My friend Imran has sent this painting of Kazi Nasir to me. I like it- simple composition, but poignant. I do'nt know why it reminds me of Sidney Nolan.
Wednesday, March 25, 2009
Tuesday, March 3, 2009
Inexactitude? Exactly!
The description looked sexy to me: "Inflexibility and falsifiability in economics, and the failure of rigid worldviews". (http://sanhati.com/articles/1253/). I guessed rightly that Professor Bhaduri will be at his pugnacious best. I guessed wrongly that this is a serious critique against methodological foundations of mainstream economics. After a paragraph or so, it's clear what follows next, because by now, I know what usually follows next. Preachers and pedagogues repeat. Ramakrishna's did that, Professor Bhaduri's do that.
There's nothing inherently wrong in repetition. There's nothing logically wrong in analysing neoliberal economic ideology in the way he does. Problem lies elsewhere. More precisely, in this opening paragraph:
"A badly kept secret among economists should be shared with non-economists. Economic theory, insofar as it consists of results derived logically from clearly stated premises, is mostly precautionary knowledge which warns against unfounded economic propositions. Very rarely, is it positive knowledge for guiding policies. There is an even more fuzzy area of economic knowledge which infers from quantitative data through statistical techniques and historical analogies. Such knowledge is even more tentative, yet essential in a subject like economics where controlled experiments are impossible. With data generated over time subject to observational error, bias, and random shocks, we would do well to remember the saying of the Greek philosopher Heraclitus, a rough contemporary of Buddha, “It is never possible to step twice into the same river”."
Given the complexity of the problem and limitations of the tools at disposal, any serious economist should be wary of certitude. In fact, many of them are, and that's the origin of famous "Give me one-handed economist" joke. However, during last twenty years or so, mere pedagogic tools have become the "Holy Grail" of free-market religion, useful theoretical assumptions have become the Eternal Truth at the "end of history". "Theorems of welfare economics" first became an ideology, and then they became a credo. A new religion was born.
One of my favourite out-of-syllabus economics book was Deirdre McCloskey's "The Rhetoric of Economics". I became convinced, and still I am, that economics works best when it is instrumentalist, dealing with mundane management issues, with a short and medium-term view. "Inexactitude" and "falsifiability" of "dismal science" demand humility and self-discipline. It demands avoidance of "grand narratives". Interestingly, one of the most popular "grand narratives" of recent times- "Development with Dignity" have been authored by Professor Bhaduri himself.
It's a lucid and logical Neokeynesian macroeconomic model for Indian economy, charting the path towards full-employment. It opposes reckless anarchy of free-market fundamentalists, and avoids blunt absolutism of Statists. It incorporates a third category of co-ordination mechanism, one in vogue, "community" and "participatory democracy", neatly into the narrative. The model is not a rehash of ubiquitous Keynesian model, but neither it's greatly ingenious. It's Professor Bhaduri's way of "telling the story". And it's one of many "stories". I hope Professor Bhaduri seriously considers possibilities of plurality.
Smith, Marx and "story-tellers" of their times were brilliant narrators and rhetoricians, because their "stories" were more of serious moral philosophy and less of positive economics. Marx's "story" was persuasive, because he didn't balk at the idea of jumping headlong into political nitty-gritties. Professor Bhaduri is honest to acknowledge that his "grand narrative" presumes political mobilization which is not beyond "the realm of feasible politics", but he refuses to get into details. Neither we see any interest to delve deeper into moral philosophical issues. So "Development with Dignity" remains a curious "parable" with lofty aims, built with "inexact" tools, and "falsifiable" ideas of "reasonable economics".
We should remember Heraclitus. Boomerang is a rogue weapon.
There's nothing inherently wrong in repetition. There's nothing logically wrong in analysing neoliberal economic ideology in the way he does. Problem lies elsewhere. More precisely, in this opening paragraph:
"A badly kept secret among economists should be shared with non-economists. Economic theory, insofar as it consists of results derived logically from clearly stated premises, is mostly precautionary knowledge which warns against unfounded economic propositions. Very rarely, is it positive knowledge for guiding policies. There is an even more fuzzy area of economic knowledge which infers from quantitative data through statistical techniques and historical analogies. Such knowledge is even more tentative, yet essential in a subject like economics where controlled experiments are impossible. With data generated over time subject to observational error, bias, and random shocks, we would do well to remember the saying of the Greek philosopher Heraclitus, a rough contemporary of Buddha, “It is never possible to step twice into the same river”."
Given the complexity of the problem and limitations of the tools at disposal, any serious economist should be wary of certitude. In fact, many of them are, and that's the origin of famous "Give me one-handed economist" joke. However, during last twenty years or so, mere pedagogic tools have become the "Holy Grail" of free-market religion, useful theoretical assumptions have become the Eternal Truth at the "end of history". "Theorems of welfare economics" first became an ideology, and then they became a credo. A new religion was born.
One of my favourite out-of-syllabus economics book was Deirdre McCloskey's "The Rhetoric of Economics". I became convinced, and still I am, that economics works best when it is instrumentalist, dealing with mundane management issues, with a short and medium-term view. "Inexactitude" and "falsifiability" of "dismal science" demand humility and self-discipline. It demands avoidance of "grand narratives". Interestingly, one of the most popular "grand narratives" of recent times- "Development with Dignity" have been authored by Professor Bhaduri himself.
It's a lucid and logical Neokeynesian macroeconomic model for Indian economy, charting the path towards full-employment. It opposes reckless anarchy of free-market fundamentalists, and avoids blunt absolutism of Statists. It incorporates a third category of co-ordination mechanism, one in vogue, "community" and "participatory democracy", neatly into the narrative. The model is not a rehash of ubiquitous Keynesian model, but neither it's greatly ingenious. It's Professor Bhaduri's way of "telling the story". And it's one of many "stories". I hope Professor Bhaduri seriously considers possibilities of plurality.
Smith, Marx and "story-tellers" of their times were brilliant narrators and rhetoricians, because their "stories" were more of serious moral philosophy and less of positive economics. Marx's "story" was persuasive, because he didn't balk at the idea of jumping headlong into political nitty-gritties. Professor Bhaduri is honest to acknowledge that his "grand narrative" presumes political mobilization which is not beyond "the realm of feasible politics", but he refuses to get into details. Neither we see any interest to delve deeper into moral philosophical issues. So "Development with Dignity" remains a curious "parable" with lofty aims, built with "inexact" tools, and "falsifiable" ideas of "reasonable economics".
We should remember Heraclitus. Boomerang is a rogue weapon.
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