Don’t call me hetero, says Quiggin

"I don’t think of myself as a ‘heterodox’ economist," writes John Quiggin. Despite his left wing views, Quiggin defends the methods and assumptions of mainstream economics. As he sees it, the mainstream is broader than most people think.

In a recent article for The Nation, Christopher Hayes described the economics profession as a ‘mafia’ which enforces a pro-market, small-government orthodoxy on its members. According to Hayes, economists like Alan Blinder and David Card have been punished for questioning the orthodoxy. Blinder worried about "the massive dislocations that the current trade regime and outsourcing trends might bring for American workers" when he should have been defending free trade. And Card questioned whether a higher minimum wage really would destroy jobs. Both were attacked. But Hayes sees some cause for optimism:

As Card’s and Blinder’s experiences show, the "mafia" still flexes its muscles, but there are also signs that its hold on power is slipping. While the discipline remains dominated by a "neoclassical" consensus that is generally pro-market and suspicious of government intervention, an explosion of new research programs and methods have provided strong evidence that many of the pillars of that consensus rest on a foundation of sand.

Not everyone is convinced that Hayes’ division of economics into heterodox and orthodox makes sense. Matt Yglesias argues that "What heterodox economists are really challenging isn’t neoclassical economics but the political behavior of neoclassical economists." And, according to Yglesias, mainstream neoclassical economists are happy to modify their assumptions if there’s a good enough argument for it. What they won’t do is throw all their assumptions out the window at once. Not everyone who questions an assumption should qualify as heterodox.

At Crooked Timber, Henry Farrell agrees with Yglesias:

There seem to me to be two different fights going on here, which often get confused… One is whether economists’ reliance on the rational actor model, assumptions of self-interest, supply and demand and so on is intellectually good or bad. The second is whether ‘mainstream’ economics is necessarily right wing.

Quiggin has no problem using mainstream economic analysis for social democratic ends. And like Yglesias, Quiggin argues that the mainstream isn’t as narrow as many people think:

…most of the concerns (("I guess the big exception to this is if you want to discard methodological individualism altogether, but the theoretical enterprises that took this route (such as structuralism) don’t seem to me to be prospering."~Quiggin)) that are commonly raised against simple-minded versions of economics can be addressed without throwing out the whole system and starting from scratch. If you don’t believe in the perfectly rational economic man (sic), there’s a huge body of work on behavioral economics, bounded rationality, altruism and so on. If you don’t like simplistic competitive models, the shelves are groaning with books on strategic behavior and game theory.

On Quiggin’s view, it makes little sense to call economists like Blinder and Card heterodox. That label should probably be reserved for people like Michael Perelman.

This entry was posted in Economics and public policy. Bookmark the permalink.
Notify of

Newest Most Voted
Inline Feedbacks
View all comments
16 years ago

The simple fact of the matter is that economics, to the extent that it tells the truth about anything, is value free, and so economic analysis can be used (or abused) by people with any and every political agenda. A good economic analysis may tell you what is likely to happen if you do "x" but you still have to make up your mind on non-economic grounds whether the outcome of "x" is what you really want.

Nicholas Gruen
16 years ago

Hmm, the old 'value free' diversion ey?  Well that should get the thread going for a while.

16 years ago

Testy test test… I keep vanishing into the spam bin, even when logged in as admin.

Jason Soon
16 years ago

DonYou'll find that the Austrian true believers are joining in the mindless cacophany of exaggerations made by this 'post-autistic' crowd – there is some stuff on the post-autistic economics website by them. Where they are coming from I believe is a particular strand of mindless libertarianism which is influenced by post-modernism. They have taken on board Hayek's critique of 'scientism' but blown it up into a critique of science full stop and the so called pretensions of the scientific outlook under the irrational phobia that it necessarily leads to central planning and social engineering. Because of this they seek to discredit all scientific approaches to society and unwittingly want to reduce economics to history, and therefore ironically reintroducing the ghost of the Historical School which their much sharper intellectual ancestors exorcised from the discipline.   

16 years ago

In case the site is accepting comments today, this is Pete Boettke's take on this issue, posted on The Austrian Economists

Jason Soon
16 years ago

Rafewhat utter rubbish. "What it means to be "mainstream" today is completely devoid of any substantive proposition about the self-correcting properties of the market economy."Mainstream neoclassical economics does start off on the presumption that there are such self-correcting properties. Complications are then introduced because they do actually exist. It's also misleading to say that neoclassicals are necessarily 'agnostic' on policy conclusions. It is of course ultimately a matter of the devil being in the details and looking at the specific empirics of the case but that's why it's called a 'science'/ The Austrian complaint about neoclassical economics is simply that it doesn't support any unvarnished purist line on laissez faire. What really pisses me off about the Austrians is that the left-heterodox side exaggerates and caricatures the modelling aspects of neoclassical economics for the purpose of deriding it as ideologically biased towards markets. Then the silly Austrians join these heterodox groups, sign up to their stupid petititions and join in the general disparagement directed at these modelling assumptions but because of the *opposite* assumption that neoclassicals are biased against markets.  

Jason Soon
16 years ago

ahem – the spacing function on comments doesn't seem to work!