I have a blog under the above title on The Conversation website this morning. The piece was written last week, although minorly updated last night, and is my first comment as Professor of Practice in International Political Economy at City University on The Conversation site, which was reserved exclusively for academics.
I suggest quick visit to the site to read the whole thing, but my core argument is that economists are not an independent, exogenous variable in the process of measuring and commenting upon the economy but are instead an endogenous variable whose own impact on economic policy has to be appraised and measured by assessing the motivation for the questions they ask, the measures they propose and the way in which those measures are constructed and interpreted.
The result is that I argue that there is no such thing as an objective, observing economists: the very process of measurement and comment in which they engage has impact on the economy.
In that case I argue that economists have a duty, not least because many are publicly funded, to engage more explicitly in policy discussion with politicians, and that I hope Jeremy Corbyn will provide them with that opportunity. It would be good to see that happen.
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Excellent post & similar arguments to those made in a recent book I was involved in co-editing on the Politics of evidence and results in international development: http://www.ids.ac.uk/publication/the-politics-of-evidence-and-results-in-international-development-playing-the-game-to-change-the-rules.
Also, I just came across this post, which I rather liked, except Rodrik does not go far enough and pick up on important points you make. He criticises economics training for not properly equipping students for the empirical diagnostics that the discipline requires, however he did not state clearly enough the need for critical reflexivity about how their backgrounds and ideology influence their choice of questions and diagnostic tools. https://www.project-syndicate.org/commentary/economists-versus-economics-by-dani-rodrik-2015-09.
Thanks
Appreciated
As I have long appreciated the work of IDS
careful with those acronyms-Richard! (Smiley emoticon) Don’t want to give the wrong impression!
Ian Duncan Smith?? :0
Interestingly enough IDS did not want to be associated with the self organised group that started a Pushback against the results agenda in 2010 that was the genesis of the book as we were considered too radical. But once we started to provide a useful alternative voice that less radicals could use, we gained wider acceptance. What is fascinating is that some ideas perceived quite radical in 2010 are now becoming far more mainstream.
Having said that there is lots of great thinking and people at IDS and the Uni of Sussex working on political economy, unruly politics, etc.
It would certainly be interesting to see the reaction and stance taken by those practitioners of an academic discipline that falsely pretends it is a science to themselves, at long last, be subject to the scientific method.
Having to take on board the concepts underpinning the Scrodinger’s cat thought experiment when they are so used to presenting reductionist based models as naturally occurring phenomena may well be too much for many of them. It would seem reasonable to anticipate a mass outbreak of cognitive dissonance.
John Doyle on that blog made a very valid comment that, in effect, the brainwashed public could not cope with a full frontal attack on the pervading neolib economic consensus.
With such a massive increase in Labour Party membership & therefore potential ‘boots on the ground’ surely a grass roots education campaign is possible:
Richard, would it be feasible (definitely desirable) if you could put together some simple primers on PQE, the falsehoods regarding debt & deficits spread by msm – with their rebuttals, so that 1stly the new LP activists can become confident of the arguments & countering objections, & 2ndly simple presentations of same can be developed & used across the country by the activists in meetings/local media/ workhops/village halls/ student unions etc to gradually inform and educate the public that TIAN?
I have followed your blog for years in order to inform & educate myself (thanks, by the way!!!); however, despite this & an MBA & donkeys yrs in the corporate world, I would not have the confidence to be able to make such a presentation and deal with the objections without some further ‘training’ to pull all the various strands together. I get the impression that a number of your regular readers feel the same. I know in my head where all the interlinks are – but that is not the same as being able to promote the ideas with your confidence. But I would love to be able to do so. It is imperative that the new narrative is delivered both simply and inspiringly to counteract the deeply ingrained false perceptions. And on a positive note, we DO have a couple of years to do so & we know Osbornes economics are sure to implode in the near future.
I suspect I may not have time to do that
But I am open to others doing so and providing publicity
Those with the skills out there?
PS I know there are some: most are too long at present
Snap Windsorlass! I’ve been thinking about the need for a grassroots economics education campaign all week – since Cooper’s closing comments at the Sky debate and am interested in contributing though I don’t have a sound enough grip on the minutiae of the economic arguments to play much of a role. But it is worth thinking if and how we might do this drawing on skills of tech savvy student activists amongst others… let’s keep talking…
Please do
Richard, I fully understand your lack of time – in truth, not expecting you personally to so do – more a desire to signal that imo, it needs to be done and will be vital to making the change when the msm is so captured.
