly be worse than Hitler’s Germany or Stalin’s Russia. And in fact much of The Road to Serfdom is taken up with the grim description of the evils of totalitarianism.

            Of the things that Hayek did include about his own positive vision, he naturally stressed the central role of freedom. Since he thought that totalitarianism and collectivism went hand in hand, he saw individualism as the opposite of collectivism. To him individualism meant above all the freedom of persons to decide how to live their own lives. This freedom led, he thought, to a “sense of power over their own fate, the belief in the unbounded possibilities of improving their own lot…” (70).

            Hayek’s view of European history was that this sense of individual freedom became prominent in the early years of the nineteenth century, and resulted in a rise in living standards that surpassed anything previously known in human history. As Hayek saw it, even though he admitted that the story contained some “dark spots” (70), this rise in living standards was quite evenly distributed throughout society. Economic plenty and individual freedom were flip sides of the same coin: “a free growth of economic activity,” Hayek postulated, was “the undesigned and unforeseen by-product of political freedom” (69). (Many historians, reviewing the effects that the Industrial Revolution had on the laboring classes in its early decades, would say that the “dark spots” were dark indeed and much more widespread than what Hayek lets on, but for now let’s not quibble with his account.)

            Individual freedom has two other important implications from Hayek’s standpoint. Individualism, he insists, does not mean that “man is egoistic or selfish or ought to be.” (102) The point rather is that (going back to his stark choices as to how to run a society) either people are free to choose what they value most in life, or else some central planning authority tries to do it for them. The latter way, for all the reasons Hayek has listed, will spell disaster; so the only sound way to manage society is to allow maximal freedom to choose.

            Second, Hayek saw in private property the most important insurance policy for preserving individual freedom. This is true, he added, both for those who own property and those who don’t. He reasoned that when property, which he equated with the means of production, was held in many hands, then “nobody has complete control over us, [and] we as individuals can decide what to do with ourselves.” (136)

            Hayek thought this individual freedom to choose found its ideal expression in market competition, leading to another key element of his vision. How can a society be managed in a coordinated fashion when all individuals are free to choose what they value the most? We need some means of communicating all relevant information about individuals’ value choices and their resulting behavior. For Hayek, this system of communication must be complete, instantaneous, and infallible. “This,” he concludes, “is precisely what the price system does under competition, and which no other system even promises to accomplish.” (95)

            Here Hayek reveals what sounds today like a naïve faith in the power of neoclassical economic theories. Economists of that stripe are so enthralled with the mathematical precision and elegance of their theoretical models that they simply assume that the world must function in accord with the models, and reject the idea that their models may be at best a very rough approximation of reality. There are a great many ways that a price system in any real-world market can be manipulated by various parties to take advantage of other parties, and will generally fail to record accurately people’s true preferences and values. (Just look at what happens to the price of gasoline in any average year.) But Hayek can say that no other system comes even close to the competitive free market in conveying the needed information, simply because he assumes that the pricing system in the market functions to perfection. Quite naturally, no other system can achieve perfection, so according to Hayek, capitalism has no peer.

            Hayek has already told us that individualism need not mean that “man is egoistic or selfish or ought to be.” Yet in one place, in presenting his ideal vision, Hayek seems to come rather close to saying exactly that. Hayek has to grapple with one implication of his extolling individual freedom so highly. One way that we can all lose some measure of freedom is by becoming involved in any collective enterprise with our fellow citizens. When we agree to become a part of any joint activity, we lose some freedom to do things our own way.

Hayek is therefore forced by his theory to take a very dim view of almost any sort of collective. What does he do, then, when faced with the fact that some worthy social ends require cooperation among large numbers of individuals? Hayek first finds it necessary to admit that there are some such projects that are worthy of support—but he then has to backpedal lest he seem to be endorsing a too great a loss of individual freedom. So he adds important restrictions. First, he says that the only social goals that are worthy of being pursued in this way are those that people in society agree to as self-interested seekers of their own benefit—as Selfish Calculators (see the definition of economism). Second, he suggests that it would require that all people in society agree unanimously, and any one individual, who did not find it to his personal benefit that the project be completed, might veto the whole thing. Only in this way, he suggests, can these worthy social goals be pursued in a manner truly consistent with individual freedom.

These restrictions show just how critical individual freedom is to Hayek’s ideal vision of society. Imagine a football team that could not take the field unless every member of the team fully agreed with every part of the coach’s game plan. Or imagine a construction site where nothing could happen unless every proposal made by the foreman was endorsed by a unanimous vote of all the workers. It doesn’t take much thinking to see that if we demanded the preservation of individual freedom that Hayek asks for, we’d have to give up almost every worthy social goal that could be achieved by human teamwork and cooperation. Either Hayek is quite willing to give up on all those important and worthy goals, or else he believes that getting unanimous consent at every step of the process is much easier than experience proves.

