Arnold Kling relaying Noah Smith relaying the state of the economics profession. I do not disagree.
In a related essay, Smith argues that the current debate in economics is between the center-left and the radical left.
The New Center-Left Consensus is attractive to academics and policy wonks. It draws on an eclectic mix of mainstream economic theory, empirical studies and historical experience. It refuses to assume, as many conservatives and libertarians do, that free markets are always the best unless there is a glaring case for government intervention. It’s more willing to entertain all kinds of ways that government can improve the economy, from welfare to infrastructure spending to regulation, but it also recognizes that these won’t always work. . .
But there’s a second strain of progressive economic thinking that is gaining attention and strength. This alternative could be called the New Heterodox Explosion. It’s basically a movement to purge mainstream economics from progressive policy-making and thought.
Smith and the left dismiss those of us who favor free markets as outmoded and simple-minded. So the real debate is between economists who believe that elite mainstream economists know best how to fix the economy and others who believe that complexity theorists or evolutionary economists know best how to fix the economy.
Read the whole thing.
What strikes me about this circumstance, and I read it coming as early as my first year of graduate school in 1999, is how basically this “revolution” in thinking is ad hoc. It is not scientifically based. It is as close to a professionalized ad hominem attack as you can get. It would be nice, just to see once, a recognition that whatever problem folks think afflict individuals as they engage in commercial activity (e.g. exploitation, discrimination, biases, market power, externalities, information asymmetries, etc.) also afflict them in any other interaction they may have, especially the political sphere. I vomit in my mouth every time I have to read that this new belief in interventionism and planning is “empirically based” … it’s not. For starters, an empirically based defense of intervention would have to recognize the limits to empirical knowledge in any of the social science. People are quite selective about what empirical “facts” they choose to adopt as evidence for their view. And to understand that this is raw state worship / elite worship masquerading as science, just ask someone to, “name one reform you would like to see that increases the individual sphere of action” that you think will improve some social outcome? You’ll get crickets. Or how about those favoring stimulus? Ask them to name, NOW, what conditions would have to be met for there to be fiscal contraction. Has Krugtron ever written in the last 20 years, that now the New Keynesian models are recommending cuts in government spending? If not for 20 years, then what kind of a science are we talking about?
Finally, I’d like to see a Steel Man evaluation of “classical, old, mainstream, economic ideas.” For example, this is complete and utter bullcrap:
“free markets are always the best”
it recognizes that these won’t always work
Both are disingenuous. Who’s running around saying, “free markets are the best?” The best, meaning, what, exactly? You can’t say anything is the best unless you tell me what we are trying to evaluate. And since this new thought in economics is oh, so grounded in empirics, then we should be able to hear what outcome we are talking about, because there are in fact answers. Is the goal global poverty relief? Is the goal environmental remediation? What is the goal? And further, aside from a very small minority, who is saying ALWAYS the best? Really. Show me a quote, play me an audio clip. It’s simple minded click-baity BS. Similarly, it’s disingenuous to say, “yeah, our side recognizes that planning doesn’t always work.” Really, well now we are in an argument about what “not always” means. Once in 10 tries? Once in 1,000? It matters.
It would also be nice if folks just staked their positions out instead of trying to cloak them up. My mental model is progressives are for anything that isn’t “scary-tale versions of capitalism” based on what some ideologue 5th grade teacher told them about World War 2 ending the Depression, FDR saving America, labor market regulations designed to help the worst off, where our prosperity comes from, the role the robber barons played, etc. and the “right” is for anything other than what progressives seem to be about. I do not think either is actually very much principled. If they were. then at least say, “I am for liberty in every aspect and every regard even if it produces some outcomes which may seem reprehensible, and here is why …” or “I am for the elites running things, or I am for industrial planning, even if it has produced historical global horror stories, and here is why …” But we can’t even get that. Just a lot of dressed-up gobbledegook.
I’ll go on record here, just once. My preferred form of economic and political organization would very likely lead to a very messy world, which in many ways would be “worse” than the world we live in. Yet I still prefer it. But that in no way guides my reading of, and presentation of, what we actually know about economics, which in my view is at best suited to showing what not to do, and explaining patterns, than it is to do much of anything else.