A pair of readings, not obviously linked, and a suggestion for a new direction. First reading: Philip Mirowski (I think) on behaviorial economics. Second, a piece in The Economist Christmas issue about (ambivalent quasi-irony alert) "The Servant Problem."
First Mirowski. Mirowski probably qualifies as the most sophisticated (if not always the most deft or readable) critic of "the standard model" in economic thought--I mean the schizoid mathematicizing, the stylized assumptions, and the artful suppression of all interesting anomalies that have come to dominate the profession since the coming of Paul Samuelson. Here (via an intermediary) he weighs in on the new behaviorism but wait, it's not what think. Very far from seeing the behavioral turn as a refinement in or advance on the traditional model, he treats it as almost unreservedly retrograde--a running dog of the neo-liberal consensus, serving only to distract attention from its tattered and threadbare apparel. So presumptive good guys like George Akerlof, Robert Schiller and Robert Frank wind up as, at best, useful idiots in prorecting a maleficent status quo.
It's an interesting read at least, but its core principle seems to be that the new critique is far too tentative and feeble to put anything more ambitious than llipstick on this particular pig; In this respect it strikes me as ironically similar to the standard response of the old guard: that the new critics may be tinkering with the flanges on the exhaust pipe, but they haven't yet got anyplace close to the carburator. Either way, the standard model stays in place; the only question is whether you like it that way.
Now turn for a moment to The Economist's take on servants. The immediate question is: servants, why have them? To do the dirty work obviously, but the E, channeling Veblen, makes the point that it's far more complicated than that. Having a servant may or may not be a "convenience"--part of the point of the essay is that servants can be a damn nuisance. But they are also marvelous as a prestige good. They show that you've got money enough to set fire to. They show that you can buy occasions public humiliation (the other guys'; not your own) and for pointless display ("pointlessness" being precisely the point).
I suppose an imaginative defender of the economic status quo could squeeze all this into a utility function, but there's really no suggestion that any of them ever does it. And without quite yielding to the point about running dogs, I'd have to say that Mirowski (and the mainstream defenders) here are onto something here: "behavioral economics" may offer some fragments of entertainment, but for good or ill there is nothing much here that lays a glove on the mainstream behemoth. So the sanding-over of difficulties continues and we wind up with an "economics" which is, apart of from the equations, bloodless and content-free. I'm speaking now on analogy to Goethe's critique of Newton's theory of color--a theory which, as Goethe put it, contains everything except color itself.
I suppose Mirowski would say "that's the point, their job is not to disturb anything." And the defenders would say--oh, it's early yet, it's only a matter of time.
So I'm on board with the idea that behavioral economics hasn't offered much yet. I'm agnostic on the question of how much more than I can do. And I'm a bit shaky on where to go next. I admit I am uncomfortable with the apocalyptic tone of the Mirowski critique, at least insofar as it begins to sound like standard leftism. I'll confess it here: in the current mode I think I hate bankers as much as the best of them but at the end of the day, I'm an unreconstructed neoliberal. I can't imagine any world at once attractive and plausible other than a world with public structures and private purposes, in which we see "creatures going about their business among the equally/Earnest elements of nature." I could be a crank (perhaps am already) but could never be a very good rebel.
Which brings me back to Veblen again. Does anybody read him any more, except perhaps the odd young striver at the E? He was still in fashion when I first started college nearly 60 years ago. Moreover, he even counted as economics--at least as part of economics, a part you were permitted not to minimize or ignore. And so I'm wondering if it isn't time for a Veblen revival: for fresh reading of a guy who understood that economics was not (just) about LaGrange multipliers and Edgeworth boxes: it was about power and status and victimhood and the contest for domination in an unruly world.