            Hayek’s unwillingness to accept any restrictions on freedom has important implications at a more general social level. Why, we might ask, shouldn’t the United States government sell off the U.S. Capitol to be developed as a shopping mall or as luxury condominiums, or maybe paved over for a parking lot? Why shouldn’t the government sell off the Grand Canyon to be strip-mined? The answer for Hayek seems to be—those actions would only be wrong, insofar as every single individual U.S. citizen decides that maintaining the Capitol and the Grand Canyon as is serves his or her personal benefit. All it would take would be one person saying that his benefit would be increased by selling the property off and thereby having a lower tax burden—and the properties would have to go on the auction block. The possibility that we might have a common social commitment to preserve the grand works of our history or of nature simply is not part of any calculation that Hayek engages in. So in this regard at least, Hayek’s insistence that his vision is not that of an “egoistic or selfish” society seems strained.

            To summarize, let’s list some of the features that emerge from Hayek’s discussion in The Road to Serfdom:

• Individual human freedom is the highest value.
• Individual freedom is preserved in a capitalist society and destroyed by a totalitarian state. Any state that deviates only slightly from ideal capitalism is in danger of sinking into totalitarianism.
• The most important exercise of individual freedom is deciding what to do with our own lives. Only strict protection of private property rights can preserve this freedom.
• In order to have control over our own lives, we need an infallible information system to find out the actual consequences of any actions we might take. Only the price system under an ideal capitalist market economy functions as this sort of perfect information system.
• Any collective action has to be viewed with suspicion because it is a threat to individual freedom.

We have now reviewed some of what Friedrich Hayek, as a sort of founding father of economism, had to say about human freedom. In the next post I’ll compare Hayek’s thinking to that of a Mystery Economist—and invite you (and all the Hayek fans out there) to guess who this mystery person is:
http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to_8330.html

Sources

F.A. Hayek, The Road to Serfdom: Text and Documents: The Definitive Edition, ed. Bruce Campbell (Chicago: University of Chicago Press, 2007).

Republican Worship of Hayek’s The Road to Serfdom--Part 1. New Ideas?

            Paul Ryan, in accepting his nomination as vice-presidential candidate at the Republican National Convention, promised the admiring crowd that he’d do battle with “central planners.” (http://www.toledoblade.com/Politics/2012/08/30/Ryan-vows-leadership-rips-Obama.html) One might wonder just where these central planners came from. During the 20^th century the world saw some efforts at central planning of national economies—notably in the USSR, Communist China, and their allies and satellites. Now, we know what happened to them—the USSR went belly up, Communist China embraced capitalism, and the few old-guard communist states still left in the world, like North Korea, are poster children for failed policies. The “central planning” bogeyman is simply not under the bed any more.

            By “central planning” Ryan ostensibly meant the Obama Administration. Now, if anyone thinks that this administration (love it or hate it), which would be considered center-right if it was in power anywhere in Europe, is involved in “central planning” of the U.S. economy, then that individual merely shows a tenuous a grip on reality that is not a very suitable qualification for high public office.

            The best way to understand what Ryan might have meant in invoking dread of “central planners” is that he was trying to channel one of the heroes of the Republican right and of economism more generally, the Austrian economist Friedrich Hayek (1899-1992). Let’s take a look at Hayek and what he meant when he attacked central economic planning in his often-cited 1944 work, The Road to Serfdom.

Fox News commentator Glenn Beck gave The Road to Serfdom a new boost in sales in 2010 by saying: “This book was like a Mike Tyson (in his prime) right hook to socialism in Western Europe and in the United States. But its influence didn’t stop there. It has inspired political and economic leaders for decades since—most famously Ronald Reagan. Reagan often praised Hayek when he talked about people waking up to the dangers of big government.” (www.glennbeck.com/content/articles/article/198/41653/)

            There are a number of features of The Road to Serfdom that deserve attention, and in later posts I’ll discuss more of them. Here, I’ll discuss the historical times during which Hayek wrote and how they shaped his thinking.

            Hayek had two big things on his mind as he watched World War II unfold from his vantage point as a former resident of Austria then living in Britain, teaching at the London School of Economics (from which he would later relocate to the U.S.). First, he was disgusted by colleagues who took seriously the propaganda attacks that the Fascists and communists launched at each other, making it appear that they were as far apart on the political spectrum as could be. Hayek saw both systems as totalitarian and believed that there was little real difference. He ironically dedicated The Road to Serfdom to “socialists of all parties,” making his point that he saw no real difference between right-wing socialists of the Nazi persuasion and the left-wing socialists who took inspiration from Stalinist Russia. He argued that the Nazis, instead of being a reaction against Germany’s experiments in socialism after World War I, were a natural culmination of those policies (a view that at least some historians would quibble with).

            The bigger game he had in his sights, however, was central government planning of the national economy. From where he sat at the London School of Economics, it seemed to him that it did not matter whether policy thinkers tacked toward the left or the right wing politically. In either case they advocated a planned economy. They took for granted that the Great Depression of the 1930s was the result of unplanned capitalism, and that the only solution was some sort of central economic planning. Hayek wrote The Road to Serfdom principally to refute them.