Katy – i’ve already got an idea of a grass roots and social media outline programme & methodology in my head (clearly need to get out more!)- its just selecting hard hitting, digestible content that blows my confidence. This is a ‘get it wrong’ instance that would be incredibly damaging. There are people out there with some great visual skills who are using them to debunk neoliberal myths – such as the rippedoffbritons blogspot – who may be thinking the same things and would be delighted to get on board.
Richard, may I prevail on you to let Katy have my email addy please? Thanks.
You can count me in – engineer & MBA (specialised in “applied deviousness” for some reason the lecturer jokingly also called it international taxation – which we as students found puzzling). Some of my best friends are economists (eg Jacques Delor’s EMU advisor). Happy for Richard to release me e-mail to those that want to do something.
Shared as instructed
Katy and windsorlass. I’ve been arguing on Richard’s blog for similar things. Please could you include me in your exchange if Richard will exchange our e-mail contacts. I’m not an economist, but have been trying to get up to speed with the debate for several weeks now. Perhaps we can exchange ideas on how to get some of these ideas going. Trevor
Done
Richard-any chance of including me in the e mail share-happy to get involved in education issues and alternative economics?
Thanks
Passed on
Vital as the education and response enabling process is there’s also the soundbite war. You have the timeless classic ‘money doesn’t grow on trees’ and the devastating ‘socialists always run out of other peoples money’. These are ingrained in the minds of even the most economically illiterate of the population. Countering with MMT or explanations of how much cost, particularly at the top end, is still socialised will generally be met with blank stares or outright disbelief. The Tories and the MSM are well aware that if you throw enough mud some will stick and facts/truth be damned. I’ve already heard people repeating the ‘threat to security’ a ‘leftwing’ Corbyn led government would be.
See, I’m already demonstrating how hard it is not to get longwinded and lose peoples attention. I don’t think it’s a case of hearts and minds, I think we deep down have the hearts already. But the minds have been under assault for so long they don’t even see it as assault anymore. The fear factor is the biggest hurdle, from fear of change right through to fear of national meltdown.
I used to work in education and agree this work is vital but you are right to point out that the public will be wary of it as, daily, they are submerged in myths propagated by vested interests and will not easily see that the scope of human freedom is much greater than they think-nor do many realise they have been living in a one party state for so long.
You can’t bombard people with these new ideas bu some sort of selective slow release is needed.
If the Tories could convince people that it was the poor and vulnerable who were responsible fro economic problems I’m SURE we should be able to re-direct the narrative. In fact it’s started already with the Corbyn election. Like you, I don’t have the academic background to give me confidence to speak on these themes and hold it together coherently but I’m sure with team-work and mutual support it would be possible.
Richard can’t do everything! I was thinking of writing to Corbyn to suggest something along these lines . maybe if we all write it could get through! I hear that Varoufakis might be advising Corbyn-this sounds good! He understands money. When people work together much is possible.
Stephanie Kelton, Peter Cooper and Douglas Alexander are the academics who I find best equipped to demystify modern fiat monetary systems in relatively simple terms. Perhaps the Corbyn team could be persuaded to contact them to see if they would be prepared to put together a straightforward and basic training package to first train selected Labour Party members and then for those members to offer workshops for the general public. Something has to be done because the level of ignorance amongst the UK electorate about how their monetary system really works is appalling making them vulnerable to Blue and Red Neoliberal politician mountebanks or “snake oil” sales people.
Oops got Alexander Douglas’s name backwards. Apologies!
Alexander Douglas’s book “The Philosophy of Debt” coming out 7th December 2015:-
http://www.amazon.co.uk/Philosophy-Debt-Economics-Social-Theory/dp/1138929743/ref=sr_1_1?s=books&ie=UTF8&qid=1442247375&sr=1-1&keywords=Alexander+Douglas
I totally agree that grass roots education for everyone is really necessary and that includes some MP’s and journalists who don’t understand the principals of Green QE and peddle their views with no one calling them to account. Everyone has latched onto the “Tom & Jerry” show and a leading story is how Jeremy Corbyn thinks he can fund some of his ideas with the £120 Billion collected by clamping down on tax. How are they allowed to get away with this lie ? This is something that is so damning to any possibility of new change and working together. These are the important messages that people like Richard should be challenging. I know you are not affliated to any party, just the truth of your beliefs, so please speak up.
