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Occupy Economics?: A Report Back from the Nerdiest Protest I’ve ever been to.

with 25 comments

By Peter

I just got back from Chicago, where, along with attending the American Historical Association, I participated in a series of protests held by Occupy Chicago, along with CACHE (Coalition Against Corporatization of Higher Education) that targeted the American Economics Association (AEA). Its not everyday that the worlds of street protests and academic conferences blend so well. But then again, part of the point was to “puncture the bubble,” that academic economists live in.

The protesters gave out “alternative” awards for Most Conflict of Interests (Columbia’s Glenn Hubbard), Intellectual Narrowness (Harvard’s Greg Mankiw), and top prize, the “Toxic Waste of Space Award” (Harvard/Obama administration’s Larry Summers). Other than a brief yelling match that one protester got in with a professor, the tone was light and fun. Protesters “accepted” awards acting as Mankiw, Hubbard, and Summers (who reminded us how much smarter he was than us) and served “Rahmon” noodles, in honor of the Chicagoans impoverished by Rahm Emmanuel’s neoliberal policies. Overall a lot of fun, albeit fun that might have gone over the heads of the random shoppers on Michigan Ave.

According to protesters: “The bankrupt ideologies of ‘neo-liberalism’–trickle-down theory, austerity, deregulation, privatization–have all been proven empirically disastrous. Those ideas still enjoy a monopoly in the mainstream debate due to the massive scale of academic subsidizing by the bought AEA and it’s cohorts in the 1%.” Watch a great interview with an organizer at the bottom of this post.

It just so happens the protests came at a time of particularly hot debate about the ideology of the economics profession. The recent release of the minutes of the 2006 Federal Reserve Meetings well illustrates—along with Timothy Geithner’s utterly pathetic sycophancy towards Alan Greenspan—that the High Priests were asleep on the job, completely unaware of the looming housing crisis. Said one professor quoted by the New York Times:

“It’s embarrassing for the Fed,” said Justin Wolfers, an economics professor at the University of Pennsylvania. “You see an awareness that the housing market is starting to crumble, and you see a lack of awareness of the connection between the housing market and financial markets.”

“It’s also embarrassing for economics,” he continued. “My strong guess is that if we had a transcript of any other economist, there would be at least as much fodder.”

Not the discipline’s finest moment, no doubt.

I have a longstanding hatred/fascination with the foundational logic taught in modern Economics courses: its technocratic imagination, its inability to question its own premises, its ahistorical logic (see Daniel Rodgers’ Age of Fracture, Chapter 2 for more on how society, power, and history dropped out of the Economics discipline), its inattention to moral consequences, its reductionism (like the horrid Freakonimics series, which thinks all aspects of human existence can be explained by their simplistic assumptions about human behavior), and its normative amorality (seriously, studies have shown that taking economics makes students less generous people).

And this is all important because Economics inhabits a unique disciplinary position. Part academic discipline, part incubators of elite policy makers, academics in no other departments transition so seamlessly from academia to government to Wall Street. Look at a figure like Larry Summers, who has (in the last five years alone!) inhabited leading roles in all three worlds. While taking money from Wall Street while producing intellectual material about Wall Street suggests casual corruption, the influence that economists, and what Tony Judt called economism (the tendency to think of all social problems in terms of the marketplace) has deep ramifications on our public policy. The very power of economists makes it more likely that they will be captured by elites. I think, then, it is fair to target the AEA, even if many, if not most, economists are actually innocent of any corruption. It matters to the public what economists talk about, much more so than whats going on in, say, the MLA.

A silver lining, though, to the economic collaspe might be a rethinking of some economic thought.

Writing about the great shift in Economics departments that occurred in the 1970s, as Samuelson, Galbraith, and the other Keynesians lost favor, Daniel Rodgers writes:

“The economic crisis of the 1970s was, in short, not merely a crisis in management. It was also, and at least as painfully, a crisis in ideas and intellectual authority. An extremely confident analytical system had failed to explain or make sense of the unexpected.”

