As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. ***Yet further down in the article, Krugman writes:
Meanwhile, saltwater economists, who had comforted themselves with the belief that the great divide in macroeconomics was narrowing, were shocked to realize that freshwater economists hadn’t been listening at all. Freshwater economists who inveighed against the stimulus didn’t sound like scholars who had weighed Keynesian arguments and found them wanting. Rather, they sounded like people who had no idea what Keynesian economics was about, who were resurrecting pre-1930 fallacies in the belief that they were saying something new and profound.This is ideological, rather than rational, opposition. Let me take a little digression into cognitive science to explain something about distortions of reasoning. If you put a VR headset on someone and have them walk around then (before VR sickness sets in) they can interact in a computer-synthesized space. Unless, that is, the ground they are on is sloping. In which case they will, quite unconsciously and without visual cues, drift down-slope. And this is how it is that ideology and, yes, money influenced the economic profession. The claims of rationality were, for the freshwater economists, only the rationalizations of status-seeking behavior.
The field of economics, I think, needs ethics to keep it track, so that it is a scholarly discipline rather than one that produces extensively rationalized propaganda. The ethics I believe the field needs to remember, first, is that of scientific validity. Marxists have made claims for scientific validity for their theories. Yet those claims have largely failed and Marxists are roundly criticized for them by non-believers. The views of the uncritical supporters of wealth and power are to be equally subject to skepticism. By which standard it is plain that a great many capitalist economic theories failed, yet were not discarded. Economics, if it is to be science, must no more be a propaganda arm of capitalism than of socialism.
Beyond the ethical standard of scientific validity, I think economists would do well to adopt some ethical standards from other human sciences. Economics began in a time when vast disparities of wealth were the norm and, so far as anyone knew, society had always been agrarian. It was tempting to find ethical validation for this situation. We now know that humans did not start out with an agrarian society and that vast disparities of wealth are not a human universal. It is time to abandon the idea that these disparities are natural.
In the late 19th century, the idea of social Darwinism was popular. It was widely believed that intense interpersonal competition was healthy for humanity, regardless of how hard it was for individual humans. This turned out to be false, and acting on the idea led to horrors in the 20th century. The rest of the social sciences reluctantly repudiated social Darwinism, though it is not entirely forgotten. But economics has yet to reject it; the idea lives on in the high value economists place on market competition. It is time, and past time, for economists to reject social Darwinism.
It is hard for any social science to separate its ideas from the ideas of its times, yet of what use is any science if it only echoes the ideas of its time? It is exactly the value of science that it seeks ideas of value outside of the time and place of their development. One of the best ways to learn to distinguish the unique ideas of a social science discipline from the general ideas of its time is to study the discipline's history. Economics is, in addition, a largely historical science: economic theory depends heavily on the study of historical data. Indeed, the recent failures of the discipline were made possible in part by the abandonment both economic history and the history of economics as essential parts of the discipline. It is time for economists to remember.
This article has taken a path which surprised me. I did not realize, when I began writing, that this was going to be an article on ethics and science. Yet it seems to me that without ethics, scientific research is not possible. Without basic honesty, without the ability to admit error, without the tools of criticism and review, there is no way to arrive at scientific truth. I believe that economics went off-track partly because of highly-rewarded status-seeking behavior on the part of many economists. This was rationalized as a choice of elegant theories yet in reality was the expression of a desire for the favor of the wealthy and powerful. I have discussed four specific ethical failures:
- The first, and most significant failure, is in an area of ethics common to all sciences: the failure to honestly test theories against experimental evidence. This is the first and final proof of all scientific work, and if it is undertaken dishonestly, the discipline will accept as true and teach invalid ideas.
- The defense and validation of vast disparities of wealth. This reduced non-socialist economics to a propaganda arm of wealth and power, and led to a failure to criticize the abuses of wealth and power.
- The concealment of social Darwinism in the ideology of the free market.
- The rejection of history, both as a way to test theory and as a method of self-understanding. This led to a collapse of self-criticism, which in turn concealed and defended other failures.