Ths HOPE Center had what we believe was another round of superb workshops in 2020–21. Here is a narrative recap of the 24 papers that were presented.
The year began with the draft of a chapter from Steve Medema’s book in progress on the Coase theorem. The raison d’être for the book lies in the juxtaposition of the traditional narrative about theorems and the life of the Coase theorem itself. As Steve explains, “The development of the Coase theorem has been shrouded in misremembrances, political controversies, and all manner of personal and communal confusions and serves as an excellent exemplar of the messy process by which new ideas become scientific knowledge.”
We next turned to Vienna. Ohad Reiss Sorokin, HOPE Center fellow and PhD student at Princeton University, discussed the closing chapter of his dissertation, which focuses on the Viennese Geistkreis. In the closing chapter, Ohad explores the different ways in which the “Kreis” (“circle”) as an idea and a model served the former Geistkreis members in America. As Ohad writes, “Participation in a Kreis, was, for them, more than a luxury. It was their way to satisfy a certain need they felt. Both this need and the recipe for its satisfaction, was not properly understood or recognized by their new colleagues in the United States, who often refused to participate in the Kreis-like endeavors initiated by the former Geistkreis members.”
Our third presentation kept us in Vienna, in a manner of speaking. Bruce Caldwell presented the introductory chapter to his forthcoming biography (written with Hansjoerg Klausinger) of Friedrich Hayek. The chapter begins with Hayek’s Nobel Prize and his Nobel lecture. Hayek identified inflation as the main economic problem of the time and blamed it on (and these are Hayek’s words) “policies which the majority of economists recommended and even urged governments to pursue.” “As a profession,” Hayek said, “we have made a mess of things.”
Methodology—and in particular pluralism and unification—took centerstage in our next presentation. Wade Hands of the University of Puget Sound used Paul Samuelson’s Foundations of Economic Analysis (1947) to argue that the relationship between pluralism and unification “is far more complex than this simple dichotomy suggests.” Although Foundations may have unified economics in important ways, “much of the motivation for this . . . unification was pluralist in spirit: not to narrow scientific economics into one single theory, but rather to allow for more than one theory to co-exist under a single unified derivational technique.”
What was Charles Kindleberger’s graduate education at Columbia like? Perry Mehrling provided an answer in his presentation, stressing the central role of Henry Parker Willis in Kindleberger’s development as an economist. As far as Willis was concerned, “students like Charlie were exactly what the Fed needed as it sought to build a more adequate foreign exchange staff,” and Willis’s “life project of knitting together the sprawling United States monetary system” inspired Kindleberger’s project of doing the same for the international monetary system.
Interdisciplinary work was the focus of our next presentation, as Gianluca Damiani, HOPE Center fellow and PhD student at the University of Florence and the University of Turin, offered a historical reconstruction of how game theory and formal analysis spread from economics into political science. Gianluca’s account centers on the role of William H. Riker. Gianluca concludes that Riker, whose model of economics was as a system of forces, “was closer to what economics used to be—or to be perceived—than to what economics really was—or was becoming—at the time.”
Monetary issues were the subject of our next workshop presenter. Sofia Valeonti, HOPE Center fellow and recent PhD from Paris 1, discussed her efforts to reconstruct the monetary debate that took place during the U.S. Reconstruction. Focusing on the writings of Hugh McCulloch and John Sherman, Sofia traces the links between their policy proposals, their political economy, and their vision of economic development. McCulloch and Sherman wanted to integrate the US economy into the world market. McCulloch thought that they way to do that was to combine specie payments and free-trade policies, while Sherman wanted to combine specie payments with protectionism.
Just as we saw economics interacting with political science in Gianluca’s presentation, we saw in our next workshop economics engaging with philosophy—or perhaps the other way around. The workshop focused on the American philosopher Charles S. Peirce. Kevin Hoover explained how Peirce discovered Cournot before the marginalist economists and possessed a deeper appreciation of his mathematical approach. “Economics plays a larger and more fundamental role in Peirce’s philosophy of science than is generally understood,” Kevin writes. As an example, Kevin mentions Peirce’s Harvard Lectures, which uses economics to illustrate pragmatism.