The results, according to Rodgers, were that the profession increasingly moved towards a more neoclassical model and microeconomics prevailed over macroeconomics. Meanwhile, the logic of markets and economic thinking invaded other disciplines: rational choice theory in political science, the “law and economics” movement in law schools, etc… One hopes that our recent crisis and the inability of our policy elites to predict or solve the problem, will produce a similar paradigmatic shift. This time, though, hopefully it will be away from such apologias for capitalism.

So in that spirit, I wanted to highlight two interesting thinkers. The first, I saw over at Crooked Timber, where New School economist Sanjay Reddy gives a fabulous interview about the need to bring moral reasoning back into the study of Economics. Reddy argues against the notion that Economics is a value-neutral science, restoring an “evaluative framework” to the discipline. It is impossible, he argues, to come to purely technical solutions to most problems. In a sense, Reddy is asking that we take moral sides before we engage in economic debate. First, for instance, we say that a goal of policy should be to aid the poor, then we figure out ways to so.

This seems to fit well with an article in the latest issue of Jacobin magazine (also featuring an excellent piece by friend of the blog, Andrew Hartman), by Mike Beggs, calling for radicals to occupy economics. Begg’s article asks economists to be less technocratic, and more openly political in their ends. Beggs takes a middle ground (for radical intellectuals), acknowledging that “mainstream economics is both an ideological bastion of capitalism and a genuine social science.” A tool for understanding the world, it is also wrapped up in a set of assumptions that are not neutral, but that favor a free market approach to the world. Nevertheless, as Begg’s points out, the stereotype that many have of a discipline of Milton Friedmans is actually unfair. A wide swath of economists agree with the need for some government intervention, and, other than a few reactionaries in Chicago or George Mason, most also acknowledge the importance of Keynes. The problem, Beggs suggests, is “not that mainstream economics was delusional, or biased to the right, but that it was technocratic.” It presumed it could manage and control, rather than take sides in class warfare.

In the opening editorial of Jacobin, the editors declare that, as the rebellion of Occupy Wall Street spreads, “we are in the last throes of the era of Ezra Klein.” What they mean, I think, is that the tepid liberalism of the technocratic elite (poor Ezra has, a bit unfairly, become a symbol of this) says nothing to the fundamental message of the OWS movement: the restoration of politics—full throated politics—to our understanding of class and economics. Class will no longer be something discussed in dry studies by the Brooking Institute or in economics seminars, but in the chants and marches in the streets, as those without challenge those with. Millions of people simply standing up and rejected these “market-based” solutions that have been crammed down our throats, will do more to change the dialogue than any polite article or policy paper ever will.


Written by Peter Wirzbicki

January 16, 2012 at 23:21

25 Responses

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  1. Great post, though I guess I have to offer a few words in defense of Ezra Klein (full disclosure: Ezra is an old friend and we interned together back at the Washington Monthly in 2004).

    Ezra, as far as I know, is a mainstream libera/progressive. He believes in big but efficient government, a strong welfare state, redistributive taxes, regulated financial sector, i.e. most of the things we on the left (broadly speaking) sympathize with. Like me, he supported the Iraq War initially, then became a strong critic, and continues to criticize US militarism, though his big issue of course is domestic policy, particularly healthcare, in which he favoured a public option and a far more progressive plan than the Affordable Care Act, though he also thought ACA is better than nothing, which it is.

    Ezra sees meaningful differences between people like Summers and people like Mankiw. I think he’s right. Those differences may not be meaningful enough, and reasonable people can argue about that. But it’s Ezra’s jobs to see those nuances.

    I should also add that Ezra was one of the early mainstream supporters of OWS, and wrote about the movement very favourably and sympathetically almost right from the get-go. If the left is going to have a big tent to have a real effective movement, it’s going to have to include Ezra Klein, and all the other Ezra Kleins of the world (Matt Yglesias, etc). We need a popular front against corrupt, crony capitalism, heartless libertarianism, militarism, and social conservatism.

    Last, about economics: Let’s also not forget that Paul Krugman is an economist too. But I think you are broadly right that economists often have tremendous hubris, thinking their discipline a hard science rather than a social science. And many are unwilling to challenge orthodoxies and move outside traditional frameworks. You’re right that morals should be re-injected into economics. But you know who also believed that? Adam Smith, of course, in his talk of “moral sentiments.” Which is why I like the left’s move, in some ways led on by Tony Judt, to reclaim Smith as one of their own, invisible hand notwithstanding.

