OPINION
Page 4 Monday, March 14, 1988 The Michigan Daily

Economics

d

By Dean Baker
and Mark Greer
x, this is the first of a two-part series
Suppose the University of Michigan had
adepartment of astrology, where 50 plus
professors did research on the latest devel-
opments in astrology, figuring out all the
ways in which the stars and planets deter-
mined our destinies. Let's also assume
'they had a graduate program for promising
young astrologers, and undergraduate
courses, where undergrads could gain some
acquaintance with the field. Let's assume
further that there are similar astrology
programs at colleges and universities all
over the country (some obviously more
highly ranked than others), and journals
that publish the latest discoveries in as-
trology, and that some astrologists find
employment in business and government
where they give advice on investment and
policy decisions.
2Most of us, who don't consider astrol-
ogy a serious field, would find this state of
affairs somewhat troubling. Not only
would all the money being used to support
astrology departments and astrologists be a
K gigantic waste, but their impact on the
decisions of governments and corporations
could be quite dangerous. We might like
~ to think that such a state of affairs could
not possibly exist, however, since as-
tronomers and others, with more soundly
grounded theories, would drive out the as-
trologists with their superior arguments.
We are going to argue that this is not
necessarily true, that something very
much like an astrology department does
exist at the University and elsewhere, and
that due to the structure of power relations
within the University and society at large,
it is likely to continue to exist in its pre-
sent form into the indefinite future.
Specifically we are going to examine how
the economics department here, and the
discipline as a whole, act to silence critical
voices. Furthermore, we will show how
the discipline acts to provide ideological
support for the status quo, including the
reinforcement of racism and sexism both
" within the discipline and in society at
large.
We should begin by pointing out how
extraordinary it is to present the sort of
criticism we are making in a forum out-
side of ,the discipline. Economists
(presumably like most academics) consider
themselves to be the sole judges of what
is valid in their discipline. There is a cer-
tain solidarity within the discipline, com-
parable to that within a fraternity, that
Dean Baker and Mark Greer are Ph.d.
candidates in economics. This essay was
signed by 28 graduate students in the De-
partment of Economics, 26 of whom re-
quested anonymity forfear of reprisal.

weighs strongly against taking any dis-
putes outside "the department." There are
strong social and professional sanctions
against those who violate this solidarity.
It is only because of the fact that we have
become so completely convinced that the
economics department here has no interest
in either the force of our arguments, or in
respecting us as individuals entitled to in-
put into departmental decisions, that we
have decided to commit this breach of
faith. We do not take such action lightly,
but rather because we believe there to be
serious problems within the discipline that
cannot be rectified internally, that have
significant implications for those who
have not had the privilege of an advanced
education in economics.
The first point we wish to establish is
the refusal of the discipline of economics
to allow for significant criticisms of
established orthodoxy. A manifestation of
this refusal at our department is the ongo-
ing attack on those fields where any sort
of alternative or critical view is likely to
be considered. In the last several years the
department has lost two professors in
Economic History, two professors in Po-
litical Economy, the only professor in
History of Economic Thought, as well as
several faculty members in more main-
stream fields who were less prone to ac-
cept the existing orthodoxy. Furthermore,
graduate students are actively discouraged
from taking alternative fields, or from
pursuing dissertation topics outside the
mainstream of the discipline. Pursuing
such alternative approaches is generally
viewed as a sign of limited intellectual ca-
pacities. This crackdown on alternative
approaches is not unique to the Univer-
sity, but may be more evident here be-
cause there has been a conscious and con-
certed effort in recent years to take what
had been a relatively broad program and
turn it into one of the more narrowly
structured ones.
Such a narrowing could be justified if
the mainstream had somehow proven the
validity of its approach and discredited the
alternatives. This isn't obviously true,
however, based on either the empirical
success of the mainstream theories (their
ability to accurately make predictions
about the economy), or the logical rigor of
the mainstream theories as opposed to the
alternatives. The recent narrowing of the
discipline, here and elsewhere, has been
accompanied by an increasing refusal to
even debate points at issue. In one of the
rare cases where debate actually took place
between those within the mainstream and
those on the periphery, the mainstream
view prevailed even though its proponents
admitted that they were wrong. This de-
bate, on the definition of "capital" resulted
in two Nobel prize winners admitting that
their arguments were in error, yet the
theories that were successfully attacked

ept. co
continue to appear in introductory text-
books and are taught even at the graduate
level. Even at the most advanced levels of
study very few people are aware of the
sorts of problems raised by the unorthodox
participants in the debate.
While the issue raised in the capital
controversy may not be the most serious
criticism directed against the mainstream
theory, it is an important one, and is re-
vealing in that it shows that factors other
than the logical strength of arguments
were decisive in determining the disci-
pline's direction. More fundamental criti-
cisms can be made based on the fact that it
is glued to a view of the individual devel-
oped by 19th century utilitarian philoso-
phers that is now widely discredited, and