            Hayek argued that central economic planning, which he equated with socialism, ultimately was destructive of human freedom and led inexorably to systems like Naziism and Stalinism. He was a reasonable and gracious opponent (explaining some of the charm of the book that no doubt contributed to its popularity). He did not accuse the moderate socialists of his day of wanting these outcomes. He accepted their protestations that they were strong proponents of liberty and were horrified by the excesses of Hitler and Stalin. He thought them naïve, however, to imagine that socialism could be restrained in a way that preserved freedom. He was sure that even dipping one’s toe in socialist waters was the same thing as diving in headfirst, and that socialism led to totalitarianism no matter what one’s fond hopes of preserving individual freedom.

            If Hayek’s central message is opposition to central economic planning, today he would get hardly any objections from anyone. I cannot see any way to characterize the history of the world during the 20^th century except to say that it proved the wrongness of centrally planned economies as a policy tool. The fall of the USSR and the retreat by Communist China from a state-run economy made clear the defeat of this notion. Since no one today (besides bizarre outliers like North Korea and Cuba) advocates central state economic planning, then if Hayek were writing now, his book would have hardly anything left to say.

            So one conclusion we need to keep in mind about Hayek is that he had a specific agenda that grew out of the specific time in history during which he wrote. He might have had valid warnings for 1944 readers that are simply irrelevant for us today.

            What happened in the world since 1944 has also answered another question that was on Hayek’s mind. Hayek, as we saw, was certain that it was an all-or-nothing proposition—either you avoided any tiny hint of socialism, or else you slid all the way down the famous slippery slope into the totalitarian abyss. Let’s take as our examples Great Britain and Scandinavia. Both, in the decades following World War II, embraced some elements of socialism. Britain avoided a full socialist agenda and stopped with what is technically known as the “welfare state.” The Scandinavian nations went farther and adopted frankly socialist policies.

            Again, you can like it or hate it. You can say this was a good idea for these nations, or a really stupid idea. You can say that the U.S. should emulate them, or that the U.S. should be warned off by their errors. But can anyone say, with a straight face, that these countries, during those years, became totalitarian, just like Nazi Germany and Stalinist Russia? You’d have to be a raving lunatic to seriously try to make such a case. So Hayek’s other claim, of the slippery slope to totalitarianism, seems to have been pretty thoroughly debunked since 1944—to anyone, that is, who has not drunk the Kool-Aid of economism.

            This, in turn, tells us something about the supposedly “new ideas” put forth by the Republican Party and its bright stars like Paul Ryan. This particular new idea dates back to 1944—and has not exactly aged well in the years since.

Part 2 of this 4-part commentary is at:
http://www.theeconomismscam.blogspot.com/2012/09/republican-worship-of-hayeks-road-to_9.html

Sources

F.A. Hayek, The Road to Serfdom: Text and Documents: The Definitive Edition, ed. Bruce Campbell (Chicago: University of Chicago Press, 2007).

Republicans, Ayn Rand, and Cruelty

Paul Krugman, in an August 23 column (http://www.nytimes.com/2012/08/24/opinion/krugman-galt-gold-and-god.html?_r=1&partner=rssnyt&emc=rss), reminds us of Republican vice-presidential candidate Paul Ryan’s devotion to the philosophy of Ayn Rand. While I generally agree with Krugman, whose column generally is one of the most effective antidotes to the Economism Scam from someone with established economics credentials, I’ll have to object a bit to his treatment of this topic. He takes issue with Ryan for getting his policy ideas from an “unrealistic fantasy novel,” to wit, Rand’s Atlas Shrugged.

            The problem with the ideas of Ayn Rand is not that she chose to write them up in the form of a novel. Some very good philosophers have done this, and if more philosophers did so, philosophy would be a lot more fun to read. The problem is rather with Rand’s ideas themselves, not how she expressed them.

      Some people appear to be attracted to a philosophy that proclaims that indifference to the suffering of others is a sign of strength, and compassion and concern for others is a sign of weakness, and that the rule of the world is that the strong win out. In the late nineteenth century, the German philosopher Friedrich Nietzsche (1844-1900) had theories that included such beliefs. In the middle twentieth century, the work of Ayn Rand (1905-1982), who studied Nietzsche, has filled a similar role, and it has been noted how many political leaders today who espouse economism-friendly beliefs appear to be devoted to Rand’s thinking. (See for example http://www.thedailybeast.com/newsweek/2011/04/10/war-on-the-weak.html.) Philosophical ideas of this sort appear to promote a sort of institutionalization of cruelty, a way of telling everyone in society that being cruel is what is expected and approved of.

Perhaps my deepest reason for opposing economism is that it seems to me to be this sort of rationalization of cruelty. It claims to have access to infallible laws of God or of nature (or both) that tell us that certain sorts of suffering and misfortune are normal, expected, and inevitable, and that it is folly to imagine that we could or should do anything about it. Anyone who persists in feeling compassion in the face of this knowledge is either weak or irrational, and their thoughts can be dismissed as socially irrelevant.

Some people apparently find a world like that an attractive place in which to live. I strongly dissent. That’s what’s wrong with the Republican vision of the world—not that Paul Ryan reads fantasy novels.

