Felix Salmon has a nice piece on economics, morality, and religion inspired by a Stiglitz Q&A session. It is interesting and worth reading. Nonetheless, given where he is writing from, and I am reading from, it is bound to irk me.
There is confusion about two different issues: the normative dimension of textbook economics and lefty/progressive economics. This creates lots of difficulty when he tries to write about the ethics of religion in relation to the ethics of economics. Salmon writes:
And if you look at the history of successful campaigns to effect change in America, they tend to be based overwhelmingly on the power of storytelling, often of the moral variety, rather than on the power (which is always pretty limited) of logical argument. Narratives — stories — move people in a way that Stiglitz’s econometrics never could. And the most powerful narratives are religious ones.
This is an area where INET is attempting to find common cause between lefty theologians and lefty economists. It’s a good idea in theory, but if the first evening is any indication, it’s not likely to work. Because in reality, there is still a huge gulf between the way the two groups see the world. Theologians aren’t into maximizing marginal utility; many of them are deeply suspicious of the entire capitalist system. (For instance, at one point a fellow panelist, Betty Sue Flowers, told Stiglitz that economics was a poisonous ideology which had captured the country, and which needed to be countered with faith and love.)
I’m not sure if it is a cheap shot to point out that “maximizing marginal utility” would likely imply starving to death (or, in the case of an immortal representative agent, starving through eternity), but I do think it is illustrative of the fact that Salmon is a really smart and interesting writer who hasn’t written, read, or thought much about the fundamental issue in this piece – the normative commitments of textbook economics. (I’m going to keep calling it textbook economics here because I do not want to get into debates over the usefulness of the terms neoclassical, orthodox, mainstream, etc. in this post. )
When Salmon says that “Theologians aren’t into maximizing marginal utility,” the implication is that lefty economists are. Ignoring “marginal,” a number of problems remain. First, it really unclear what a lefty economist is. Yes, the Republican Party is engaging in some weird goldbugism, but, being interested in correcting market failures, RomneyCare, or monetarism is not necessarily “leftist.” Mankiw+Milton+FRED != Leftist. To avoid playing ideological police, lets just ignore lefty and focus on economists.
The second problem is that it conflates an aspect of a model (“assume utility maximizing households”) with a normative concern. There is no simple and necessary relationship between the logic of a model used to make claims about the world, and the normative framework we use to evaluate different outcomes. I hope you didn’t skip over “simple and necessary.” The notion of a utility maximizing individual has an ethical-philosophical pedigree and implications. I do think there is a relationship between the two; it is just not simple. Moreover, this is not Salmon’s point. He does not give the impression that the economist’s ethical framework, expressed in his/her modeling choices and policy suggestions, is fundamentally different than the theological framework. Rather, the economist’s logical and empirical framework is fundamentally different than the theological ethical narrative. This is the third problem.
Betty Sue Flowers wants to oppose economics with “faith and love.” These were apparently her words, but instead of thinking about the ways in which economics has its own narratives meant to persuade, he basically accepts the distinction made by economists. The irony is that this very, clear cut, distinction between a foggy narrative of faith and love (or justice, fairness, etc.) and the cold hard logic and empirical rigor of economics is the primary rhetorical device of economics. Wonks are persuaded to swallow the textbook view of economics uncritically, because it is the smart and rational thing to do. Progressive wonks don’t think exploitation is a myth because they are logical, rational, and empirically grounded thinkers. They think exploitation is a myth (at least in part) because they have been persuaded by the rhetoric of textbook economics that speaking this way is logical, rational, and empirically grounded. Huge difference. In accepting the textbook view they overlook plenty of logical-empirical gaps in the model, unknowingly ingesting a bunch of ceteris paribus stories and an ethical perspective that just may in fact be poisonous.
To put the ideological police cap on again, if Salmon became interested in lefty economics there are a few things that would become obvious. Textbook economics does have a normative framework. Not every economist accepts this framework. Not every economist accepts utility maximizing as a modeling tool or a meaningful ethical goal. As Salmon recognizes, religion plays an important role in most social movements in the United States. Left economists, religious groups, and religiously motivated people have coexisting in numerous campaigns. Coalitions never behave like world class symphonies, but Salmon’s pessimism about finding common ground between lefty economics and religion is a symptom of the narrowness of the wonkosphere’s understanding of the left. I joke about ideological policing, but this is really not what it is about. To point out that someone like Stiglitz, or a very different type of “lefty economist” like Yglesias, is lefty in only a narrow and unrepresentative sense is not to dismiss them. Let them make their arguments. The problem is that this obscures other, diverse, but arguably more representative, takes on left political economy. It is possible Salmon disagrees with these more radical strands, but in writing this he appears primarily ignorant of them (or, a right winger like Dierdre McCloskey).