July 2, 2013

Beside the point

Comment on Edward Fullbrook on 'Doctor X, “pure shit” and the Royal Society’s motto'


The Dr. X story is reminiscent of Joan Robinson: “Indeed, in the higher reaches of the profession, there was something of the atmosphere of the augurs touching their noses behind the altar. Amongst themselves, they admitted it was not really like that. But their pupils took it all literally. They formed an official opinion deeply influenced by the conception of equilibrium which could be relied upon to establish itself provided that no one tried to interfere.” (1972, p. 3)

Why are stories like these told and retold again? We know from history that conspiracy theories are stupid in the best case and harmful in all others. There is no excuse in the political realm to bring these kinds of arguments into circulation, much less so in scientific discourse. As Schumpeter put it:
“Remember: occasionally, it may be an interesting question to ask why a man says what he says; but whatever the answer, it does not tell us anything about whether what he says is true or false.” (Schumpeter, 1994, p. 11)

Yes, neoclassical economics is a failure. How can we be sure of it? Because neoclassicals themselves told us: “The enemies, on the other hand, have proved curiously ineffective and they have very often aimed their arrows at the wrong targets. Indeed if it is the case that today General Equilibrium Theory is in some disarray, this is largely due to the work of General Equilibrium theorists, and not to any successful assault from outside.” (Hahn, 1980, p. 127)

Hence, neoclassicals stick to the scientific code of 'conjecture and refutation.' They have explicitly put forth hypotheses and followed their logic until the final conclusion of Sonnenschein-Mantel-Debreu.

It is well known that science is a trial-and-error process. Therefore it is quite “legitimate” to put forth and defend a “wrong” theory because we cannot know in advance whether a theory is true or false.

The problem in economics is peculiar because we know that the standard theory as codified in the textbooks is wrong, but we had until now no alternative. Heterodoxy is since Veblen occupied with debunking. There is nothing wrong with this but, obviously, from this has not emerged a convincing alternative: “... we may say that the long-lasting success of our categories and the omnipresence of a certain point of view is not a sign of excellence or an indication that the truth or part of the truth has at last been found. It is, rather, the indication of a failure of reason to find suitable alternatives which might be used to transcend an accidental intermediate stage of our knowledge.” (Feyerabend, 2004, p. 72)

The provisional predominance of neoclassics in the classroom is neither due to scientific superiority nor to a conspiracy, but to a failure of reason to find a convincing alternative.

Egmont Kakarot-Handtke

Feyerabend, P. K. (2004). Problems of Empiricism. Cambridge: Cambridge University Press.
Hahn, F. H. (1980). General Equilibrium Theory. Public Interest. Special Issue: The Crisis in Economic Theory, 123–138.
Robinson, J. (1972). The Second Crisis of Economic Theory. American Economic Review, 62(1/2): 1–10. URL
Schumpeter, J. A. (1994). History of Economic Analysis. New York: Oxford University Press.