Republicans as Defenders of the Poor and Middle Class—a Bit of Hokum

Mitt Romney had this to say in his acceptance speech at the Republican National Convention in Tampa (http://www.npr.org/2012/08/30/160357612/transcript-mitt-romneys-acceptance-speech):

“In the richest country in the history of the world, this Obama economy has crushed the middle class. Family income has fallen by $4,000, but health insurance premiums are higher, food prices are higher, utility bills are higher, and gasoline prices have doubled. Today more Americans wake up in poverty than ever before. Nearly one out of six Americans is living in poverty. Look around you. These are not strangers. These are our brothers and sisters, our fellow Americans.”

This passage raises the question—exactly how  dumb do Republicans think the American voters are? They must think we are really dumb to raise the issue of how well the poor and middle class have been doing in recent years, and then imagining that somehow that observation will rebound to their credit.

Let’s do a little fact checking here. Just when in recent American history did the middle class start to stall out in advancing its income, and when did the poor start falling farther and farther behind everyone else? The answer, as I explain in The Golden Calf in more detail, was that all this began around 1980 with the Reagan Revolution. The main tools that derailed the advance in the income and lifestyles of the middle-class and poor in America were so-called trickle-down economics and massive tax cuts for the wealthy.

The Reagan policies in turn led to unregulated financial speculation pushing aside what used to be a reasonable business model of actually making goods and providing services—as also explained in The Golden Calf, and as recently brilliantly summarized in Matt Taibbi’s piece in Rolling Stone (“Greed and Debt: The True Story of Mitt Romney and Bain Capital,” Rolling Stone, Sept. 13, 2012; subscribers only). This model led us to the Great Recession of 2008, which in turn made things even worse for the poor and middle-class—the tail end of the story that Romney recounts above, without telling us the whole story of how it all started and for how long it’s been going on. Of course, Romney’s rich friends made out all right after the recession, except perhaps that the value of their $20 million mansions shrunk to a mere $12 million.

So—do Romney and the Republicans really want this election to be about how the poor and middle class have fared under Republican administrations since 1980? Apparently it’s a safe bet for them so long as they continue to get the mostly free ride afforded them by the press—which may have something to do with how few wealthy corporations today own almost all of the media outlets.

In The Golden Calf I reprint a graph from the excellent book, The Spirit Level by Roger Wilkinson and Kate Pickett (http://www.equalitytrust.org.uk/). The graph depicts the income gap between the richest and poorest 10 percent of Americans between the years 1975-2004. The gap started to increase during the late 1970s and then took off like crazy. There was only one period of time during these decades that the gap stopped getting wider, and actually began to narrow by a slight degree. You guessed it—it was during the Clinton administration.

The Republican Convention Keynote: Beware, Honesty Alert

In another post (http://theeconomismscam.blogspot.com/2012/09/old-wine-in-old-bottles-republican.html) I dissect New Jersey Gov. Chris Christie’s keynote address at the Republican National Convention. I have to give Gov. Christie a little credit, however. In a couple of places in the address he slipped up and said something honest (http://www.foxnews.com/politics/2012/08/28/transcript-chris-christie-speech-at-republican-national-convention/).

In the love-fest that was the Republican convention, everyone who spoke had to tell us all about their warm family ties. (They also then had to tell us, as Gov. Christie did, that what was paralyzing government today, under the leadership of those hated socialist liberals, was “desire to be loved.”) So the Guv told us about his beloved parents and grandparents.

As you would expect from good Republican stock, all members of his family climbed up the social ladder, facing numerous hardships, through individual initiative, hard work, and pluck. Christie’s father worked at an ice cream plant so that he could attend Rutgers University at night and become the first in his family to get a college degree. But here Christie deviated from the Republican mantra—he acknowledged in passing that his father had been assisted by the GI Bill.

His mother, he continued, “was raised by a single mother who took three different buses every day to get to work.”  Now, I could be wrong about this as I don’t have the details before me of the funding of the local buses in whatever town in New Jersey Christie’s grandmother lived in. But before the privatization mantra swept America, I believe that it was commonplace for the local bus system to be fairly heavily subsidized with public money. The price of the bus fare that grandmother paid to get to her job would have probably been out of her reach—along with the job—had she had to pay full freight all by her private self.

Do I want to take any credit away from Christie’s father and grandmother? Hardly. I am sure that alongside these exemplary people, others had the GI Bill and the local bus and failed to take full advantage and make anything of themselves. I have no trouble believing in an America that’s a land of opportunity, and it’s your own individual responsibility to make of that opportunity what you will.

But, as even self-described conservative New York Times columnist David Brooks was forced to say after the convention (http://www.nytimes.com/2012/08/31/opinion/party-of-strivers.html?_r=1&partner=rssnyt&emc=rss), it’s one thing to respect individual responsibility and hard work, and another thing to be so radically individualist as to deny that society plays any role at all in an individual’s success. He characterized the Republican convention rhetoric as falling off the cliff on the side of this radical individualism.

