No, economics departments are not full of right-wing ideologues

Guardian columnist Seamus Milne seems to think that some kind of academic spring is going on in economics departments:

From any rational point of view, orthodox economics is in serious trouble. Its champions not only failed to foresee the greatest crash for 80 years, but insisted such crises were a thing of the past. More than that, some of its leading lights played a key role in designing the disastrous financial derivatives that helped trigger the meltdown in the first place.

Plenty were paid propagandists for the banks and hedge funds that tipped us off their speculative cliff. Acclaimed figures in a discipline that claims to be scientific hailed a “great moderation” of market volatility in the runup to an explosion of unprecedented volatility. Others, such as the Nobel prizewinner Robert Lucas, insisted that economics had solved the “central problem of depression prevention”.

Any other profession that had proved so spectacularly wrong and caused such devastation would surely be in disgrace. You might even imagine the free-market economists who dominate our universities and advise governments and banks would be rethinking their theories and considering alternatives.

After all, the large majority of economists who predicted the crisis rejected the dominant neoclassical thinking: from Dean Baker and Steve Keen to Ann Pettifor, Paul Krugman and David Harvey. Whether Keynesians, post-Keynesians or Marxists, none accepted the neoliberal ideology that had held sway for 30 years; and all understood that, contrary to orthodoxy, deregulated markets don’t tend towards equilibrium but deepen the economy’s tendency to systemic crisis.

Alan Greenspan, the former chairman of the US Federal Reserve and high priest of deregulation, at least had the honesty to admit his view of the world had been proved “not right”. The same cannot be said for others. Eugene Fama, architect of the “efficient markets hypothesis” underpinning financial deregulation, concedes he doesn’t know what “causes recessions” – but insists his theory has been vindicated anyway. Most mainstream economists have carried on as if nothing had happened.

Many of their students, though, have had enough. A revolt against the orthodoxy has been smouldering for years and now seems to have gone critical. Fed up with parallel universe theories that have little to say about the world they’re interested in, students at Manchester University have set up a post-crash economics society with 800 members, demanding an end to monolithic neoclassical courses and the introduction of a pluralist curriculum.

As one would expect from Milne this is all rather overstated. Academic economists are not all free market fanatics. I’m not aware of any British studies but research from America suggests that 75% of economics professors vote Democrat.

I took first year economics back in 2007/08 as the credit crunch was beginning to bite. Therefore, the curriculum I learnt was written before the crisis. And yes, As Milne would have suspected it was very neoclassical. However, that doesn’t mean what he thinks it does. The macroeconomics we were taught reflected what was called the “neoclassical synthesis” which was essentially Keynesian economics expressed using the mathematical models of neoclassical economics. And our microeconomics courses included a large section which explored why markets often produce undesirable consequences by looking at the incentives of the agents involved. In short what I learnt was neoclassical in terms of its methodology but could lead to a variety of political interpretations.

Is there an argument for a wider variety of methodologies? Absolutely. I dropped economics after my first year in part because I was frustrated with the limitations of the prevailing mathematically driven approach.* I have over time come to think there is much to be said for behavioural economics does away with the assumption that humans are ‘rational‘, and instead uses insights from academic psychology to build its models. However, the existence of other schools of economic thought is not an argument against an undergraduate curriculum that focuses on neoclassical methods. Any wannabe iconoclast ought to know what they are setting out to smash.

In fact, I’d suggest that other social sciences are in greater need of an overhaul than economics. That mathematical modeling that so annoyed me has its benefits. As Paul Krugman – one of the economists who Milne cites (incorrectly) as an outsider – explains:

Economists may make lots of bad predictions, but they do have a method – a systematic way of thinking about the world that is more true than not, that gives them genuine if imperfect expertise. (That is also, of course, why lay commentators and other social scientists tend to hate them). Other social sciences haven’t yet found anything remotely equivalent. Oh, there are bits and pieces, and some of them are very exciting; try taking a look at Robert Axelrod’s stuff. But basically when it comes to most of the questions that I am really interested in, one man’s view is as good as another.

And far from being a discipline that crushes ideological dissent economics actually embraces considerably greater political diversity than the rest of the social sciences. The research I cited earlier about the politics of academics, shows that there are significant numbers of both right and left wing economists. By contrast, 21 out of 22 sociology and anthropology professors vote Democrat. I would therefore suggest that the softer social sciences need to examine their political biases and methodology more urgently than economics.