    David Weinfeld

    January 17, 2012 at 09:39

  2. […] I put this award on my CV? [Mankiw] Peter Wirzbicki reports: I just got back from Chicago, where, along with attending the American Historical Association, I […]

  3. Since I classify myself as a classical liberal I suppose the perjorative heartless adjective would be applied. I don’t expect a serious discussion to ensue. But I would urge you to appreciate that hundreds of economists do believe that technical formalism has destroyed good economics and these folks are across the political spectrum. David Colander has written elegantly here. I’d also urge you to appreciate that many economists question “orthodoxy” but that does not imply it means that doing so means one must take a left turn. Austrian economics is way outside the mainstream for example.

    Some economists also reject the idea that economics is a hard science – in fact Nobel Prizes have even been awarded to some of them (Hayek). His many works on scientism are a good place to start.

    Furthermore, many economists start and end with an ethical approach – indeed, the bone of contention between some economists and non-economists seems to be the outright dismissal by non-economists that applying the Economic Way of Thinking is morally inferior. It is not.

    For extremely thoughtful approaches and views on the ethical aspects of the economic approach one can do no better than reading the work of the late Paul Heyne, and certainly that of Jonathan Wight and especially that of Deirdre McCloskey.

    Oh, and I’d suggest that you mischaracterize the policy positions of many libertarians. Milton Friedman and Hayek in no way rejected a strong role for government. I am sure you knew that of course.

    Reading the middle and end of the Constitution of Liberty without knowing the author would have one think it was written by a modern-day Klein-like Progressive.


    January 18, 2012 at 20:55

  4. Where’s the award for Paul Krugman? He clearly deserves an award for (among other things) arguing with his own body of work.


    January 18, 2012 at 21:09

  5. I’m an economist. This protest does sound like it was a lot of fun, but this critique of economics — which I hear often — is so broad that it says more about its authors than its targets. Never attribute to a conspiracy what can be explained by foolishness.

    For instance, after the neoclassical revival, there was a rebuilding on the Keynesian side. Mankiw made his name as a Keynesian macroeconomist. Summers is not only a center-left Keynesian, but also has been beating the drum about psuedo-scientific analysis in macroeconomics for a long, long time.

    Pretty much everybody in economics hates Freakonomics, too. Some of the most famous papers described in that book have now been shown to have been driven by incorrectly calculated statistics.


    January 19, 2012 at 07:14

  6. […] didn’t attend the American Economic Association meetings this year. But Peter Wirzbicki was in Chicago, participating in the American Historical Association meetings, and he describes the […]

  7. Do you think economists knew this financial crisis would happen, yet didn’t care? And that they don’t care now that we’re in it? Or is your accusation that they didn’t care enough, and so they got us into this mess.


    January 19, 2012 at 09:13

  8. I was at the AEA and encountered the protest. I have been involved in protests and socialist activity most of my life. This is why I study economics.

    The one thing that sticks out in my memory is the one Professor, mentioned above, who came over and asked “Do you actually know what people are discussing in there?” He genuinely tried to engage in discussion with the protest. Very shortly afterwards a protestor started screaming at him. If you look at the second picture down, the third person across with the Alan Greenspan placard is the one.

    He was the most ignorant arsehole I have ever met at a protest. People like him need to be shut out by any movement that wants to get change. He is not someone who cares about what he’s involved in: he just wants to get angry and shout. Anything that gets in the way of him getting angry and shouting, well he will shout at him. Seriously, if you are politically active, and you are active with that guy, you should be closing him out of your activities. He is a liability. Governments have paid people to act the way that this guy did in order to discredit political actions (agent provacateurs). By having this person involved you are really discrediting the movement.

    All any of the economists I know remember of the protest is that guy acting like a jerk. I was left in a position where I was not discussing issues that the protestors brought up, instead I was defending the idea that the protest had any credibility. Not a single issue raised by the protest was discussed and all the economists were convinced that the whole protest was a load of angry morons screaming about something they didn’t understand in the slightest. That one guy undermined the credibility of the whole protest for the only group of people who could have possibly cared about what the protest was about.