Agriculture and development were brought together in our next workshop. Paul Burnett of the University of California discussed Theodore W. Schultz (1902-98), a Chicago economist trained in agricultural economics and involved in federal farm policy. Schultz connected Chicago research projects to questions about international economic development. As Paul explains, Schultz, despite winning a Nobel Prize, is seldom mentioned in accounts of Chicago economics or US agriculture. Yet “it is hard to explain the global influence of Chicago economics without highlighting his organizational and political acumen, professional networks, and ability to influence scholarly and practical conversations in the fields of US farm policy and international development work.”
Game theory was again the subject of a workshop, this time by Catherine Herfeld of the University of Zurich and a former HOPE Center fellow. Catherine presented on her work with Malte Doehne on the way in which the social structure of a research institution and the presence of “academic opinion leaders” shape the adoption of scientific innovations and help them spread. They use as a case study the early engagement of mathematical economists at the Cowles Commission with John von Neumann and Oskar Morgenstern’s Theory of Games and Economic Behavior. People like Jacob Marschak, “who were not only scientifically but also organizationally central, played a key role in promoting the adoption of the Theory of Games.” Catherine and Malte support their argument with a scientometric analysis of acknowledgments made in papers published by Cowles.
National pride along with measurement issues was taken up in our next workshop, which focused on efforts to measure and understand the importance of “dead loss,” which measures available surplus in order to gauge economic efficiency and social welfare. As Raphaël Fèvre of Université Côte d’Azur explained, dead loss was the subject of an early postwar controversy involving Maurice Allais, François Divisia, Harold Hotelling and Gérard Debreu. As Raphaël and his coauthor Thomas Mueller show, the controversy was driven by a mixture of advances in welfare economics and Allais’s ambition to revive French economics. “Eventually, this controversy (and the tense personal exchange between Allais and Debreu that came with it) proved a remarkable—though tacit—driving force behind Debreu’s contributions of the early 1950s.”
Was Milton Friedman the “last conservative”? Our next presenter, Jennifer Burns of Stanford University, discussed her upcoming biography of Friedman that asserts as much in book’s title. Jennifer’s presentation centered on the 12 years between Friedman’s time at the University of Chicago as a student and his return there as a faculty member. Friedman, Jennifer argues, was defined by a certain dualism—“at once deeply conservative and strikingly innovative.” Although Friedman eschewed Keynesian economics, he forged in his dissertation a unique synthesis of price theory and institutionalism, using NBER approaches and methods to give a rich empirical dimension to the theory he had learned at Chicago. “In this interregnum, he had left Chicago, but Chicago had not left him.”
Interdisciplinary relations again figured into one of our workshops, this time forming the subject of Roy Weintraub’s presentation, which historicized the difficult relationship between economics and science studies. As Roy explains, while figures like Deirdre McCloskey and Phil Mirowski were loudly criticizing this or that aspect of economics, Roy was busy telling the history of economics as it actually existed, from a range of perspectives that shed light on the subject. “My concern,” he writes, “was to find ways of talking and writing about the history of economics very broadly in terms of the sociology of economics, the rhetoric of economics, the anthropology of economics and so forth. In short, I was trying to find ways to write rich and compelling narratives in the history of economics.”
The Port Huron Statement, the Free Speech Movement, the Radical Education Project—these reform initiatives and more were the subject of our next workshop, by Tiago Mata of University College London. Tiago presented two chapters of his book in progress on the new left and how it tried to change economics. His book, tentatively titled Radical Expectations, tells the story of a group of economists that in the late 1960s and 1970s set out to produce economic knowledge in participatory ways, at a time when universities were accused of complicity with acts of militarism and racism. “The real legacy of radical economics, Tiago concludes, “is not found in professional settings but in its record among social movements.”