The result is that I argue that there is no such thing as an objective, observing economists: the very process of measurement and comment in which they engage has impact on the economy.
…this sounds very much like Schrodinger’s Cat – quantum economics, anyone?
I’m not hard to rumble….
And yet no one ever seems to say it
In all my years as an accountant, for example, it’s only ever been Prem Sikka who has been saying this sort of thing
So if I offered the obvious, I make no apologies
it’s not obvious Richard and I’m glad you said it because it’s not often said outside the world of physics and mysticism! As Krishnamurti used to say: ‘The observer IS the observed.’ See: http://o-meditation.com/2011/10/24/the-observer-is-the-observed-osho/
Supporters of status-quo like to bamboozle others with technical stuff. But no technique is sacrosanct, natural or inevitable. All are constituted by politics and hence can be changed. This is not to deny that there are facts, but facts themselves are constructed by politics. There is very influential line of work here by Michel Foucault, in case someone wants to supplement their reading of Marx.
Just wanted to agree with Prem Sikka about the relevance of Foucault for this debate.
Quite. A good start would be to call out the majority of practitioners in this field on their propensity to pre – assume what they are trying to deduce. That would certainly collapse most of the snake oil models they are always trying to sell us as TINA.
That, or our gracious host is showing a deft political touch, and being carefully polite in saying that the economic act of observation changes what economists observe; he is carefully *not* saying that the economic fact of paying an economist will change what they observe.
And neither he nor I would ever imply such a thing.
(I, of course, would say it quite directly, and point to the exceptions, Krugman being the most prominent).
That’s just what I thought when I read that sentence!
Richard,
One of the biggest areas of concern is the fact that the UK is watering down the proposals to restrict the non-audit services that auditors can provide. What happened to auditor independence? How can it be right that the audit firm can provide services (like tax advice) to their audit clients – you can say they have safeguards, but practically there will be undue pressure.
This has long been an area of concern for me
And me too, Richard, although coming at it from the management consultancy angle rather than accountancy (see “Experts” and E-government: Power, influence and the capture of a policy domain in the UK, Horrocks,I. 2009. ‘Information, Communication and Society’).
But of course, this is only one aspect – albeit and incredibly important one – of the web of power, influence and control that has increasingly come to dominate the actual (as opposed to what governments encourage us to believe) policy process in the UK and indeed across much of the English speaking world (eg. Australia, the US, and so on). I’ve long believed that most people would be shocked if they knew what the reality of public policy formulation is nowadays. And particularly so where you have governments – as here and in Australia and New Zealand – who dogmatically follow the (ideological) line that commercial interests have primacy in any policy domain, be that housing, environment, transport, social care and so on). Indeed, looking at developments across the various advisory and consultative arrangements in UK central government that the previous government ushered in, and now consolidated by Cameron and co, it’s clear that not only do commercial interests have primacy but in most cases they have exclusivity. In short, they are the only so called “stakeholders” that matter.
On a related note, now Corbyn is leader of the Labour party one thing he needs to do is instigate a review of public policy and public administration which addresses this issue. You’ve rightly made the case for an Office for Tax Review/Responsibility. And going back a while now we’ve both made the case on your blog for a full review of the management and operation of HMRC. But without a far wider and deeper review of how the mechanisms and management of public policy and public administration in UK government and public services have been corrupted to the exclusive formulation and delivery of a neoliberal agenda any reformist agenda Corbyn might have (assuming he might one day be in government) is absolutely doomed. Every policy, every development, every initiative, will be blocked, stalled and undermined at every turn.
So, while I fully support progressive thinking on the political (input) side of the UK polity, we need an equal measure of review and progressive thinking on the output/delivery side too.
If I get a chance to push that tax angle now I would be keen to do so
But so too are many in the profession
This is an open door with them
Interestingly the 1930s legislation that created the SEC had a provision that the SEC itself should audit listed companies as after the 1929 crash Roosevelt was not too happy with private sector auditors. The SEC’s first Chairman Joseph Kennedy, under pressure form big corporations and accounting firms, reneged on that. The current audit model is flawed. It expects one bunch of private sector entrepreneurs (accountancy firms) to invigilate another (directors). Auditor appointment and fees depend on directors. Anyone upsetting directors/clients will not get promotion or increment and will be fired. This audit model can’t produce independence, or responsible audits.
