Throwing Babies, Keeping the Bath Water
In a strangely vague and unspecific opinion piece at Reuters today, economic editor Edward Hadas lauds the CORE initiative to change economics teaching to “what it should be.” The only thing obvious about Hadas’ column is how well it fits in the same camp as the State Science Institute’s assessment of Rearden Metal in Ayn Rand’s novel Atlas Shrugged. There is a lot of critique of economics along those lines floating around, which only “notes” that economics has “failed” and that it “must change” and – it is implied – it must change in a certain very politicized (leftist) way.
We already know that leftists despise (or dismiss, depending on their purposes) economics. Indeed, so-called “Scientific Marxists” (ideologues) have long dismissed economics (the science) by stating that it is “ideology.” There is good reason for those wishing for forceful redistribution of wealth (or, which is simply an extension, the dismantling of prosperity and economic growth) to pretend economics has no relevance: it stands between them and their attempts at establishing their Utopia.
Hadas’ column says nothing of the sort, of course. He only refers to the “CORE” project and its aim to support “teaching economics as if the last three decades had happened.” The tag line sounds good, but I would be much more interested in teaching economics as if the last 70-80 years hadn’t happened. Then we would get back to the real core of economics and leave the futile empiricism of inductive neo-economics where it belongs – on the scrap heap of history.
The CORE project doesn’t make any ideological claims, at least not explicitly. Yet it is sponsored by progressive superstar and economic ignoramus George Soros and his Institute for New Economic Thinking, which might give us a clue. Their description of what economics teaching should be about, from the open-source book’s preface, might also give us an idea. Teaching economics, they state, is about
how we produce our livelihoods, how we interact with each other when we do this, and how we interact with nature
It sounds inoffensive, but it has an obvious leaning towards “sustainability” (sacrificing the production of value for fashionable yet ambiguous progressive concerns like social justice, environmentalism, and so forth). Note also the behavioral focus of this statement. “Behavioral” is generally a code word for the injection of psychological and sociological aspects rather than looking at actual behavior. Austrian economics and its distinct focus on human action is truly behavioral, for instance, but never accepted (or even acknowledged) by those doing “behavioral” economics.
Also note how the CORE project is an extension of the “post-crash economics” movement that aims at throwing out as many babies as possible while keeping the bath water. This movement is really just the age-old anti-economist leftist movement that we’ve seen before, but now they rely on the recent crisis and the failure of modern macroeconomics to predict it. The criticism of macroeconomic models is sound, but there are different ways to do it – and most of them are wrong.
CORE is a good example of how not to do it. If macroeconomic models were a failure, why do they focus on establishing new ways of teaching microeconomics? That’s the only sound part of economic theory, so it would seem reasonable to keep it. At least, if economics needs remodeling (pun intended) then focus should be on the unsound parts and leave the sound parts until later. But this is not the purpose of projects like CORE. The purpose is to get rid of economics and thereby clearing the road for unlimited progressive policies through wonderful big government.
I’m sure there are plenty of people involved in CORE and other projects who are not conspiring against economics for political reasons, but are made into “useful idiots” for the progressive crowd in its aim for domination of the mind. But it is not advisable to be this gullible. Everything about the CORE project and other similar projects point in the same direction. They don’t criticize the problems of prediction in the social science, nor do they criticize the empiricism of modern economics. They want to keep all of this bath water while throwing out everything deductive, all economic laws, and everything we’ve known about the economy for at least a couple of centuries.
The reason? It should be obvious that there are primarily political aims, since the inclusion of certain interpretations of equality, justice, sustainability/environmentalism and so on are included from the beginning. Along with a fundamental anti-business, anti-profit, anti-prosperity sentiment (but perhaps I’m repeating myself). The goal is to produce a field of economics that speaks to people’s emotions and that is as reliable and dependable as sociology (that is, not at all). Imagine an economics that is completely inductive (data first, theory later… maybe, if we feel like it), that incorporates all kinds of experimental research on people’s “feelings” and how they depend on social pressures and a willingness to “fit in,” that “acknowledges” that prosperity and a high standard of living “must be” at nature’s expense.
Such an economics, except for being simply unscientific and completely unreliable, would not stand in the way of carefully erecting an all-encompassing world government to feed us whatever necessary to create equality and justice.
The alternative, of course, is to acknowledge that studying the social world is not subject to the same methods as studying the “dead” matter of the natural sciences and therefore that prediction is futile, that there are fundamental patterns and regularity to human behavior, that value is subjective and individual, and that we can use social sciences only to gain an understanding for the economy and what is impossible (that is, what cannot be done).
Strangely, this alternative is nowhere to be found in projects like CORE. It is the same old story, but perhaps with new wording.
Structured, rational thinking about community, cooperation, and the market