19 – The Sad Necessity of Economic Self-censorship (23 Apr 09)

    Notwithstanding the gradually declining fortunes of the Foreign Correspondents Club of Japan as a journalists’ club (you cannot count on finding a real-life correspondent when you enter its main bar), it still manages to pull off memorable events at which journalists are given the opportunity to engage prominent figures in serious and searching conversation. I participated in one yesterday, at which two recipients of the Japan Prize, David Kuhl & Dennis Meadows, could discuss what they had been doing and thinking. For the radiology pioneer and “father of positron emission tomography scanning” – allowing doctors to look into the physical substance of our brains and other soft tissue – the press could hardly have been expected to express more than awe, but the exchange with Dr. Meadows turned into a probing discussion.
     Having become famous 37 years ago with his Club of Rome report The Limits to Growth, Meadows has continued to think about what economies are for and what they cannot do. If the format of the event and time had permitted it, this FCCJ press luncheon could easily have turned into a brainstorming session about the broader background against which the current financial crisis could profitably be viewed, thanks to a couple of German correspondents, one from Canada, and an American writing for a Japanese economic publication.
     Most important to my mind was the point of how to think of the core notion of growth itself. Dr. Meadows agreed with me that its having become the Holy Grail of economic policy-making, after post-World War II industrial reconstruction was completed, must be seen as the cause of much misdirection. Also that transactions of a realm in which money, financial instruments, and corporations themselves are treated as commodities have delivered an enormous amount of pseudo-growth, which has added no true value to present-day economies. But most interesting was his response when I asked him about his not having taken a position on the notion of economic growth as such when he wrote his famous report.
     He said that his not going into this subject was the result of a fundamental decision to make the report palatable to as large a number of people as possible. Tackling the issue of what economic growth actually means would have meant that the message he wished to convey would never have emerged above the din produced by potential critics. The notion of “growth”, arbitrary as it may be in the way it is applied, is a crucial underpinning of current economic theory, and placing it in proper perspective would mean, as Meadows put it, that quite a few economists would have to return their Nobel prizes.
     In these days when columnists, economists, and politicians are holding forth on what they believe to be economic fundamentals, it is more than useful to keep in mind the self-censorship that Dr. Meadows correctly believed to be necessary if he wanted to be heard. In the 37 years since then such a need, if anything, has only increased. The moment you deviate from orthodoxy you must expect to be marginalised. Of course the marginalised mavericks enjoy sufficient freedom of speech, and there is at least one publisher specialising in the literature they produce, but hardly anyone pays attention, hardly anyone who could make a difference that is. Full-fledged battles against orthodoxy are kept in a relatively narrow arena of mostly left-leaning criticism, or in the broader anti-globalisation movement that is only taken seriously as a headache by the powers that be. Exceptions like James Galbraith, whose name and reputation and eloquence have resulted in a relatively large public for his tour de force The Predator State, ought to encourage other economists; those who continue to preach the gospel, while having lost all faith.
     The mandatory self-censorship is a mostly unexpected and unsuspected epistemological barrier in the sad state of human affairs. What currently appears to be a vigorous and open debate about how to think about the financial crisis stays, for the main part, within fairly clearly delineated permissible lawns of discourse. Judging by the way that the media justify what they bring by quoting academics, the general public is certainly not aware of all this. University economics departments and business schools are notorious for guarding the epistemological barriers. Appointments, promotions, entire academic careers depend on prudent self-censorship. Climbing the ladders in these institutions is hardly possible without publishing articles that perhaps nobody will read but that are carried in top-rated journals. Such top-rated journals are the worst obstacles to original thought. Their function is to maintain orthodoxy. Their editors cannot conceive of this as being intellectually suspect. Once they showed doubt, their monumental claim that economics is an empirical science would be thrown overboard.
     And thus, those whose task it is professionally to facilitate and help steer public debate on economic affairs allow politicians to go on with prattle about what they are aiming for; about something called sustainability, for instance. As Dr. Meadows said yesterday, the notion of sustainability is wonderfully useful because nobody can be against it, while nobody can pin down what, in practical terms, it means.