My ninth lecture: labour and capital, talking about the distribution of newly created wealth, the way to conceptualise this, the political stances deriving from this and the light these shed on ethical perspectives about economic and financial issues.
Robert J. Shiller, professor of economics at Yale University, has published recently, along with his wife Virginia, a psychologist, an article entitled “Economists as Worldly Philosophers” (Cowles Foundation Discussion Paper No. 1788, Yale University, March 2011).
In their joint paper, the Shillers suggest that if economists were “Worldly Philosophers”, the double failure they have experienced in recent years could have been avoided: they haven’t been able indeed either to foresee the crisis or to suggest any credible remedies to the ensuing mess since then.
This is due according to the authors to overspecialization which implies economists lack the time needed to broaden their horizons to other fields that would enlighten their views, such as philosophy, history, sociology, psychology, and so on.
The Shillers’ article however falls short of its expectations as it summons the spent mirage of multidisciplinarity: the salvation of the field of economics would reside in knowing more about a larger number of things. Unable to tell precisely what economics is lacking in, they inadvertently transpose a qualitative question into a quantitative one.
In truth, the added value provided by experts belonging to another field is never that they come up with the missing piece borrowed from their own knowledge, but that they identify in a particular instance the blindness deriving from the incestuous cooptation of members that plagues every intellectual field.
No sooner is the framework of economics defined as Homo oeconomicus’ utility maximization, within a framework of methodological individualism which holds that interactions between Homines oeconomici do not lead to any collective “emergent” effect, that the whole approach is stuck in a stalemate, and no amount of open-mindedness will then be able to save it.
Contrary to what the Shillers suggest, the deadlock does not result from excessive specialization but from an epistemological misstep: the true economic players –groups of men and women playing different economic roles (whether these are called “conditions”, “orders” or “classes” matters little) – have been replaced in our explanations by pools of asocial – if not anti-social – Homines economici whose role as investors, company executives or employees, is regarded as fundamentally indifferent.
The quandary of economics is that it ossified within the framework of an emerging late nineteenth century psychology, voluntaristic in principle, where agents are the all-powerful masters of their own fate and capable of making perfect rational decisions based on perfect information. If economics had instead developed as a sociology, as was the case with the political economy of such thinkers as Adam Smith and David Ricardo, there would be no urgent need for replacing today’s narrow-minded economists by “Worldly Philosophers”.