Economic Visions

Economists often complain that no one takes their advice, yet it is difficult to think of a field as riven by disagreement as the ‘dismal science.’ Adam Smith and Karl Marx may have shared the labor theory of value, but they promoted entirely different approaches to problems of production and consumption. While debates over grand systems have faded into the background of a discipline that is now concerned with smaller ‘optimization problems,’ consensus remains elusive. As a result, it is easy to suppose that the entire content of the field serves as camouflage for ideological propaganda of one flavor or another. When a free-market economist produces an argument about the inefficiency of government intervention, is the result a genuine work of intellectual discovery, or a sophisticated con?

The sheer variety of economic schools and methods does suggest that there must be something influencing researchers before they even begin to address their questions. Neoclassicals wield mathematics to promote government ‘correction’ of market imperfections while Austrians fall on philosophy to question the ability of anyone to identify a ‘correct’ market outcome. A cynical observer might well think that all the journal publications in the world only confirm pre-existing bias.

Understandable though this conclusion may be, it is all-too-convenient: if economic arguments can just be dismissed out of hand, there is no reason go through the trouble of reading any of them – and no danger that cherished political opinions will have to be adjusted. While this fake cynicism has all the allure of an excuse to avoid reading, critique requires active engagement.

Economists, by and large, practice their discipline as honestly as any other scientists. In fact, economics displays a fervent commitment to objectivity. For the last 140 years, the field has been increasingly technical, and many theorists aspire to achieve the mechanical perfection expressed in Newtonian physics. Standards of logical coherence and elegance winnow out bad arguments and elevate clear expositions of cost and benefit in peer-reviewed journals. It would be a mistake to dismiss their content as an elaborate subterfuge.

However, this should not be taken to imply that the methodological diversity found within economics is not meaningful. Indeed, there is an important sense in which economic literature expresses pre-existing convictions. Truly great economists do not rationalize their prejudices about taxes or regulation through sleight-of-hand, but they cannot avoid making judgments about meaning that cannot be said to be ‘scientific.’ Their work expresses a vision of the social world.

An analogy may help to make this clear. The greatest astronomer in 11th-century Prague, Honza Hvězdař, was a mathematical genius. His talent for observation, coupled with mastery of the astrolabe, allowed him to make predictions about the movements of celestial bodies that earned him the post of chief astronomer for the Přemyslid court. His writing is noted to this day for its honest evaluation of competing theories and its careful consideration of evidence from ancient and medieval sources. Yet not one of Honza’s expositions is regarded as true. For all his honesty, he could not escape the flaws of a vision that put the earth in the center of the universe.  

According to Thomas Sowell, one of the most distinguished economists alive today, “visions are the foundations upon which theories are built.” In A Conflict of Visions, he argues that people often line up on opposite sides of different issues because they cling to different visions of reality. It is usually easy to guess what a pro-life voter thinks about climate change because they bring the same vision to every issue. Moreover, though “it would be good to be able to say that we should dispense with visions entirely, and deal only with reality…reality is far too complex to be comprehended by any given mind. Visions are like maps that guide us through a tangle of bewildering complexities.” It is these maps that guide the first impulse of a research project by shaping intuitions about cause and effect.

In this postmodern formulation, the real locus of disagreement is not at the level of logical analysis, but in the aesthetic faculty – the great underworld of the mind that structures experience before thought is possible. It is the unspoken realm of belief and impression that lends an aura of credibility to some accounts, while obscuring others in a haze of incomprehension. This is the region in which it becomes possible to understand the bewildering variety of economic traditions. Yet because visions are inarticulate, they are easy to miss in books and journals. It is often far easier to capture a vision in artwork than in an essay.

Pablo Picasso’s ‘Girl with a Mandolin (Fanny Tellier)’ is a poignant example of cubism. Cubism dates back to the early 20th century, the period in which mathematical trends began their ascendance in economics. In cubism, time is obliterated, and space, the other half of the fabric of experience, dominates. The girl’s features, so beautifully disfigured, are offered up to the beholder in an infinitesimal moment of perception. One is left to wonder what the music that she is playing could possibly sound like in this timeless universe.

A world that has been stripped of time is a world in which all things are instantaneously evident, in which all forms are, like Fanny’s face, a collection of more basic elements. This vision presents reality as a geometric canvas where atoms are rearranged in stop-motion discontinuity. One gets the sense that a powerful computer could predict the entire course of Fanny’s life with the data captured by a single snapshot. Yet though everything about Fanny is known, there is no one to know it. No human could inhabit the cubist perspective.

