When the religious refuse to say what they are - two sources launching a subtle attack on Keynes simultaneously

Two recent articles have come out that made me twitch, not just because of their nature, but the underhanded way in which they were written. The first is a WSJ op-ed, which anyone who consistently reads newspapers quickly discovers is a dismal op-ed section to read. In this op-ed by Stephen Moore the author pretty much says everything US President Obama is doing is wrong because in his (Moore's) household this sort of thing would never fly - this might pique the memory of those who've consistently read this blog because I discussed this sort of equivalence between a household's expenditures and a nation's in my first blog entry Breaking Ground - it's intellectually unsound.

It's so intellectually unsound that Paul Krugman tore into Moore in his own blog, and it's worth the short read, if only because Krugman is slowly starting to put a smile on my face again and I'm hoping he keeps it up.

The thing with my blog, though, is that I have a rule of sorts. I promised myself that when I made this it would not just be a news feed of "oh this person said something worth reading - go read it." I promised myself it would have to contain more - at the very least a linking of two things that had a plausible connection - and for me to then back up why I claim what I claim. That way the reader gets something they can't get anywhere else (and if you can please put it in the comments - I want to read what you're reading) and it also gives me practice at my trade.

So, in that vein, I stumbled across an article in Forbes. This time, instead of a political pundit carrying his Master's in economics in tow to the WSJ op-ed section, this article is writen by a professor from the Canadian McGill University, Reuven Brenner. McGill is a very good university, one of the top in Canada, and you'd be doing well for yourself in the "education" economy to have their name on a diploma of your own - so attacking someone who's got the name McGill behind them as well as Brenner's publishing history isn't exactly an easy thing to do academically. I'd suspect it'd take someone like Krugman or Stiglitz or Jamie Galbraith to get a journal article out to formally attack Brenner's formal academic work.

But what Brenner wrote in Forbes was not formal academic work - it's nothing short of a misleading, and borders on just being a lie. Brenner equivocates that it is, in fact, the Keynesians who are a bunch of hacks making up "jargon" such that economics is too hard for people to understand (the same argument made in the WSJ), and that furthermore the Keynesians are really just a bunch of "religious" nuts. Suffice to say, this makes me want to grind my axe - but not in self-defense because I feel I need to rally to Keynes' side - rather because it's a psychological projection scenario to distract from how neoclassical economics is the real religion in economic thought right now, and by somehow writing this stuff in op-eds, provide proof of its existence and thus an informal logical fallacy takes place - argument from repetition.

If anything is religious in economics right now, it's the Chicago School/Mont Pelerin/Neoliberal modes of economic thought that Hayek & Friedman propagated from Thatcher & Reagan forward. The adherence to the "rules" of their ideas, or as Canterbury put in his Brief History of Economics that “there is more than a marginal connection between the objectivist philosophy of Ayn Rand…and Milton Friedman’s monetarist philosophy” all ends up boiling down to a belief that there's no way it can be in any way wrong no matter what. It has to be right because they say it's "supposed" to be happening according to their theory, and even if it isn't, it's because it hasn't happened yet - but they're completely right. Or, as Paul Krugman put it in another one of his blog posts regarding Sweden,

Robin and I were talking yesterday with an eminent American financial economist, and said something about tax levels here. He said, “Well, that’s why all the young people are leaving.” Except, you know, they aren’t. But never mind — that’s what’s supposed to be happening, and it must be happening.

On Keynes, and I mean this in the sense of Davidson and not someone like Samuelson that picked and chose from Keynes such that it became a hatchet job more closely resembling neoclassical economics albeit with the addition of a decidedly non-Adam Smith military enterprise, there's plenty of scientific modeling that can be applied that doesn't just depend on a set of rules playing out in a sort of historical determinism. Neoclassicals don't have the power of Marx's qualitative sociological position (even though he too was wrong about the historical outcome, a point Gilbert made on his American inequality book) but yet neoclassicals will claim, despite no quantitative or qualitative reason to back it up, that their idea must be right simply because they say it is so.

And that makes the neoclassical school right now a religion - unlike the Keynesianism Brenner is trying to discredit. If you don't believe me just go do some research for yourself. Feel free to dissent in the comments - your dissent is encouraged and welcomed, but I'll stand by my position.

Edit: It seems that the above may have been misconstrued by some readers as my intent was not clear in this work, so I will seek to clarify. The point of this blog has not been to "rally to the defense" of Keynes or any of his intellectual kin like Davidson, Samuelson, or Minsky - indeed a BBC article taking an argument similar to mine  (but without the critique) is calling the current neoclassical collapse a lead-up to a "Minksy Moment" - rather the point of the above blog was to point out intellectual dishonesty. The neoclassical economic arguments are losing their quantitative foundations despite attempts at retrenchment, leaving them only with qualitative suggestions about what should happen according to their ideas - which is historical determinism - and despite that it's not happening. That's why I pointed out the bit from Gilbert above where he states that Marx's projection of how class awareness vis-a-vis property would lead to class struggle has not panned out - but Marxists will claim it eventually will - and that too is historical determinism. The difference between the neoclassical thoughts and the Marxists ones is that while Marx's qualitative arguments are still with considerable merit, and thus historical determinism might still be at play, the neoclassical arguments are also losing the qualitative foundations.

Which is a long-winded academic way of saying that there are still capital relations that Marx describes that are ongoing - the labor strikes in Wisconsin and the current strikes at Verizon just as two off-the-top of my head things - and so in that way Marx's qualitative foundations are still at play. Neoclassicals make arguments about how taxation will, qualitatively speaking, lead future capitalists to flee for better waters to make profit - a point that Krugman raised in his blog - but yet this is not occuring. So what Marx said would occur is, but what the neoclassicals are saying is not.

Thus while Keynes, like Marx, still has scientific ground to stand on - the neoclassicals simply do not have anything. Their ideas are becoming much more rooted in faith rather than science - which makes them religious - but rather than try to rebuff the academic beatings their field is taking they're resorting to psychological projection in an effort to provide proof that they're right simply because it's been said so many times. There is a real academic debate afoot about whether or not there is a religious element in neoclasiscal economic thought, but rather than hash this out academically as would be prudent, they're jumping straight to the op-ed section of major newspapers which provide a false sense of proof by authority.

This blog was about intellectual dishonesty - not whether or not Keynes was more right than Marx.