On whether Economists should read Marx, and Adam S.
When I was a PhD student, I got invited to a Summer program at GMU and over the years got to know James (‘Jim’) Buchanan (and, lest we forget, Gordon Tullock) on a first name basis. Buchanan was just as ease as I was in debating the arcana of Wealth of Nations. Shortly after my PhD — I am not making this up — I corresponded with Milton Friedman over his and my interpretation of the Quine-Duhem thesis. And I have been proud to be a colleague of Vernon Smith (a great friend of this blog), who has taught me (inter alia) Grotius and new ways of reading (you guessed it), Adam Smith. While I wouldn’t name-drop Amartya Sen or Kenneth Arrow so cavalierly, they too are very fine scholars of the history of economics and philosophy. (As my most loyal readers know, I wouldn’t say anything like that about Mankiw, or even many of the leading sophisticated economists who make foundational contributions to decision theory today.)
In fact, when nearly a quarter century ago I first got to know leading, professional economists not just the Nobel laureates I mentioned above, I was repeatedly and frequently astounded by how much history of economics and philosophy they taught me. I was — as you have discerned by now — a victim of a selection bias. It’s an interesting question what exactly shaped the felt need to be so learned and philosophically sophisticated in earlier generations of leading professional economists (not the least Samuelson), but whatever it was that era has long passed for the most part.
As an important aside, anyone familiar with mid-twentieth century economics will quickly realize that it was shaped by and even constituted by methodological debates over philosophical images of the history of physics — not the least images of the scientific revolution. Many of the images had a nineteenth century provenance. (I have written on that here and here.) And, in fact, more surprisingly, economists welcomed the participation of some philosophers (like Ernest Nagel) as expert participants in their debates.
Be that as it may, as a junior scholar I wrote a number of programmatic papers (see, for example, here; here) to explain, as a playful amateur outsider, the fruitful evidential and methodological roles of history (and philosophy) of economics in professional economics. These papers went unread or at least uncited. For every philosopher that legislates successfully to other disciplines how they should think about their praxis, there must be many more who are like me unloved particles of dust in the Sahara dessert.
A few days ago, the distinguished philosopher, and my occasional co-blogger at CrookedTimber, Ingrid Robeyns sent me a Substack post, “Should Economists read Marx,” by
. First, to give credit where credit is due, unlike me, Smith seems to be able to monetize his blog successfully. Second, Smith had been triggered by a less-than-edifying exchange on Twitter between an Economist and an English lit professor. Amusingly enough that exchange involved not just Marx, but (you guessed it) Adam Smith.Noah Smith’s essay is much cleverer (more clever?) than most public writing on the topic, so while it also annoyed me, I recommend it without rancor. I do think it’s striking that Smith primarily views the history of discipline as a repository of knowledge about when and how a claim was first made. Back in the day, Schumpeter (and, more recently, my dear friend Salim Rashid) would deny Adam Smith’s originality altogether. But to read Adam Smith (or Marx) provides a very different kind of systematic understanding — warts and all — of longue durée processes (no different in kind than those studied more recently by Mokyr, North & Weingast (and their collaborators), and Acemoglu & Robinson (and collaborators)); with this exception that the understanding and misunderstandings that Smith (and Marx) provided also helped shape policy and philosophy of subsequent ages. So, to read them is to begin to understand how we got from there to here and, perhaps, to participate as agent of history in their (ahh) prophecy. But about that go read my big book.
Well, since I have your attention, one more thought about Adam Smith. The minimum moral aim of Smith’s Wealth of Nations (a book of a thousand pages so this is a bit of a simplification) was to end famine. Even now that’s not been achieved globally. A most sobering thought, I hope.
What follows is a more modest comment on the closing two paragraphs of Noah Smith’s essay (which I quote first):
Economists should read Marx, and they should read him with all of this history in mind. It’s a vivid reminder of how social science ideas, applied sweepingly and with maximal hubris to real-world politics and institutions, have the potential to do incredible harm. Marxism is perhaps the single greatest example of social-science malpractice that the human race has ever seen.
