Lars Syll has linked to a really interesting paper by Tony Lawson amidst a discussion about maths and modelling in economics. The paper really is worth a read in its entirety. It is entitled Mathematical Modelling and Ideology in the Economics Academy: Competing Explanations of the Failings of the Modern Discipline? and can be found for free download here. In it Lawson deals with what makes mainstream economics so desperately poor and he ultimately undertakes an examination of what I called “Brain-Slug Economics” elsewhere.
He notes that his critics often chastise him for not arguing that neoclassical economics is inherently ideological. Lawson concedes that he rarely or never uses either the term “neoclassical” or the term “ideological” because he does not think that they are needed to critique the fundamental problems with the way much modern economics is done.
Before getting into this I should say that while agree with Lawson’s arguments against the ideology crowd, which I shall lay out shortly, I do not agree that the term “neoclassical” does not denote a tendency in economics that has fed into the very formalism that, as we shall see, Lawson despises. I think that a great deal of the problems with modern economics is its marginalist and, ultimately as I have shown before, teleological tendencies. These are hallmarks of the neoclassical approach and it is these tendencies that accommodate to the problems that Lawson identifies.
Anyway, back to his discussion of ideology. He identifies ideology as meaning two different things to two different camps of people who make the case that mainstream economics is ideological. I will here quote Lawson in the original:
1) Ideology1: a relatively unchallenged set of (possibly distorted or misleading) background ideas that every society or community possesses which forms the basis of, or significantly informs, general opinion or ‘common sense’, a basis that remains somewhat invisible to most of its members, appearing as ‘neutral’, resting on preconceptions that are largely unexamined. A consequence is that viewpoints significantly out of line with these background beliefs are intuitively seen as radical, nonsensical or extreme no matter what may be the actual content of their vision.
2) Ideology2: a set of ideas designed, or anyway intentionally employed, in order to justify, preserve or reinforce some existing state of affairs, where this state of affairs is preferred, perhaps because it facilitates or legitimates various advantages for some dominant or privileged group, and where these ideas mostly work in the manner described by way of intentionally masking or misrepresenting the nature of reality.
The two concepts of ideology lead to different viewpoints of the mainstream. Those that adhere to the first definition see the mainstream as dupes who cannot see beyond their own noses. They live in a society with a given set of rules (market, capitalist etc.) and this blinds them from the truth of the system. When confronted with the Red Pill and the Blue Pill they opt for the Blue Pill.
Those that adhere to the second definition actually seem to believe, as Lawson points out, in some sort of malign conspiracy. In this view, the economists are like paid hands who piece together a system of ideas for the Powers That Be. While the first viewpoint stems from a sort of crude and half-understood social constructivism, the second viewpoint stems from Marxism plain and simple; especially, as Lawson points out, Gramsci’s concept of “hegemony”.
Lawson says that such a view is completely untenable. Why? Because many of the leading theorists actively warn against interpreting their models in an ideological fashion (whatever way you want to define ideology). He quotes Frank Hahn to this effect:
[…] it cannot be denied that there is something scandalous in the spectacle of so many people refining the analyses of economic [equilibrium] states which they give no reason to suppose will ever, or have ever, come about. It probably is also dangerous. Equilibrium economics […] is easily convertible into an apologia for existing economic arrangements and it is frequently so converted.
Here we see that Hahn has a perfect amount of detachment from the society he inhabits, so he doesn’t fall into the category of Ideologist Mark I (or, at least, it appears so on the first vulgar reading). He also doesn’t seem to be at all apologetic for the system, which would make him a rather poor agent for the bourgeoisie. No, Lawson says that what is really going on is something altogether different. What these economists are chasing is the ghost of a perfectly balanced deductive theory. Lawson writes:
In truth in those cases where mainstream assumptions and categories are couched in terms of economic systems as a whole they are mainly designed to achieve consistency at the level of modelling rather than coherence with the world in which we live.
There is a level of narcissism operating here. Mathematics and deductive logic are inherently narcissistic systems of thought which give narcissistic psychological gains. To have created a model is to have created a self-contained toy world that “works” perfectly. It is like playing one of those online farming games where you try to build the best farm that you can — meaningless as this may be. In both cases you create your own little sandbox world in which you can play peacefully away from the bad smells and loud noises of reality, in all its complexity and confusion.