So I am not sure which scriptwriter screwed up with the keynote, but it was refreshing to see a tiny bit of truth slip into the Republican keynote speech. Most of us will make it in life only if we work hard and accept responsibility—except, perhaps, if we are born to great wealth and privilege like Mitt Romney. But practically every one of us, some time or another, will need a bit of a boost. We can create a society that is dedicated to giving as many people as possible that boost, to invest in the people of America, to create as many future success stories as possible.

Or we can do what the Republicans want, to create an increasingly gated community of America, where a few favored people make it big, and then get to point fingers at all the rest of us for our supposed moral failings.

Old Wine in Old Bottles: The Republican Party’s Ideas

Economism claims to be up-to-date, scientific economics when in actuality it’s warmed-over religion—and not even today’s religion, but the religion of the 18^th and 19^th centuries. How powerful a hold the doctrine of economism has on its devotees is well illustrated by Gov. Chris Christie’s keynote address at the recent Republican convention in Tampa (http://www.foxnews.com/politics/2012/08/28/transcript-chris-christie-speech-at-republican-national-convention/).

Christie’s speech reflects two things in particular. First, it shows the persistence of the beliefs of 19^th century English evangelicalism, one of the historical roots of economism, in today’s far-right political thinking. Second, as a bit of an added bonus, it illustrates the correctness of George Lakoff’s notion of the basic political “frames” of today’s liberals and conservatives, as explained in his excellent book, Moral Politics (http://www.amazon.com/s/ref=nb_sb_ss_i_4_13?url=search-alias%3Dstripbooks&field-keywords=george+lakoff+moral+politics+how+liberals+and+conservatives+think&sprefix=george+lakoff%2Cstripbooks%2C334).

Christie’s mother, the governor explained in his speech, taught him that it is better to be respected than to be loved, which he took to mean that in government, “we have become paralyzed, paralyzed by our desire to be loved.” This shows once again how out of touch the Republicans are. Gov. Christie obviously never applied for Medicaid. If you ask any recipient of any welfare-type program what it was like to jump through all the hoops that we require before we’ll given them any of the assistance that the law provides for them, they would not say that the people in charge were so desperate to be loved that they were paralyzed. They were probably paralyzed by all the bureaucratic barriers we erect to show the poor that they are worth less than other folks, but not by a desire to be loved.

So where does this tough-love mantra come from? This is simply a reincarnation of 19^th-century English evangelicalism—as I explain in The Golden Calf, the belief system that caused a quarter of the Irish population to be starved during the great potato famine. On this belief, everything in the world down to the smallest detail is designed by God for his purposes. Everyone is born a miserable sinner destined for everlasting hellfire, so a benevolent God wants each person to be saved, which can come only through a deep and abiding faith in Christ as savior. God has designed the world to prick everyone’s conscience to prompt them to accept Christ’s salvation. The poor, apparently, need more pricking than the rest of us, so God designed the world to prick them really hard.

Wishing to be loved, weak-minded liberal types try to help the poor by creating programs of charity and government assistance in this world. In Christie’s words, they think “people need to be coddled by big government.” But these silly liberals thereby try to undermine God’s will, since the real rewards are in the next world, not this one. Their “loving” interference cannot help the poor; it can only condemn more of the poor to hell. Much better to let the poor suffer in this world so that they’ll find everlasting salvation through faith in Christ.

In a nutshell, economism teaches us that any government policies that extend a helping hand to those in need are bad. If you want to, you can see this as divinely inspired truth. If you don’t like that approach you can see this as hard-headed economic science. What matters is not God or science, but the overwhelming sense of certainty—which we can see reflected in every sentence Christie and others uttered at the convention. Wanting to be loved leads us to ruin; being tough is the only way to run things.

Back to linguist and social critic George Lakoff. He looked at a lot of research and decided that liberals and conservatives think differently because they tend to employ two radically different “frames,” ways of organizing how they see the world. Both frames, he decided, are open to criticism because they are ultimately based on the family, and you can make an excellent case that running government like you treat your own family is simply a dumb idea no matter what your view of what the family should be. But be that as it may, Americans of all political stripes seem hopelessly wedded to the idea that the family and the government are somehow analogous.

The similarity ends, however, with liberals’ and conservatives’ respective visions of the ideal family. Lakoff characterizes the liberal view as the nurturing parent and the conservative view as the stern father.

To conservatives, the answer to anything that happens within the family is rigid, unyielding discipline. Parents who think that at least some of the time you ought to be nice to your children, and support them emotionally as they grow, are derided by conservatives for their “coddling” behavior and for “needing to be loved.” Conservatives are quite sure that the world will come to an end if the father-figure (note the gender bias) deviates one single hair’s breadth from strict discipline.

Lakoff, while he’s reviewing the large body of psychological literature related to views of the family, adds a point that may or may not mean anything about government, but certainly means something about the family. He states that the pros and cons of the two styles of parenting have been thoroughly investigated and the results are in. If you want to raise decent, responsible kids, the nurturing parent wins hands down over the stern father. 

If you think Lakoff knows what he’s talking about, then conservatives make two blunders. The first is assuming that we should run the Federal government like a dad running the family. The second is thinking that they actually know how to run the family.