    January 19, 2012 at 10:17

    • I won’t defend the protester. But the professor you mentioned wasn’t trying to engage with the protesters. He didn’t politely come up to an individual and try talking to them. He stood above us and addressed everyone, speaking over the rally’s own speakers. It seemed that he was trying to hijack an event that people had spent a long time preparing. I wish, too, that everyone was respectful to each other. But you can’t really see a crowd (with real and legit grievances about things) and get up on a podium and explain why they are all wrong, and expect everyone to calmly listen. Try it next time you see a rally– any rally– and see what happens.
      Its not your seminar room and frankly it takes an incredible display of privilege to assume that you know more than the protesters and that, rather than listen to them, you will lecture them. I wish people had been polite, but when he tried to take over the rally, he was preventing the protesters from getting their message out, which is also unacceptable.

      Peter Wirzbicki

      January 19, 2012 at 17:40

      • Since the protest was retarded and full of slack-jawed morons, any hijack has to be an improvement.

        The Hat of the Three-Toed Man-Baby

        January 20, 2012 at 10:20

      • I saw it happen.

        The guy was already standing on the higher ground. He did say it loudly and because he believed in what he was saying. He couldn’t have said it quietly because people were shouting. It was no more their right to have speech on that street than it was his right to speak. When one person offered to have him come down and address the crowd he said he would love to as long as no one would just start shouting at him and calling him names.

        It didn’t seem that he was hijacking the event to me. It seemed like he was trying to engage in discourse. You’re second point was that you can’t expect people to calmly listen under those circumstances. What you can expect people to do and what they do do are two very different things. I expect the police to involve themselves in acts of brutality at large protests; it doesn’t in any way make it right. You can’t justify that behavior. You certainly can’t justify behavior by the fact that its what you expect people to do. Just think for a moment about where that kind of reasoning takes you.

        The reality of the matter is people were happy to accept his behavior because they didn’t want to engage in evidence based discussion with people of differing view points: something which is endemic amongst political activists. I went around and asked several of the people there which items on the program they took issue with and why? Which economists they thought were so corrupt and why? Nobody even had an answer, except one of the speakers whose speech was largely quotations of criticisms of economics by ….other economists. Maybe it did show an incredible display of privilege to assume that he knew more than the protesters; sadly he was correct in that assumption (at least as far as I could garner).

        But if you really want to consider an incredible display of privilege then you ought to consider a largely young middle-class group of protestors assuming that they know more, with a whole weeks worth of talks under their belts, than a group of people who have dedicated their lives to trying to understand how the hell the economy works. People who really care about what they do BECAUSE it affects people. People who could earn a lot more money outside of academia than inside academia.

        You seem to think it must be the case that a small group of people’s right to shout at some economics Professor supersedes his right to ask them “Do you know what people are discussing in there?”

        Which, it sadly turned out, they didn’t.


        February 5, 2012 at 12:47

  9. A rant by the unimportant to the unintelligent.

    The Hat of the Three-Toed Man-Baby

    January 19, 2012 at 12:29

  10. While attending the AEA meetings, I walked past the protest and overheard another economist (whom I don’t know) say, “Hey look, they know Emmanuel’s research.” They were referring to Emmanuel Saez, a top, mainstream economist who actually did the research that everyone is relying on when they talk about the growing gap between the top 1% and everyone else. The reality is that there are many, many economists who care about inequality and their research is well within the mainstream. You should view them as people with common goals. Taking a broad combative swipe at the entire AEA is not helpful and will help people write you off.


    January 19, 2012 at 13:56

    • That was one of the points that Mike Beggs makes. But every group is diverse. There are members of the 1% who are perfectly fine. But you sometimes need to simplify in order to have a coherent message and in order to push people in the right direction. The point is not that every member of an association is responsible for this bad ideology. But that, on balance, the overall tendency of the discipline is towards these things. After all, Occupy Chicago also held an alternative AEA, where they heard from members of many heterodox economists.
      The other point, I think, is to burst the bubble a bit. Remind economists of the real world consequences of what they do. Sure many are well meaning, but the results aren’t there yet for the rest of us. As long as the economy continues to malfunction for so many, people will be, fairly or unfairly, upset with those who crafted these ideologies.

