All-powerful economists?

There are really two separate books rubbing shoulders in [amazon_link id=”0857284592″ target=”_blank” ]Economists and the Powerful: Convenient Theories, Distorted Facts, Ample Rewards[/amazon_link] by Norbert Häring and Niall Douglas.

One of them is a clear and well-made case that modern economics has been in error in ignoring the part played by institutions, politics and power relations in actual economies. It has chapters covering the acquisition and abuse of power by the financial services industry, the distortion of business in the interests of executives rather than customers, employees or shareholders, and the increasing concentration of the US economy through merger waves. Although many or most professional economists who work in business or regulators or consultancy have always been well aware of institutional detail, I think it is fair comment that academic economics overlooked the reality of markets and economies for too long. I’d also add that this has been changing quickly, with the rise over 20 years of institutional economics, behavioural economics etc (see [amazon_link id=”0691143161″ target=”_blank” ]The Soulful Science[/amazon_link]) – but there is further to go.

The second book within this set of covers is more tendentious. It is a history of economic methodology in the first chapter (I must say, I’d have put this at the end if I’d been the author). While the authors land some punches, and make some good points about the way theory shapes reality (see my Tanner Lectures on this question of performativity), they are too conspiracy theorist about it. The original spin-meister Edward Bernays is wheeled out, along with the Inside Job accusations that the financial crisis came about because some economists were paid to write a report by the Icelandic government. Although many economists in universities do paid consulting work – and should certainly declare it when they publish their work – I don’t believe there is signficant distortion of what gets published as there seems to be in the case of pharma companies and medical research. The economists simply have a much wider choice of options, and are not beholden to one set of powerful business interests. There would be something interesting to say, nevertheless, about the narrowing of economic research as published in mainstream journals – I just don’t believe it’s as crudely marxist as suggested here. Similarly, the way economic theory and practice developed from the 1940s to 1980s was certainly bound up with the wider ideological/political climate (like any social science discipline is sure to be), but not in such a purposive way. I think the messy sociological reality of the profession would be far more interesting to understand than the ideological, top-down assertions presented in this book.

Still, it’s an interesting read. The argument that marginalism, the refusal to compare individuals’ utility and rational choice added up to the inevitable demotion of interest in economic institutions is quite interesting. Besides, I’m all in favour of economists continuing to introspect for at least as long as the world economy remains in such a fragile state.

[amazon_image id=”0857284592″ link=”true” target=”_blank” size=”medium” ]Economists and the Powerful: Convenient Theories, Distorted Facts, Ample Rewards (The Anthem Other Canon Series)[/amazon_image]

Woolly complexity

It has taken me a while to get round to reading Stuart Kauffman’s [amazon_link id=”0465018882″ target=”_blank” ]Reinventing the Sacred: A New View of Science, Reason and Religion[/amazon_link]. Although I was looking forward to reading one of the gurus of complexity expound on the meaning of life, culture and technology, the mention of religion in the title must have rung some kind of subconscious warning bell. For I found the book an infuriating mix of interesting reflections on complexity – particularly why it should warn us against being too reductive, or locked into interdisciplinary silos – and woolly philosophy. Actually, it’s a book about why science is not only compatible with spirituality but should drive us to spirituality and belief in God. While perfectly happy for anybody else to worry about reconciling science and the sacred, I’m just not that interested in it.

There is a chapter on the economy that skates over the application of evolutionary theory and complexity to economics. This is brief and may be a handy introduction for anyone who knows nothing about this subject. If you do, it will be very familiar. Inevitably for a book with extremely broad scope, it lacks depth.

In terms of the underlying hypothesis about the dangers of being reductive, this book suffers by comparison with another one I’m currently reading, [amazon_link id=”0300188374″ target=”_blank” ]The Master and His Emissary [/amazon_link]by Iain McGilchrist. By contrast to Reinventing the Sacred, it’s a real doorstop of a book, and goes in depth into the human brain as well as many aspects of human culture. It’s a shame – I enjoyed Kauffman’s other book [amazon_link id=”0195095995″ target=”_blank” ]At Home in the Universe: The Search for Laws of Self-Organization and Complexity[/amazon_link], and he has obviously been a massively influential thinker in introducing these ideas to the way we analyse social as well as biological phenomena.

[amazon_image id=”0465018882″ link=”true” target=”_blank” size=”medium” ]Reinventing the Sacred[/amazon_image]

In two minds

I’m part-way into a book that’s going to take me ages to read – 460 pages of detailed argument in a hardback so heavy that I can only read it in bed resting on a pile of cushions. But I can tell it’s going to be worth the effort. The book is Iain McGilchrist’s [amazon_link id=”0300188374″ target=”_blank” ]The Master and His Emissary: The Divided Brain and the Making of the Western World[/amazon_link]. This is an interim report. (It is out in paperback this autumn, and I might need to get that and return the borrowed hardback – I say this even as a devotee of the physical artefact!)

The book is both heavy-going (because of all the scientific detail) and fascinating. What could be more fascinating than the way the human brain affects what we think and say and do, the way we organise our lives and societies, our culture? The author is a former consultant psychiatrist and expert on neuroimaging, and has also taught English at Oxford. This range of expertise is apt for the theme of the book, the entirely different perspectives and approaches of the two separate hemispheres of the brain. The left is focused, intent on detail, literal, unintuitive and so on, the right looks at the whole, is alert to what is new, looks at the broad rather than the narrow. This contrast is well-known in the popular understanding of brain science, although perhaps over-simplified.

The interesting argument made here is that increasingly in western culture the two halves are fighting each other, rather than working together as they need to. The left hemisphere is winning, moreover, to the detriment of culture and nature. I am still on the first, brain-focused, half of the book, and not yet the second culture-focused, second half. I’m therefore not in a position yet to assess the argument. It is an important one, though. To quote the introduction:

“An increasingly mechanistic, fragmented, decontextualised world, marked by unwarranted optimism mixed with paranoia and a feeling of emptiness has come about, reflecting, I believe, the unopposed action of a dysfunctional left hemisphere.”

And I’m also interested to see if Prof McGilchrist thinks we can help our right hemispheres fight back. An interestingly self-referential task.

[amazon_image id=”0300188374″ link=”true” target=”_blank” size=”medium” ]The Master and His Emissary: The Divided Brain and the Making of the Western World[/amazon_image]