So, in the keynote address that the Republican Party scripted to tell the American people what they believe in 2012, we see two sorts of old wine in old bottles. One is that any time government tries to assist anyone with life’s hardships, these people are being “coddled” in a way that must be bad for their souls. The second is that if you show any sense of compassion for people who are facing misfortune, then you are falling short of the stern father who demands respect above all else, and falling into the trap of “wanting to be loved.”

Gov. Christie said that we should vote Republican because of the strength of their ideas. Well, here is the strength of their ideas. If we vote for this, we get what we deserve.

Economism: A Primer

            Here I will first lay out a basic definition of ‘economism,’ summarizing material from the book, The Golden Calf: Economism and American Policy. [1] I will then list some other terms for economism and explain what’s significant about the use of multiple terms for what’s basically the same idea. Finally I’ll address whether economism is actually economics, as it claims to be, or warmed-over religion.

            In defining ‘economism,’ we run into several problems. The first is that most of the people who have offered definitions are critics and not defenders of economism. There’s a reason for this. I talk about economism as a set of beliefs, as a way of thinking. But for a true defender of economism, this won’t do. If we think of economism as a set of beliefs, that leaves the door open for alternative sets of beliefs. But the die-hard economism advocate wants to deny this very possibility. To that advocate, economism is simply the truth about the way the world operates. Either you accept economism as truth, or else you’re deluded.

The Basic Ideas of Economism

            Economism’s core beliefs fall into roughly three clusters: the economy obeys God-given laws; the economy is everything; and the economy is self-regulating.[2] Let’s look at each cluster.

The Economy Obeys God-Given Laws: Economism takes off from one particular school of economics, neoclassical economics.[3] The founder of this school, William Stanley Jevons (1835-1882) was a great admirer of the physics of Isaac Newton. Jevons believed that Newton’s laws of physics were the model of what a science ought to look like, so if economics were to be a science, it had to look just like physics. That meant, in turn, that economics had to be governed by precise mathematical laws that applied everywhere and at all times.

            Economism is therefore the belief that economics is governed by laws that are as universal and without exception as the law of gravity. You could look at this as a scientific state or as a religious statement, or both. Seen one way, economism simply describes the way the world is according to firm, irrefutable scientific evidence. Seen the other way, economism reveals to us God’s plan for the world. It is unscientific or heretical, or both, to deny these truths.

The Economy Is Everything: Since we possess such elegant, mathematically precise laws to tell us how the economy works, economism then tells us that the best way to understand every aspect of our lives is to view it as economic. Everything in life is a commodity for sale. All encounters with other people are market exchanges governed by contracts.

This aspect of economism requires that we view human beings in a particular way. The traditional term for this view of the human is Homo economicus, or “Economic Human.” For our purposes we can translate this somewhat freely as the Selfish Calculator. The Selfish Calculator sees himself as an isolated individual responsible only to himself, and out to advance solely his own interests. He approaches everything in life with the question: can I gain more of what I want by doing whatever is on offer? If I want something, will I get more of what I want by paying the going market price for it, or would I be better off by saving my money for something else instead?

The Economy Is Self-Regulating:  Since the economy is governed by precise, irrefutable laws, that means that the best possible thing we can do is to leave it alone and let it run itself. To the extent that the economy needs any management at all, we must turn over that management to people specifically trained as technical economic experts. The worst possible thing that could happen would be for politicians to intrude into this area where they’re not competent to govern and where they could only muck things up. Equally as bad would be for moralists to declare that some goals in society—let’s say, a clean, unpolluted environment--are more worthy than others, and that we should regulate the economy so as to bring about those goals. Economism teaches us that if an unpolluted environment is really a good thing, the unregulated free market will bring it about. If the market fails to produce that outcome, that simply means it’s not a good thing after all.

When governments impose taxes, we end up with a pot of money raised by taxation. Economism agrees that we need to spend a bit of tax money on the basic machinery of society such as police and national defense, which are needed for the economy to function at all. But as soon as the pot of money grows beyond those minimal needs, then politicians are faced with a huge temptation. Instead of allowing the free market to decide what happens in society, who gains and who loses, the politicians will almost certainly decide that some people in society are being unfairly treated and need more resources. As soon as government starts to mess with the economy in that way, bad things are sure to happen, says economism. So it’s no great stretch from the basic ideas of economism to the related idea that taxes should be kept as low as possible. The only trustworthy and competent politicians are those who swear an oath to cut taxes to the bone.

            In listing these three clusters of beliefs, I have described how economism looks to its advocates (who, as you’ll recall, usually don’t bother to define it at all). Virtually every critic of economism states that one of its core features is its internal contradictions. Advocates for economism typically say one thing while doing another—for example, they demand smaller government but then increase government power when that power can be used to defend the interests of large corporations. These contradictions are not accidental; they are in fact built in to the very ideas of economism. The above list of belief clusters is an accurate statement of economism, even if people who claim to be guided by economism all too often act in ways opposite of what these ideas would seem to dictate.