This should serve as a warning to economists — a reminder of why although narrow theories about auctions or randomized controlled trials of anti-poverty policies might seem like small potatoes, they’re not going to end with the skulls of thousands of children smashed against trees. Modern economics, with all of its mathematical formulae and statistical regressions, represents academia appropriately tamed — intelligence yoked to the quotidian search for truth, hemmed in by guardrails of methodological humility. The kind of academia that Alex Moskowitz represents, where the study of Great Books flowers almost instantly into sweeping historical theories and calls for revolution and war, embodies the true legacy of Marx — something still fanged and wild.
As regular readers know, I take inductive risk of theorizing rather seriously. And my head remains an analytic philosopher mistrustful of the ‘fanged and wild’ intellectual projects that sweep us into uncontrollable currents. So, two cheers for Noah Smith!
But even I was quite amazed by this conclusion; if reading Marx means here ‘read Capital’ and its reception by Marxists (at least some Lenin, Stalin, Mao, Pol Pol, Althusser, etc.) then this involves huge opportunity costs; this is no small ‘should.’ ‘Read Marx’ here means, reading him as a negative moral tale of warning and woo. It’s a heavy medicine, but if it contributes to necessary submission to being tamed, so be it. I might sign up to teach that as a service to the economics profession. (Just being playful here; teaching required readings is no fun at all.)
As an aside, if that’s the angle one wishes to take, one could do far worse than simply study Lenin on vanguardism and Luxemburg’s warnings against it. I teach that in a forty-five minute module to my undergraduates. Then again, I am not trying to turn their souls toward intermediate micro.
But the really controversial claim here is that modern economics is tamed. And here that means not solving global hunger, but rather it means being incapable of doing massive harm. This is a peculiar claim for Noah Smith to make because it goes against one of his best and really important points that he makes earlier in his essay: as a series of tools, economics techniques and concepts can be divorced from the intentions of those who originate them. (“The most useful concepts in science stand alone, divorced from the thought process of their originators. This is why they’re so powerful — anyone can just pick up Newton’s Laws or Nash Equilibrium and just use them to solve real-world problems, without knowing where those tools came from.” [emphasis added]) That is to say, powerful tools may well do powerful harms.
For, even if all the tools were to originate in “methodological humility,” it doesn’t follow the end-users will not do immense harm. That is, Noah Smith doesn’t begin to grapple with the potential for harm immanent in (let’s call it) tamed technocratic science, or tamed technocratic economic policy (or even the harms that accompany the randomized trials). One economist, George De Martino, has tried to get other economists to take professional Economic Ethics seriously, mostly in vain. As regular readers know, I think it makes more sense (following the suggestion of David M. Levy and Sandra Peart) to put the economist inside the model and treat the uptake conditions of the model and modeler’s incentives as a feature of taming the tools. (But again, telling another discipline how to conduct its business is not a lucrative consulting gig for me.) Telling one’s own former colleagues, they are mostly harmless is probably not bad for business.
By contrast, most economists (like most philosophers) prefer to say that the end-user (i.e., dumb politicians or dumb [central] bankers or dumb civil servants, etc.) are responsible for the harms that follow from mistaken or just wrongheaded application of economic tools. Or they will say things like ‘just as a physician can treat and is perhaps obliged to treat bad people, we can give sound policy advice to bad dictators,’ etc.
But…you may protest that I am being unfair or have misunderstood Noa Smith; he is merely making a comparative empirical claim: that whatever the misery tamed economists have helped produce or will go on to produce (modest contributions to bad systemic risk policies, ill-conceived development projects, etc.), Marxism has been far worse, even gruesome. Okay fair enough. My response to that would be, if it’s an empirical question why not study it? Oh wait, that would be a project for the historian of economics (with a dose of the economic historian). Of course, if the harms are out in the (possible) future, then we have to ask what guardrails prevent abuses or the correct application of even honest mistakes.