Archive for September 23rd, 2009

The New York Times published an editorial on Tuesday on a case currently before the United States Supreme Court that, on its face is,

a fairly narrow campaign finance case, involving whether Citizens United, a nonprofit corporation, had the right to air a slashing movie about Hillary Rodham Clinton during the Democratic primary season.

In addition to posing a possible threat to the election system, this case highlights the greater question of corporate personhood- in other words, what rights and responsibilities should be given to corporations?  Historically, the United States has been very generous in granting rights and very reserved in demanding responsibilities of corporate entities.  The dangers of this combination are myriad (watch the movie online, read the book, or read a summary for an introduction to critiques of corporations).  As the Times editors write,

To us, as well as many legal scholars, former justices and, indeed, drafters of the Constitution, the answer is that their rights should be quite limited — far less than those of people.

This Supreme Court, the John Roberts court, seems to be having trouble with that.

The structure of the corporation is, arguably, one of the contributing factors to our current economic crisis.  Any discussion of systemic solutions and prevention of similar crisis in the future must consider the role of the corporation.  As a society we tend to assume that our corporate system is identical to that of the rest of the world (not true) and that this structure is an absolute and unchangeable given (not true).

Do we have the will (political and otherwise) to question the role we have given the corporation and the serious consequences of that role?  Probably not.  Let’s do it anyway.

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A former ECOP faculty member gives her two cents:

Economists need to be broader, more self-critical, deeply knowledgeable about economic institutions. This is why it’s dumbfounding that the University of Notre Dame created an economics department filled — by intent! — of only neoclassical economists and banned their Ph.D. economists who are policy-oriented and non-orthodox from the department.I since left — happily, to head to the New School for Social Research — but I started my career on the Notre Dame faculty attracted by its mission to address problems facing humanity and thrived where neoclassical economists interacted with historians, policy economists, Keynesians, Marxists, philosophers, and other faculty deeply committed to the same goal.

Notre Dame students, faculty, and scholars everywhere question ND’s move. Orthodoxy and intolerance in the economics profession helped plunge the world into the deepest recession since the 1930s: It doesn’t take a rocket scientist — or even an economist — to recognize narrowness has a cost.

Here is a modest recommendation for this aspiring top-tier university: Put all the economists it hired for the economics department in an economics department and let ideas interact. After all that is what universities do and what economic thinking and economic regulation needs.

HT: Anti-Capitalism

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At first I thought that blog post title was a slight at our football team, which is underachieving for its fourth straight season. Alas, it is actually Daniel at Crooked Timber’s rather scathing take on ECOP’s closing.

Do you find yourself considering the financial crisis and thinking “well, neoclassical economists have certainly come through this one with their reputations enhanced! Anyone with a world-class heterodox economics department should certainly be thinking about closing it down right now, there’s no interest in that sort of thing!”. Well, if you do, then you’re almost certainly working as an administrator at Notre Dame University (or for that matter, the University of Notre Dame, thanks Ben in comments), because nobody else does.

I mean, what the byOurLady heck do they think they are playing at. Back in April 2008, the decision to place clear fresh water between the nice professional efficient market types in the “Economics and Econometrics” department, and the dirty f**king hippies in “Economics and Policy Analysis” might have made some sort of sense, in that while cynical and not very academic-freedom-y, it would have improved students’ chances of getting into prestigious economics graduate programs where they could write “counterintuitive” and “fascinating” job market papers about penalty shootouts and speed-dating (these being the only remaining social or anthropological questions not thoroughly answered by neoclassical economists, cf “Freakonomics”).

But today? With the whole field blown wide open and all sorts of questions of the role of economic analysis wide open to debate again? With Richard Freaking Posner coming out as a post-Keynesian? I suppose that if you truly believe that it’s impossible to time the market, this is one way to prove it.

Chris Hayes’ tweet was along the same lines:

Notre Dame is dissolving its heterodox economics department, since neo-classical econ has performed so well of late.

Pissed off like all of us, and these guys? Spread the word on our petition (which has surprising momentum at 698 signatures): http://www.ipetitions.com/petition/SaveEconomicsND/index.html

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More on that GDP Report

I meant to write about this report upon its release last week, but recent events have gotten in the way (and apparently the New York Times is a week late as well). In the article, Stiglitz states the over-arching problem as well as anyone could:

If you don’t measure the right thing, you don’t do the right thing.

Of course, the report is lacking in solutions, and if its authors have been paying attention to more heterodox fields like ecological economics, it doesn’t really add much new.

The report is more critique than prescription. It elucidates in general terms why leaning exclusively on growth as an economic philosophy may yield unhappiness, and it suggests that the incomes of typical people should be weighed more heavily than the gross production of whole societies. But it sidesteps the thorny details of slapping a cost on a ton of pollution or a waylaid career, leaving a great mass of policy choices for others to resolve…

Indeed, the difficulty comes in turning these general principles into new means of measurement. The report notes that its authors concur on the big picture, but diverge on the methodologies to be employed when it comes to factoring in the value of a better education and cleaner skies.

My guess is that they would make much better headway if they would collaborate with those outside the mainstream, like Herman Daly, for instance, who have been thinking about these issues for decades.

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