A particularly amazing instance where such narcissism shines through in all its glory is in the case of econometricians. Here I will again quote Lawson in the original:
If we focus on empirical contributions, specifically, it is clear that there are few attempts to repeat the results of others, progress the results of others, or even acknowledge the results of others. Even econometricians using identical, or almost identical, data sets are regularly found to produce quite contrasting conclusions, usually with little attempt at explanation. The systematic result here, as the econometrician Edward Leamer (1983) observes, is that: “hardly anyone takes anyone else’s data analysis seriously”.
I can absolutely confirm this. But I would go one further: the reason that econometricians don’t take each others’ data seriously is because, being econometricians, they know how the game is played. And if you know how the game is played you know how much room for arbitrariness and manipulation there is within the process. Working economists and econometricians who actually believe that the method works always consider themselves the exception to the rule. “Oh yes, he has no chance of having done it right, but of course I know that I have!”
The level of narcissism here is primitive. But I should be clear here: I am not saying that people in these fields are particularly narcissistic. No, what I am is that the method itself generates a narcissistic response from the people that undertake it. Just as war turns civilised men into rapists and murderers, these models turn modellers into hermetically sealed units with little real link to the outside world (at least, insofar as their work goes). No communication is needed; either with reality or with others. The Self is all that matters. The modeller is a God within his own sandbox. King of the castle in the little world he has built.
Lawson finally pinpoints this whole situation as a different form of ideology. He writes:
First and foremost, I want briefly to indicate an alternative ideology, a version of ideology1 (a set of background views manifest unquestioningly as if normal or neutral) that I believe does pervade the economics academy, one that is extremely widespread and indeed plays a significant contributory role in the failings of the discipline. But this is a set of beliefs that bears not directly upon the nature of the underlying economic system at all. Rather it is precisely the doctrine that all serious economics must take the form of mathematical modelling. [Emphasis original]
I agree entirely. I could not agree more. But here is where I will take Lawson’s argument to the logical conclusions that I believe he will not take it to because, well, frankly because he is to some extent within this ideology. The name for this ideology that Lawson identifies is one that we will all be familiar with: it is called Enlightenment and, as I have shown before, it is precisely this ideology that has buried any criticisms of itself and remained dominant in its blindness for centuries.
It is an ideology that pervades all our language, all our conceptions of how to organise our societies and even all our perceptions of ourselves. What we see unfolding on the blackboards of the mainstream economists is the project of Enlightenment in all its glory; it is the dream of the Mathesis Universalis that was never really locked up and instead went into hiding underground. And until its critics are willing to call it by its name they will continue to find that it slips though their fingers, as their fingers are ultimately made of the same slippery stuff.
That is, however, a rather broad topic and I do not hope to broach it here. Rather I will leave the last word to Lawson because, although he and I think that the problem is rooted in different places, we nevertheless agree on almost every issue of substance. After considering his own attendance at the INET conference he writes:
In fact so apparently compelling is the belief system in question (that mathematical deductive formalism is the proper way to do economics) that many heterodox economists too seemingly fall under its sway. Although heterodox modellers do not follow the mainstream in dogmatically insisting that we all everywhere adopt a formalistic orientation, it remains the case many heterodox economists fail to recognise that the conceptions they find inadequate in mainstream theory owe something to the mainstream modelling emphasis; and these heterodox economists continue excessively to explore alternative mathematical models and forms of formalism in the face of explanatory failures and unrealistic formulations.
Indeed. And Lawson also goes on to say something in passing which I believe deserves more attention:
Also, the pattern of behaviour in question seems to be gendered, with formalistic economics, and the concern with prediction, being relentlessly pursued largely by gendered males.
Hmmm… What was that I said about King of the castle again?
Update: Here is a video clip of Lawson which I found on Youtube that is worth spreading. It’s hard to tell, but I think I detect a bit of an Irish accent in Lawson’s speech. What is it with the Irish feeling the need to critique the pretensions of mathematical science? I do wonder… Perhaps it was due to the many years the country spent under the boot of the priesthood after which the Irish learned an innate distrust of those who base their claims to authority on mystical principles. Who knows?