T.D.C.o.t.E: Persistence of Idiocy in Economics

from Dollars & Sense:



Sunday, August 16, 2009


T.D.C.o.t.E: Persistence of Idiocy in Economics
by Dollars and Sense


The Dull Compulsion of the Economic (xiv)

A series of blog postings by D&S collective member Larry Peterson


Greg Clark and the Persistence of Idiocy in Economics

Recently there's been a lot of ink spilled in the financial press about what responsibility, if any, should be acknowledged by economists regarding their role in not sufficiently anticipating the onset or the extent of the current economic crisis. Sometimes reading this stuff is exasperating to the point of annoyance, or even anger, like when Alan Greenspan gives his suggestions for fixing a financial system he obviously had a huge role in destroying. But nothing has made me more angry recently than a piece I saw a week ago. At the time, I didn't even think it was worthy of a response (I know, not that a response from me would matter a whole lot, anyway...). But all week it weighed on me: how was it that such a terrible piece could be taken seriously by anyone in the first place?

And taken seriously it was: The Washington Post opinion piece, "Tax and Spend, or Face the Consequences," by UC-Davis economics chairman Gregory Davis, was linked to by at least three of the most visited econ blogs: (the usually good) Economist's View, (the usually awful) Marginal Revolution, as well as (the always pompous) Brad DeLong, and I also saw it on the Economic History Blog.

Clark has recently written a book, A Farewell to Alms, which is a silly and preposterous title, as anyone who has had to fight his way, as I just did moments ago, through city streets full of beggars and (far more annoying) solicitors for charities. But his book purports to be no less than "A Brief Economic History of the World." I managed to make it through about fifty pages before almost throwing the book out the window in disgust: his crass technological determinism coupled with institutional Malthusianism does a disservice to serious research in economic and technological history. But this book isn't what I want to talk about here: I'll confine my remarks to the article.

Clark's basic line is that technological change will force society, or "us"--whoever that may denote--to choose between subsidizing a growing number of "socially needy but economically redundant" people, or "confront growing, unattended poverty." After seeing off the current financial crisis as a "minor blip," Clark opens his piece by stating where the real challenge will lie:



Despite the nonchalant tone in which this simply unacceptable--morally speaking--idea is couched, it is hardly a novel one: serious scholars like Richard Sennett (but he's not an economist, only a sociologist...) have been researching and writing about the plight and diminishing prospects of the modern "precariat" for some time now. But, to Clark, there's nothing to do about it: consumers' preference for technology, presumably, simply demands massive labor-saving substitution such that only the most "skilled" will be able to outperform machines. So the challenge for policy will be reduced to figuring out a way for the "winners"--those who still can command an ever-increasing premium on the labor market, as well as those who have benefited from previous accumulation--to basically pay off the losers, and make them, for all practical purposes--except as consumers--simply go away. Will the "winners" be politically astute enough to buy off the rabble? Or will they risk unrest by failing to stump up? ..........(more)

The complete piece is at: http://www.dollarsandsense.org/blog/2009/08/tdcote-persistence-of-idiocy-in.html