Economism and the Terminology Muddle

            I call this set of beliefs economism because I was first introduced to the idea by authors addressing the ethics of international development, who prefer that term for what they are talking about. As I tried to find out more about this way of thinking, I became aware that other authors employed many different terms for the same set of beliefs:

• Neoliberalism (the term probably most favored by historians and social scientists critical of economism) [4]
• Economic liberalism (the term used in 1944 by Karl Polanyi, one of the first to identify and criticize economism)[5]
• Market fundamentalism (a term first offered by billionaire George Soros in 1998)[6]
• Market populism [7]
• Market triumphalism [8]
• Economics or neoclassical economics (for those who argue that all of neoclassical economics, or indeed economics in general, shares the core features I have identified with economism) [9]

            Given all these options, let me first explain why I prefer the term economism. The word scientism has been used in the past as a label for a set of beliefs about science. Science, properly understood, is an evolving and ideally self-correcting system. Any discoveries made by science are in some sense temporary, and might be replaced by new discoveries at a future date—just as Newton’s laws of physics, so beloved by Jevons and others in neoclassical economics, have been supplanted by theories of relativity and quantum mechanics. And scientists understand that science has limits—it is very good for understanding certain aspects of our world, but essentially powerless to explain other things that are very important to us.

            Some people, however, don’t get these things about science. They imagine that science reveals eternal and universal truths, and suffices to address everything of concern to humans. In effect, these people don’t understand science, but instead worship it.

            Let’s take as an example so-called paranormal phenomena. The person with a proper scientific attitude, I suggest, would agree that to date there is very little scientific evidence to support the existence of most such phenomena. But that person would also be open-minded and admit that there may be things beyond the reach of science, at least as science is practiced today. The believer in scientism, by contrast, as soon as she hears that “there’s no scientific proof,” decides that paranormal phenomenon simply cannot exist, and that anyone claiming otherwise is a fraud.

            I argue for a parallel between the relationship of scientism to science, and of economism to (legitimate) economics. Economics is supposed to be a branch of (social) science. As such, when approached with a proper scientific attitude, its limitations ought to be accepted and stated forthrightly. The believer in economism, by contrast, admits no limitations or weaknesses. Her favored theory of economics is always right, and suffices to explain every aspect of human life.

What the Terminology Muddle Reveals

            I have explained why, of all the possible terms (and I have no doubt missed some others), I prefer to call this set of beliefs economism. The next question is whether the existence of all these different terms holds a message that could be useful for our inquiry.

            The first message is a repeat of what I said earlier. Believers in economism don’t need a word for it, any more that the proverbial fish needs a word for water. So the only people who need to say “economism” are those who wish to hold it up to possible critique. As these people come from many different disciplines and have different agendas, it’s no surprise that they have used different terminology.

            But there’s also a deeper message. The terminology muddle that I’ve described is itself a sign of the success of the economism belief system. If the critics of economism had made serious headway, and had succeeded in raising questions about economism that had gained traction in the American public conversation, then I suspect that by now we’d have an agreed-upon term for it as well as for the various positions critical of it. The fact that there’s been no agreement about a term indicates how successful economism has been in hijacking that public conversation and turning it to its own ends. It is simply not possible today to seriously critique economism within that conversation. Economism has set the rules for what gets said and what makes sense, so that if you try to propose ideas that differ substantially with economism’s world view, you seem to be talking nonsense, or a foreign language. To use a word that Republicans today like to hang on President Obama and the Democrats, you must be a “socialist” (despite the fact that if you look up socialist in the dictionary, you’ll see immediately that Obama is nothing of the sort).

Economism: Religion, not Economics

            The Golden Calf is primarily about how economism takes the logical form of a religious belief system, not of the science that it claims to be; and that it inherited its religious content from two sources, the Calvinist-Puritan tradition in America and evangelicalism as it appeared in England in the early nineteenth century. [1] Here’s a brief summary.

            John Calvin (1509-1564) taught that God was both all-powerful and all-knowing, so logically, the plan for the world, including every individual human life, down to the smallest detail, was determined by God at the first moment of the existence of the universe. It followed from this that no human being could be saved and go to Heaven based on his or her own voluntary actions; the doctrine of predestination taught that all such things were predetermined before one was born. Calvin also taught that only a relatively few souls, the Elect, were destined by God’s plan for salvation, and the majority would be consigned to everlasting hellfire.

            It became therefore a matter of great concern to Calvinists and (later) Puritans how you could tell if you were among the Elect. Since you had no choice but to follow God’s plan for your life, it was assumed that if you were one of the Elect, God’s irresistible grace would show itself in your life in a variety of ways. The Puritans also thought that your worldly occupation was a divine calling and that your success at that calling, whether as a banker or general or streetsweeper, was one way that God’s glory was enhanced in this world. The idea developed that if you were favored with wealth as a result of your work, then that was a sign of being among the Elect.