      Peter Wirzbicki

      January 19, 2012 at 17:51

      • This is a very long reply. I suspect too long for anyone to bother reading.

        Why do you think economists do what they do? Because they hope to contribute something that has a real world effect. Milton Friedman, to choose the left’s most loathed, did what he did exactly because he thought it would affect people’s lives. Both his proposal for a negative income tax which gives money to people below a certain income and his support for the economic changes in Chile were motivated by this (I only approve of one of these, guess which).

        You are treating the economics community as a group with a political agenda in the sense that you think it should close down those members who have particular views on the world. The economics community is not such a group. It is an association of people who are engaged in debate with one another over a whole series of issues. This has always been the case. Marx (an economist) did work that was in reaction to/ inspired by the work of other economists such as Adam Smith, David Ricardo and John Stuart Mill. The Socialism debates of the early 20th century between the Austrian school (Hayek) and the Market Socialists (Lange and Lerner) were not the act of a partisan group but of a deeply divided group.

        Maybe its different now? I don’t think so, we still have people arguing over big substantive areas but there has been progress. Progress in the sense that there is now broad agreement on. The two big ones are:

        1. Markets fail in many different circumstances and they require government (or other institutional interventions) to deal with such failures (There are at lease three chapters in the Economic Principles book of the much demonized Greg Mankiw.)

        2. Government cannot run the whole economy, for a whole host of reasons.

        Economics has many problems but we are working on them and arguing about them all the time. A protest will not change the direction of research; evidence and reason will. That’s how science operates: trying to intimidate people into changing the direction of their research is fascistic. This is not to say that there is not bias created by the people who fund economics research, and other causes. In fact, there was a very good talk given at the conference on exactly that issue and on why it was a problem (the economist giving the talk was from Chicago). But if this is causing so much bias how come the top main stream universities are consistently producing economists coming out with proposals that are redistributive (Krugman, Stiglitz, Friedman, Frank, Ostrom, Bowles, Gintis, Saez, Pickity, Heckman, ……. the list goes on for a very long time).

        I spent a long time thinking about economics before I became an economist. I was interested in it because I was studying/active in politics and philosophy before I went to university. I was very antagonistic towards its methods and approaches; I still am in a very different way. However, what I have found is the criticisms leveled at it by heterodox economists (and many other social scientists) are generally just factually inaccurate or miss the point.

        The classic claim is that mainstream economics embraces homo-economicus: the selfish, rational, pleasure maximizing man. Heterodox economists still make this claim today. Despite the fact that Gary Becker proposed models for other regarding preferences (i.e.caring about the well being of others) in the sixties; he won a nobel prize. There has been masses of research on what motivates people and how unselfish, vengeful, alrturistic they are. There has been a wealth of literature on the irrationality of man (and several nobel prizes won) within mainstream economics. The criticisms that are correct, in a sense, are identifications of the limits to current economic methods or a failure to understand a particular event or phenomena. However, these are known by economists (not all because you can’t know everything and you often have to focus on a particular field) and are called research in progress. The heterodox economists feel much maligned when they are ignored in pointing these things out. Its because people know that its a problem, they’re trying to solve it (or someone is) and the heterodox economists don’t make any coherent proposals for dealing with the problem that allows us to progress in a fashion that uses empirical evidence.

        This was far longer than I expected it to be. I think the inaccurate characterization of mainstream economics by the left very distressing. It inhibits the ability of the left (I use left in a vague enough way, please don’t take the word too pedantically) to provide propositions for change that are feasible and will work. The left will not get public support until it has such a set of propositions. Until it has public support there will be no changes, not that you should want a change without having a good idea of what the consequences of that change will be.


        February 5, 2012 at 13:55

  11. That conference is absolutely horrible. One of my best friends was raped in a hotel there by a fellow economist, believe his name was Fieckers. Don’t think there was enough evidence to prosecute.