*And also because I failed my mock exam but let’s not dwell on that.

There was no Kennedy conspiracy

Fifty years ago today  a shooting in Dallas left US president John F. Kennedy dead and Texas Governor John Connally injured. 3 in 4 Americans believe that this was the result of a conspiracy. They are wrong.

In this article for Slate, Fred Kaplan – himself a former conspiracy theorist – argues that the evidence that Lee Harvey Oswald acted alone is overwhelming. Even the most apparently convincing evidence otherwise dissolves under proper investigation:

At first, it was assumed that Kennedy and Connally had been hit by separate bullets. But the Zapruder film threw a wrench in that notion. The Warren Commission’s analysts concluded that JFK was shot sometime between Frames 210 and 225 (a street billboard blocked Zapruder’s view at the crucial moment), while Connally was hit no later than Frame 240. In other words, the two men were hit no more than 30 frames apart. However, FBI tests revealed that Oswald’s rifle could be fired no faster than once every 2.25 seconds—which, on Zapruder’s camera, translated, to 40 or 41 frames. In short, there wasn’t enough time for Oswald to fire one bullet at Kennedy, then another at Connally.

The inference was inescapable. Either there were at least two gunmen—or Kennedy and Connally were hit by the same bullet. The Warren Report argued the latter. The “single-bullet theory,” as it was called, set off a controversy even among the commissioners. Three of them didn’t buy it. Under political pressure to issue a unanimous report (preferably one reassuring the American public that there was only one gunman and he was dead), the skeptics stifled their dissent, at least publicly; in exchange, the report’s authors toned down their assessment of the single-bullet theory from “compelling” (the first draft’s term) to merely “persuasive.”

That section of the Warren Report drew the most biting attacks. Critics drew diagrams tracing the absurd path that a bullet would have had to travel—a midair turn to the right, followed by a squiggly one to the left—in order to rip through Kennedy’s neck, then into Connally’s ribs and wrist.

For many years, long after I’d rejected most of the conspiracy buffs’ claims, the “magic bullet”—as critics called it—remained the one piece of the Dealey Plaza puzzle that I couldn’t fit into the picture; it was the one dissonant chord that, in certain moods, made me think there might have been two gunmen after all.

Then, in November 2003, on the murder’s 40th anniversary, I watched an ABC News documentary called The Kennedy Assassination: Beyond Conspiracy. In one segment, the producers showed the actual car in which the president and the others had been riding that day. One feature of the car, which I’d never heard or read about before, made my jaw literally drop. The back seat, where JFK rode, was three inches higher than the front seat, where Connally rode. Once that adjustment was made, the line from Oswald’s rifle to Kennedy’s upper back to Connally’s ribcage and wrist appeared absolutely straight. There was no need for a magic bullet.

But the idea of a conspiracy has an appeal. For all its practical unlikelihood, at an emotional level it still seems more plausiable than the alternative:

As the old adage has it, “Big doors sometimes swing on little hinges.” John F. Kennedy’s murder was a big door—had he lived, the subsequent decades might have looked very different—and Lee Harvey Oswald was a preposterously small hinge. The dissonance is wildly disorienting. It makes for a neater fit, a more intelligible universe, to believe that a consequential figure like John Kennedy was taken down by an equally consequential entity, like the CIA, the Mafia, the Soviets, Castro … take your pick.

Now it could be argued that who was responsible for a shooting half a century ago is now just a historical curiosity like who killed the princes in the tower. Yet it still matters. David Aaronovitch argues in his book Voodoo Histories, belief in a particular conspiracy theory is often a gateway into a worldview riddled with implausible plots. He cites the example of 9/11 truthers who trace their involvement with the movement to their conviction that their was a plot to kill Kennedy. And as Aaronovitch warns this has nasty consequences:

Aaronovitch says conspiracy theories are fashionable across the globe. And while the one your neighbor insists upon — that the fluoride in the drinking water is actually a mind-control experiment by the government — might be a harmless variation, some have serious consequences.

“If you are to travel in Pakistan, for instance, you will find that a significant proportion of the educated Pakistanis believe that George Bush brought down the twin towers,” says Aaronovitch. “And that makes dealing with the [Pakistani] Taliban difficult because they actually don’t believe the fundamental premise on which the war against terror was waged.”

Update: this post initially stated that Governor Connolly had been killed in the shooting. This was drafting error and I had meant to say he was injured. I’ve now corrected the text. Thanks to Paul Walter for spotting this.