The neuroscientist, psychologist, and philosopher Iain McGilchrist writes that, “modernism in general openly rejected the unique specifics of time and place, and of concern for the context of different peoples at different times for different purposes, in favor of timeless universalism.” This pattern is not limited to the visual arts: the modern novel rejects narrative as modern music chops time up into percussive rhythm. A similar tendency can be found throughout modern social life.

Modern politics is dominated by a notion of universal human rights that have existed since the dawn of the species. Similarly, contemporary moral philosophers expound upon the ethical rearrangement of wealth, promoting a sort of social Tetris. Meanwhile, popular notions of physics have made the idea of free will passé; just an epiphenomenon of more fundamental atomic activity. As a result, issues that were once in the domain of the humanities are now imagined as matters of engineering.

It should not be surprising, then, that one of the great visions in economics – the one that currently defines the discipline’s mainstream – is modern. In academic journals, debates between free-marketers and interventionists are settled through reference to ideas like equilibrium, the equivalence of supply and demand. According to the distinguished Chicago School economist Deirdre McCloskey, equilibrium has “resonance in bourgeois economics similar to ‘God willing’ in Abrahamic religions.” In equilibrium, all trades are settled, and all knowledge about the unique specifics of time and place is revealed.

The modern economist envisions the market as Picasso imagined Fanny Tellier – a composition of fundamental units that are immediately evident. In this vision, change occurs when these units – capital, the money supply, consumption goods – are rearranged into a more productive structure. The task of economics is then to analyze existing market conditions, identify inefficiencies, and articulate the policy changes that would promote a better distribution of goods and services. Mathematics is an indispensable part of this project because it offers the clearest evaluation of relationships between variables that are given to the economist at the outset. This effort flows naturally from the modern vision.

There are economists who do not share the modern vision, and some have made an impact on the field despite this aesthetic divide. Perhaps the most influential of these, Nobel Prize-winner F.A. Hayek, wrote that “the curious task of economics is to demonstrate to men how little they know about what they imagine they can design.” Hayek’s work emphasizes the ignorance of the human condition, and the way that institutions mediate a process of discovery. In this vision, little is evident. Once again, a painting articulates it better than words.

Hildegard von Bingen’s depictions of the Trinity are striking artifacts. In Cosmic Man, God the Father is depicted over and above the mortal realm, while God the Son, Jesus, is the red figure embracing the Earth – the earth is, in other words, God’s body. Meanwhile, the Holy Spirit permeates the universe with its light. In the words of Heinrich Schipperges, “the human figure seems to hold the universal network or system in its hands, thus accepting humanity’s task of creative commitment to the world.” It is a powerful image, if only for its dissimilarity to familiar Christian artifacts.

Everything in Cosmic Man is in relationship with all other elements of the universal system. This implies that to know something, unique knowledge of time and place is essential. Anything that is taken out of its context is irrevocably changed because it is taken out of the relationships that define it. This vision elevates relationship to the level of being.

A philosophical expression of this vision can be found in Kant’s Critique of Pure Judgment, in which the philosopher argues that parts can only be understood through reference to wholes. Kant argues that a scientist who seeks to explain what a leaf is can give a mechanical explanation of photosynthesis, but this will not tell anyone why the leaf is there. To do that, science must address the relationship between the leaf and the tree. Both part and whole are part of the answer.

In this vision, “it seems that a question like ‘what is x?’ has meaning only within a given order, and that within this limit it must always refer to the relation of one particular event to other events belonging to the same order.” It follows that knowledge is never final, for if the meaning of something is constituted by relationship, then there are as many meanings as there are minds capable of relating. Moreover, meaning changes with time as new relationships emerge. As a result, an economics informed by this view is one in which the market is an endless process of discovery.

Economists who share this vision downplay the importance of rearranging existing resources; many question the sense in which measurement is possible if meaning is interpretive. Instead, they emphasize the dynamic power of entrepreneurs, who create new value through action that is based on subjective evaluations of opportunity. Narrative, rather than mathematics, is their medium of choice because it enables the articulation of a time-bound drama. Ideas and institutions are at the center of their stories about economic cause and effect.

No vision is policy-neutral. A world that can be objectively evaluated and rearranged is more amenable to government control than a world in which knowledge is distributed and contingent. However, this does not mean that economic arguments are empty. Rather, it indicates that the frontier of this important discipline lies in its foundations – not in the sciences, but in the aesthetic.