    January 19, 2012 at 23:49

  12. Hey hey! Ho ho! Your patchouli stank has got to go!

    Hey hey! Ho ho! Your patchouli stank has got to go!

    Occupy Occupy Economics

    January 19, 2012 at 23:52

  13. You will recognise this man from the television as no one in the world exercised more influence on the events leading up to the Copenhagen conference on global warming than Dr Rajendra Pachauri, chairman of the UN’s Intergovernmental Panel on Climate Change (IPCC) and mastermind of its latest report in 2007.

    Although Dr Pachauri is often presented as a scientist (he was even once described by the BBC as “the world’s top climate scientist”), as a former railway engineer with a PhD in economics he has no qualifications in climate science at all.

    What has also almost entirely escaped attention, however, is how Dr Pachauri has established an astonishing worldwide portfolio of business interests with bodies which have been investing billions of dollars in organisations dependent on the IPCC’s policy recommendations.

    These outfits include banks, oil and energy companies and investment funds heavily involved in ‘carbon trading’ and ‘sustainable technologies’, which together make up the fastest-growing commodity market in the world, estimated soon to be worth trillions of dollars a year.

    Today, in addition to his role as chairman of the IPCC, Dr Pachauri occupies more than a score of such posts, acting as director or adviser to many of the bodies which play a leading role in what has become known as the international ‘climate industry’

    Read more from the Telegraph here……

    Pansy Booth

    January 20, 2012 at 04:57

  14. “One hopes that our recent crisis and the inability of our policy elites to predict or solve the problem, will produce a similar paradigmatic shift.”

    The neokeynesian perspective of the 70s died out because of its inability to explain the breakdown in the Philip’s Curve. However modern economics can account for the most recent financial kerfluffle. I recommend this interview with Thomas Sargent:

    Neoclassical economics does not embrace any ideology[1], its a formalism, nothing more. I understand that maybe a difficult concept for historians, where formalism eschewed. Their loss. But you can actually use the neoclassical approach for any political view. See the work of John Roemer at Yale for a marxist perspective. Sure there are limits to this particular formalism, and that is certainly an area of research, but most present alternatives have glaring errors.

    The truth is that these protesters just like to express outrage, and have no interest in economics. The protester interviewed resorted to buzzwords rather than expressing any coherent disagreement or economic argument. Ultimately, this protest is signaling behavior to their colleagues, friends and relatives. They just want to show how much they “care” (or how “cool” they are), even though they care little for actual policies or improving people’s lives. Its simply a matter of applying Hanson to the political arena. As he says, politics isn’t about policy.

    [1] In theory you can claim that every human concept is an ideology (string theory for instance) but then the word loses all analytical interest.

    Dan in Euroland

    January 20, 2012 at 11:26

  15. I’m giving you the finger with my invisible hand. You can’t see it unless you have a PhD in Economics.

    Occupy Occupy Economics

    January 20, 2012 at 14:05

    • Wow. You are clearly just incredibly ignorant. That was not a response to anything that anybody said, just an insult. You don’t care about what you claim to care about. You are a fraud.


      February 5, 2012 at 13:58

  16. […] Peter was participating in (and ably chronicling) the Occupy Chicago’s protest of the American Economic Association’s (AEA) annual […]

  17. […] Occupy Economics?: A Report Back from the Nerdiest Protest I’ve ever been to. […]

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  18. […] I just got back from Chicago, where, along with attending the American Historical Association, I participated in a series of protests held by Occupy Chicago, along with CACHE (Coalition Against Corporatization of Higher Education) that targeted the American Economics Association (AEA). Its not everyday that the worlds of street protests and academic conferences blend so well. Occupy Economics?: A Report Back from the Nerdiest Protest I’ve ever been to. « Ph.D. Octopus […]

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  19. […] So in that spirit, I wanted to highlight two interesting thinkers. The first, I saw over at Crooked Timber , where New School economist Sanjay Reddy gives a fabulous interview about the need to bring moral reasoning back into the study of Economics. Occupy Economics?: A Report Back from the Nerdiest Protest I’ve ever been to. « Ph.D. Octopus […]

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