Monday, September 26, 2011

Among the Nobel Laureates

Among the Nobel Laureates.

This last weekend, Columbia University’s Center on Capitalism and Society held its 9th Annual Conference “Philosophical Foundations of Economics and the Good Economy:  Individual Values, Human Pursuits, Self Realization and Becoming”.   

The participants in the conference included three Nobel Prize winners: Edmund Phelps (Economics, 2006), Joseph Stiglitz (Economics 2001) and Amartya Sen (Economics, 1998).  I was only able to attend the first day, which included speakers in multiple disciplines: Professor of Law and Philosophy Thomas Nagel of NYU, Esa Saarinen (Applied Philosophy) of Helsinki, Martin Seligman (Psychology) of the University of Pennsylvania, Richard Robb (Professional Practice in International Finance) of Columbia, Mark Taylor (Religion) of Columbia, Robert Shiller (Economics, Yale), Amar Bhide (Law and Diplomacy) of Tufts, and Ian Goldin, who is the Director of the James Martin 21st Century School, University of Oxford.

Let me start out by saying that I am grateful that no one called on me.  The incredible depth and breath of knowledge that was in the room was not just exhilarating, but intimidating, and there is absolutely no way I can do justice to any of it.  My omissions and inaccuracies reflect my own limitations, not theirs.  Taking a great liberty (it’s my blog posting), I’m going to focus on four very small slices and spread them out over several blog posts.  

The first was a superb discussion by Martin Seligman about improving the emotional life  and performance of individuals and organizations and the value of cooperation and inclusion in happiness.  The second, by Ned Phelps, made the point that a government policy that favored the wealthy was not in and of itself bad: if part of the object of government was to help foster an atmosphere where the individual may achieve self-realization and growth,  the rich were citizens too. The third was a fascinating, almost offhand comment by Mark Taylor, who noted that the Calvinists and Adam Smith were Scottish and from the same intellectual and religious tradition.  I found an amplification in his written remarks prepared for the conference.  “More important in this context, the notions of self and god first defined in the Protestant Reformation form the foundation of the classical theory of markets that emerged in 18th century Scotland….. For many true believers, the market has effectively become God in more than a trivial sense – it is omnipresent, omniscient and omnipotent.” And, finally Ian Goldin, who noted that contemporary (conservative) orthodoxy in the field of economics had a chilling effect upon the development and expression of alternate, more progressive ideas. 

I want to start with Professor Goldin’s remarks (which, unfortunately, didn’t get a lot of traction) and their intersection with Professor Taylor’s.  What he said, in effect, was that the dominant strain of thought in Economics departments today was traditionally conservative and free market based, and that alternate thinkers had little opportunity to either get published in the two most prestigious journals or attain tenured Professorships.  Goldin wanted the contributions of women, and other cultures recognized.  If those voices are denied access to the highest temples, then the constituencies they represent are also unrecognized.  That makes economics as a science, and economic policy, as incomplete. 

Goldin didn’t expressly draw the link to Mark Taylor’s work, but I think it’s there.  If academics are steeped in the traditional views of Smith and Hayek, do they also draw upon the Scottish aestheticism and certainty-the sense that the free market is like God, “omnipresent, omniscient and omnipotent”.  Is the "invisible hand of the marketplace" not a theory so much as an act of divinity? And, by extension, is any deviancy (taxation, regulation, etc.) heretical?

What’s wrong with strongly held views? Nothing at all, so long as the marketplace of ideas is free and competitive.  But what Goldin is essentially saying that traditional and conservative economics-a pro free market, male-dominated, anti regulation, low taxation orthodoxy, controls the means of production of economic thought, and, by extension government policy. And so long as that hegemony stays in place, the underrepresented will remain underserved. 

Goldin, although speaking of the academic world, also brings us to a central conundrum when it comes to governing.  If one lives in a hermetically sealed world, secure in your orthodoxy, with no dissenting voices, does that give you any opportunity at all to be adaptive to new circumstances?

This isn't an idle question.  The views the medical profession had on anatomy were dominated for nearly 1500 years by the observations of Galen, a Roman physician, surgeon, and philosopher.  His work became dogma in the strictest sense of the world-to oppose them was to risk religious punishment, even though his ideas were based on his dissections of monkeys and pigs. In 1543, after sneaking into graveyards to do illegal dissections, Vesalius published a definitive work based on actual observation of human anatomy.  Galen's views on circulation and humors endured until 1628, when William Harvey described the workings of the heart as a circulating pump.  Galen was brilliant; his work was still taught into the 19th century, but he was also often wrong, and his "dead hand" lay over medicine.  When evidence to the contrary was discovered-or even apparent on a gross examination-it was dismissed as evidence of an abnormality. 

Economics isn't anatomy.  We have theory and practical experience.  One thing we can say with certainty is that even capitalism is not without its flaws, and certainly is uneven in delivering its benefits. Look around you and you see great disparities in wealth, some of which is organic, and some the direct result of governmental policies that purport to apply economic theory.   Adam Smith was brilliant, but it's remarkably optimistic to assume that he foresaw everything.  The same would apply to John Maynard Keynes.  Perhaps they were both correct, within a given set of circumstances.  Like the physicians of the Dark Ages who blindly followed Galen, the politicians of today often willingly become reflexive acolytes in order to avoid having to observe present reality and act independently.  They fear punishment-of expulsion from the religion that offers financial and political support.  Orthodoxy is safety.  But if Goldin is even partially correct, critical components of economic policy are being ignored. With the challenges ahead, I would prefer all hands on deck.

If you would like to read some of the supporting written work of the conference, you can follow the link

The articles are well worth your time.  I’ll be back in a few days with more.