More here http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.379.805&rep=rep1&type=pdf
If you want audit independence you need to completely avoid a situation where the company being audited pays and selects the auditor. There may be an argument that companies of national importance should be subject to a charge that then pays for a public body to conduct the audit. One could argue that any PLC would fall into that category.
This might sound radical, but is it really any different to a bank being forced to pay a regulator like the FSA to regulate them?
Would this have other benefits? For example reducing the need for HMRC inspections (a saving for some businesses) or even triggering an inspection in suitable cases. Would private investors and employees find it easier to rely upon the contents of an audit?
Of course when something went wrong (which seems inevitable) fingers would be pointed at the public sector and there would be no competition over audit costs.
The Conversation site, which was reserved exclusively for academics
I don’t understand what you mean here, please could you clarify?
You can only write if you are an appointed academic
Ah, I see. Thank you.
Speaking of academics, I am off the topic but on the weekend I came across a story on SSRN by Robert J. Bloomfield on “How to Be a Good Professor” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2656871
A disappointingly narrow hypothesis, I think
Outbreaks of illiteracy already from a member of the shadow cabinet claerly wanting to humour the vox populi:
“Heidi Alexander, a relatively new MP, is the new shadow health secretary.
Alexander, a former whip, has helped establish the “Red Shift” group set up in the wake of the election defeat, calling for the party to show that it understood that “money did not grow on trees”.
Does it never end! She needs to say the opposite that it DOES grow on trees but only the financial sector plucks the low hanging fruit!
A good article Richard.
I’m not sure if I see it in quite the same way but we do reach the same conclusions. My Marxist background has always led me to believe that a country is “living within its means” providing it is not consuming more goods and services than its workers are capable of providing from the natural resources that are available at the time.
Until I discovered MMT I was of the opinion that a capitalist economy wasn’t capable of getting anywhere near the best out of what was available to it except under conditions of wartime direct control – which isn’t really capitalism anyway. Now, I think it might be possible but we’ll see.
When we see supermarkets replace checkout staff which automatic readers, and bank tellers by ATMs etc we should all think – Good! That’s one boring job which doesn’t need doing and it will free up someone to do something else which is maybe not so boring and more useful.But of course we don’t. We ( or at least I do) think that those ex-checkout staff and ex-tellers are probably now in the unemployment queues or working in a ZHC lowly paid job somewhere.
That’s because the economy still isn’t run on sensible lines and for the benefit of all. ie including supermarket check-out workers. Hopefully Mr Corbyn can help fix that.
First off can the proposed educational tool be used to try and educate Labour MPs. Their economic illiteracy is a nightmare.
Bill Mitchell has just published an article today saying the same:-
http://bilbo.economicoutlook.net/blog/?p=31867
It’s not very accurate though
Richard- would you be able to comment on the bits with which you agree / disagree with Bill Mitchell’s blog?
Do you have minor quibbles with his summary of the Thatcher/Blair period? Do you think the major thrust of his analysis is wrong? Or do you disagree on tactics suggested for the future?
If I have understood your and his previous work, you seem to differ most when it comes to the descriptions of what is recommended. He sees a change in the language of economics as a prerequisite for breaking the Neo-liberal mindset, whereas you focus on promoting policies that, to those that pay attention, question the same assumptions.
Is this a fair summary? Do you believe he is ‘not very accurate’ in his criticism of the timidity of the emerging UK debate?
Trevor
Would love that time
Broadly I think Bill just too negative
The glass is fuller than Bill often thinks
Richard
Bill’s conclusion:
“That is plenty of time to start the process of re-education which will force a change in the public debate because then the conservatives will have to explain why fiscal surpluses are desirable rather than just asserting their view and reinforcing the lack of credible explanation with a series of metaphors that play on our ignorance.”
I think Bill’s message of how language manipulation creates subconscious ‘consilience’is vital and goes back to Bernays’ and ‘manufacturing consent’.
Given the reach of corporate lobbying and revolving door influence on the body politic I would imagine that the well known words of the late Upton Sinclair would probably apply:
“It is difficult to get a man to understand something when his salary depends on him not understanding it.”
Coupled with the immense inertia generated by years of indoctrination in which the personal psychology of so many is held together by a faith based model masquerading as the only possible way I would suggest this would be like casting pearls before swine.
It is just not possible to educate pork. You might just as well try polishing a turd.