ntinues
from public debate by reference to some
economic theory or study. An excellent
example of this occurred last month when
one of the leaders of the anti-rent control
organization in Ann Arbor claimed that he
could not debate the issue publicly, be-
cause "Keynesian economics" was too dif-
ficult for most people to understand. As it
turns out, there is nothing in Keynes'
work to argue against rent control, but
this is an example of the way in which an
appeal to expertise can be used to remove
an issue from public debate.
Economists write frequently on all sorts
of issues, generally using obscure techni-
cal language and methods, so that the av-
erage person would feel unqualified to
challenge their work, however shoddy it

"...the economics department here has no interest in either
the force of our arguments, or in respecting us as individuals
entitled to input into departmental decisions..."
Statement signed by 28 economics graduate students

also that its assumptions about the nature
of human knowledge are also widely dis-
credited. While it may seem that develop-
ments in other disciplines that undermine
fundamental assumptions in economics
would be important matters of concern for
economists, those pursuing such issues
are usually ignored altogether. As the field
narrows, it seems that foremost among its
standard set of assumptions is that its as-
sumptions cannot be questioned. Those
doing so are encouraged to go into other
disciplines, where their work need never be
considered by economists.
The silencing of critics of the economic
orthodoxy would be grounds for concern
even if economics were only an academic
pursuit. But because economics often in-
terjects itself into politics and provides the
legitimization for government policy, this
effort to squelch dissent is an even more
serious matter. There are two senses in
which the current orthodoxy in economics
has had a negative impact on political de-
bate. First, economics is often used to re-
move issues from political debate. By re-
ferring to seemingly complex economic
doctrines it is often possible to convince
large segments of the electorate that they
lack the ability to have meaningful input
on issues. Secondly, economists are often
very selective in their studies as to what
issues are to be taken under consideration.
Economists would like to view their work
as uncovering objective truths that are in-
dependent of one's political beliefs; in fact
their political beliefs are deeply imbedded
in their theories and studies.
Starting with the first point, it is easy
to find examples of situations where indi-
viduals have attempted to remove issues

may be. Economics places a considerable
premium on developing such obscurity.
Arguments premised around very silly
ideas about the economy or individuals'
behavior but involve complicated math are
far more highly regarded within the disci-
pline than arguments that have very pro-
found insights, but are mathematically
simple. For example, the cutting edge of
business cycle theory explains the unem-
ployment experienced in economic down-
turns as the result of workers' decisions to
take prolonged vacations (if the reader
finds this too outrageous to believe see
Kydland and Prescott, Econometrica 1982.
pp 1345-1370.) The emphasis placed on
math is so extensive that an individual
taking graduate level courses would learn
less about the institutional structure of the
economy than someone taking an Intro.
course. Most of the time in graduate study.
is spent applying more complicated math
to concepts taught in the Intro. courses.
As these arguments are buried in ever
more sophisticated mathematical tech-
niques fewer individuals will possess the
training needed to evaluate them on their
own terms.
The second problem with the use of
economics in politics lies in the assump-
tions underlying much of the theory. For
example, it is common for economists to
make judgments about the "efficiency" of
particular policies while completely
ignoring the institutional framework in
which such policies are being considered.
Again rent stabilization provides a good
example. An economist might say that
rent stabilization is not an "efficient" way
to help low income people to obtain af-
fordable housing, since it also helps many

purge
people who are economically well off.
This criticism on efficiency grounds be-
comes completely irrelevant when one
considers that it is inconceivable that there
will be sufficient political support to im-
plement housing policies more directly
targeted to the poor in the near future.
Economists' arguments often have this
character of measuring a real world policy
against a nonexistent ideal state. When the
real world policy is shown to be inferior
to this ideal state, it is then used as an ar-
gument against the policy: Such reasoning
pervades everything from arguments
against food subsidies in third world na-
tions to arguments for free trade in the
United States. In the former case it is ar-
gued that it is more efficient to give poor
people enough money to buy the food
they need rather than subsidize everyone's
food, evenrthough nosbureaucracy gener-
ally exists to provide such grants effec-
tively. In the later case it is assumed that
anyone losing their job due to import
competition is immediately reemployed in
another sector of the economy, ignoring
the likelihood of unemployment. These
arguments can be criticized within the dis-
cipline by pointing out their flawed as-
sumptions, but unless such criticisms
employ new mathematical techniques,
they are unlikely to have any impact on
the debate.
Even in rare cases where orthodoxy is
called into question by work that would
seem to undermine one of its basic tenets,
the victory is usually short-lived: There
are large amounts of research money and
prestige to be gained from right-wing or-
ganizations like the American Enterprise
Institute to develop counter-arguments
supporting the existing orthodoxy. Also,
one of the beauties of mathematical mod-
els is that it is always possible to recon-
cile any real world experience with any
basic model, if one is willing to be suffi-
ciently dishonest, and to play with one's
data or model enough to get the appropri-
ate statistical fit. The conservative nature
of most outside funding sources, combined
with the malleability of the models em-
ployed by economists working within the
orthodoxy, act to reinforce the reluctance
within the discipline to re-examine its ba-
sic tenets.
The political implications of this right-
wing bias should be fairly obvious. When
political debate is turned into an issue to
be resolved by "experts," those who can
buy the most experts are likely to come
out on top. It may be overly crude to
imagine that the influence of money, jobs,
and power could be so direct, but eco-
nomics has taken a sharp rightward turn in
the Reagan years.
this series will be concluded tomorrow

