Danielle Allen on the dangers of economics as the master discourse

December 03, 2019

A brief post:

Not sure I buy this totally, but it's worth considering:

In the late 20th century, economics established itself firmly as the queen of the policy-making sciences. Up until then, before the emergence of digital computing power and the spread of numbers-based social science, people who were trained as lawyers, not as economists, had dominated policy making. The shift is documented in recent research by the sociologist Elizabeth Popp Berman. The difference in outlook between economists and lawyers is immense. Whereas economists seek out rules that are in theory universal—mathematical principles that apply everywhere, and are blind to context—legal thinking is fundamentally about the institutions of specific societies and about how institutions actually work in specific situations. This is not to say that we can always count on lawyers to see real people or that lawyers went away. The point is that a different way of thinking—emerging first in economics—has ascended across a wide range of professions.

In the utilitarian model that dominates economics, the goal of policy, in an abstract, mathematical sort of way, is to maximize happiness—or, to use the jargon you won’t hear at most dinner tables, “utility”—for members of a society in the aggregate. In its crudest form, the effort to maximize aggregate utility relies on cost-benefit analyses linked not to the conditions of actual communities—small-town Nebraska, working-class Ohio, rural Mississippi—but to broad national measures of expenditure, income, and wealth. This way of thinking, detached from popular debate, has spread worldwide. It is evident in the behavior of central banks and in the demands made of developing countries in return for aid. It is linked to policies intended to enhance the size and efficiency of markets and create an integrated, “frictionless” global economy. The policies have done that, and helped many. But they have also disrupted the world’s labor markets. They helped sink the Rust Belt and contributed to unprecedented levels of mass migration. At the same time, the unregulated behavior of the powerful financial sector brought on the Great Recession of 2008, which devastated ordinary Americans and for which virtually no one was held to account.

The kinds of economists involved most intimately with government and financial institutions by and large don’t notice real people in real places—people who may be losing jobs and falling into despondency, addiction, and suicide. They tend not to see as relevant to their domains of expertise the millions of people on the move and the impact of mass migration on cultural cohesion. In recent years, they overlooked the warning signs indicating limits to the acceptance of their worldview, notably in the very communities suffering because of their economic policies. Elites on both the left and the right, with their well-thumbed passports and multicultural outlook, were no less blind. They did not see the pressures rising. In the immediate aftermath of the 2016 presidential election, I more than once heard an economist friend say something like the following: “We knew globalization would force transformations, but we never thought they would be localized in a specific subset of communities.” And: “We knew that globalization would cause disruption over a 20-year period, but I never thought about what 20 years is like in the life of a specific person or community.” The very language conveys remoteness—the sheer size of the chasm between the World Economic Forum and the actual world. This is what happens when the messy, mediating business of popular politics no longer functions properly—when it no longer serves as the membrane through which ideas must pass before they turn into action.

That's very nice: "The very language conveys remoteness," and popular politics, and the vivid reality of actual human beings, "no longer serves as the membrane through which ideas must pass before they turn into action."  Again, not sure I wholly agree, but (again, again), I do think there's something right about it.

 

Check it out.