            English nineteenth-century evangelicalism had a different take on salvation; it taught that while we are all sinners from birth, all could be saved through faith in Jesus Christ. But that religious doctrine also held that everything that happened in the world was a part of God’s plan. Suffering in the world was one way of pricking one’s conscience and making it more likely that one would develop faith in Christ, so it seemed natural to conclude that God made the world in such a way that sinful humanity would suffer and therefore find faith. One might even imagine that the more sinful the person, the worse the suffering that a kind God had arranged for that individual. This led to the belief that the poor were poor because of their own sinfulness, and had to suffer because otherwise they would not be saved in the next world. Anything one did to aid the poor or to lighten their load would backfire. It would threaten their eternal salvation, and it was blasphemous anyway because it suggested that one was going against God’s plan.

            If you combine these two religious traditions, you get the belief system that the rich are rich because they have found special favor in the eyes of God, and the rest of us should treat them with due deference. The poor are poor because it is part of God’s plan for them, and anything we might do to aid their plight would be both ineffective and irreligious. If we are rich in such a world, and many people around us are poor, this religious belief system absolves us of any sense of guilt or responsibility for this disparity in worldly fate. We can look with complete equanimity upon a world where obscene wealth for the few coexists with grinding poverty for the masses.

            The literary historian Gordon Bigelow argues that evangelicalism in England was very influential among prominent politicians of the time.[10] The “political economy,” as it was then called, that emerged in England during those years was largely a product of evangelical beliefs. That political economy then created the raw material out of which such thinkers as William Stanley Jevons (1835-1882) later developed neoclassical economics. Thus there is a direct line from a part of this religious tradition to the theoretical basis of economism. The influence of the Protestant (Puritan) Ethic in American thought made it very likely that thinking of the wealthy as especially favored by God and deserving of their riches would become a part of economism as soon as it took root this side of the Atlantic.[11]

            As these religious thought traditions became intermingled with neoclassical economics, a subtle segue occurred. Religious thinkers viewed the teachings of Puritanism and of evangelicalism as being dictated by the immutable laws of God. The world was a certain way, where the rich thrived and the poor suffered, because God had designed it thusly. Anyone seeking to resolve any lingering doubt about the justice of the world could therefore appeal to divine law for absolute certainty that this was the way things should be. As neoclassical economics developed, and tried to fashion itself after Newtonian physics to develop mathematically precise laws and models, its practitioners may have imagined themselves no longer to be bound by religious doctrines, and to have become thoroughly secular. But, in sociologist Max Weber’s (1864-1920) phrase, they were still haunted by the ghosts of dead religious beliefs.[11, p. 182] They could have the same absolute certainty that the world was the only way that it possibly could be. But now the supposed source of that certainty was the scientific, mathematical truth represented by neoclassical economics. The internal logic of the belief system did not change at all; God simply moved to one side and Science occupied his throne.

            This quick review of economism shows why there has to be something devious about this belief system. Economism tells the world that it’s one thing—economic science--but actually is another—a set of repackaged religious beliefs. That’s just one of the many inconsistencies that characterize economism, but it shows how wary we ought to be before we take anything that economism argues for at face value.

Sources

1. Howard Brody, The Golden Calf: Economism and American Policy (CreateSpace, 2011).
2. The single best-organized definition of economism that I have discovered is offered by Des Gasper, The Ethics of Development, (Edinburgh: Edinburgh University Press, 2004), pp. 80-81.  An even more detailed definition is provided by Margaret Somers in (though she uses the term market fundamentalism instead): Margaret R. Somers, Genealogies of Citizenship: Markets, Statelessness, and the Right to Have Rights (New York: Cambridge University Press, 2008), especially pp. 2-5, 38-39 and 73-82.
3. On Jevons, neoclassical economics, and their relation to economism, see Chapter 4 of The Golden Calf.
4. See for example David Harvey, A Brief History of Neoliberalism (New York: Oxford University Press, 2005); and Philip B. Smith and Manfred Max-Neef, Economics Unmasked: From Power and Greed to Compassion and the Common Good (Totnes, Devon, UK: Green Books, 2011).
5. Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon Press, 2001).
6. George Soros, The Crisis of Global Capitalism: Open Society Endangered (Boston, Little, Brown, 1998), pp. 126-28; Margaret R. Somers, Genealogies of Citizenship: Markets, Statelessness, and the Right to Have Rights (New York: Cambridge University Press, 2008).
7. Thomas Frank, One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy (New York: Anchor, 2000).
8. Michael J. Sandel, What Money Can’t Buy: The Moral Limits of Markets (New York:Farrar, Straus and Giroux, 2012).
9. See for example Duncan K. Foley, Adam’s Fallacy: A Guide to Economic Theology (Cambridge, MA: Belknap Press of Harvard University Press, 2006), and Steve Keen, Debunking Economics: The Naked Emperor of the Social Sciences (New York: Zed Books, 2004).
10. Gordon Bigelow, “Let There Be Markets: The Evangelical Roots of Economics,” Harpers Magazine 310 (no. 1860), May 2005, pp. 33-38
11. Max Weber, The Protestant Ethic and the Spirit of Capitalism, trans T. Parsons (Mineola, NY: Dover Publications, 2003).