I_ _ .

Edited and managed by students at The University of Michigan
Vol. XCVIII No. 109 420 Maynard St.
Ann Arbor, MI 48109
Unsigned editorials represent a majority of the Daily's Editorial Board. All other
cartoons, signed articles, and letters do not necessarily represent the opinion
of the Daily.
Don't vote for CIA rights

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Fleming fails on institutional racism

TOMORROW, MICHIGAN STUDENT
Assembly representative Dan To-
bocman will re-propose a resolution
condemning anti-Central Intelli-
gence Agency (CIA) protestors for
interrupting recent recruitment
efforts at the University Law
School. The resolution, tabled by
the assembly last week, is filled
with double standards.
First, affirming the legitimacy of
the CIA while simultaneously
claiming solidarity with the people
j of El Salvador, who are repressed
by groups directly supported by the
CIA, is hypocritical..
Second, Tobocman considers
protesting CIA recruitment
analogous to protesting such
worthwhile movements as the "Say
No To Drugs" campaign or the
"Student Conservation Association"
recruitment. This is an absurd

w

approval of a
Tobacman
implications
He asserts
function of
produce the
our society

terrorist organization.
does not realize the
of involving the CIA.
that "the primary
the University is to
educated people that
needs." He further

states that "the prime concern of
most students at the University is to
prepare themselves for a career."
Unfortunately, Tobacman, and
apparently the University, feel that
Michigan is preparing students for a
career torturing and murdering
civilians. Further the country is in a
sad state if what it needs is not
necessarily a better economy or
government, but more spies.
CIA recruitment on campus is not
an issue of free speech. The CIA
has no first amendment rights. The
Bill of Rights was written to protect
civilians from government control.

By Ken Weine
Interim President Fleming's latest
proposal on Discriminatory Acts on
Behalf of Students, demands outrage and
action from the student body.
First, the policy represents an
inappropriate means of dealing with
racism which distracts from the anti-racist
movement. To effectively combat racism,
the administration must deal with the core
of the problem; institutional racism.
Fleming, however, has spent his energy
proposing codes applicable to students
rather than dealing with this problem.
Fleming has repeatedly failed to combat
institutional racism. Visible examples of
this failure include his refusal to cancel
classes in honor of Martin Luther King
Day, his effectivelyamute behavior in the
face of LSA Dean Steiner's racist
comments, and his lack of leadership on
the implementation of a mandatory course
on diversity. (Which the University of

administrator acting as both judge and
prosecutor controls "hearing" in the
interest of the university. N o t
surprisingly, students' right to legal
representation are denied. There are no
rules of evidence. Also, the Vice President
for Student Services determines in the
final analysis guilt and the "appropriate"
punishment.
In addition to the above substantive
problems with Fleming's code, it's largest
flaw is procedural. Fleming's proposal is
undemocratic because it does not respect
students' right to approve or reject any
code of nonacademic conduct as regents
bylaw 7.02 requires. Students won their
"7.02" right to approve or reject a code
when Fleming was university president in
the 70s.
Now, in the 80s, Fleming is attempting
to roll back students' democratic control at
the university. Apparently Fleming is
attempting to regain the control over
students that he lost more than a decade

hard-won rights.
Lastly, the sincerity of Fleming's
solicitation of comments about the
proposal from the university community
is questionable. While it took Fleming,
and his legal staff, six weeks to write his
new draft, responses are due in two weeks.
Two areas of his proposal, the hearing
board composition and trial procedures, are
"available at a later date," thus exempt of
comment. Amusingly, as responses are
due the 14th and the Regents vote is the
17th, only two days are provided for
Fleming's review and codification of
comments.
However, at next week's Regents
meeting students will have an opportunity
to respond to Fleming's proposed policy
in what is unfortunately the only way the
administration listens to students, protest.
This response should demand that Fleming
combat institutional racism, respect
student rights, and uphold Regental Bylaw
'7 M~