The 2021 HOPE conference will be about women in economics, so it is fitting that the next workshop paper examined Barbara Bergmann and her occupational crowding hypothesis. Sarah Small, a HOPE Center fellow and PhD student at Colorado State University, positioned Bergmann’s hypothesis as predating heterodox initiatives such as the founding of the International Association for Feminist Economics and its journal, Feminist Economics. But Bergmann operated in the mainstream of the discipline too, taking on the likes of Gary Becker and his theory of marriage: as Sarah writes, “Bergmann was an economist who had one foot in neoclassical circles and the other in heterodox circles, and often ruffled feathers in both.”
Similar to Ohad’s paper about the Geistkreis, the paper presented by Lachezar Grudev at our next workshop took up an effort to adapt and thrive in a new environment. Lachezar, a HOPE Center Fellow and PhD student at the University of Freiburg, presented case study of how Friedrich Lutz, a German economist educated in a scholarly world dominated by the Historical School, became part of Anglo-American economics. Still, Lutz remained out of step: he never acquired the mathematical skills that were revolutionizing the discipline, and he could never accept a mathematical treatment that neglected the role of institutions in the economy. Lutz eventually returned to Europe to continue his research in the ordoliberal tradition of the Freiburg School.
The tension between spontaneity and design was the subject of our next workshop. Nathanaël Colin-Jaeger, HOPE Center Fellow and PhD student at ENS Lyon, discussed the tension in connection to the work of Friedrich Hayek. Nathanaël seeks to resolve the tension by interpreting Hayek as defending a radical liberalism—“the only way to make sense of Hayek’s positions.” As Nathanaël explains, radical liberalism seeks to change the very framework of things. Hayek therefore defended the possibility of designing a liberal spontaneous order, and thus his liberalism should be understood as a theory that teaches us how to form a beneficial, liberal, complex spontaneous order.
Jan Tinbergen is known for his sometimes paradoxical policy positions, which our next workshop presenters set about explaining. Michaël Assous and Vincent Carret of the University of Lyon provided a comprehensive view of Tinbergen’s macrodynamic models during the 1930s and early 1940s. Tinbergen’s concerns evolved from problems of instability to the idea of reaching higher positions of equilibria. As the authors write, “The possibility of multiple equilibria was an important thread followed by Tinbergen throughout the 1930s and early 1940s as he tried to understand the behavior of dynamic economic systems. Presenting it provides new insights on his contribution and the way he understood the potentiality—and dangers—of economic policy.”
Residential segregation was the subject of our next workshop. John Kroencke, HOPE Center Fellow and a new PhD from George Mason University, provided an account of the role of Richard T. Ely in residential housing research and policy during the interwar period. Building on the work of urban historians, John argues that Ely played an important role in residential segregation and the social scientific justification for it. Those aspects of Ely’s career are effectively missing from the contemporary history of economics literature despite the importance of the topic and recent interest in the role of racial thinking in economics. Ely’s intellectual background, his academic work, and his foundational role in an academic network helped establish a formal system of residential segregation based on social scientific principles.
Henry G. Manne described himself as the only full-time missionary for law and economics from the first glimmerings of the subject. Our next workshop, given by David Gindis of the University of Hertfordshire, dealt with the period of Manne’s career when he first assumed that role, which coincides with his time at the University of Miami Law School (1974-1980). Prior to Miami, Manne had formulated a vision for law and economics, and developed prototypical structures for funding and running interdisciplinary conferences and economics courses for law professors. Manne professionalized these at Miami. As David explains, Manne, using the organizational vehicle of the Law and Economics Center (LEC), played a pivotal role in both the constitution of law and economics as intellectually integrated disciplines and the emergence of a genuine law and economics movement in American law schools.
Just what was Marshall’s role in shaping modern economics? Maybe not as large as we believe, according to our next workshop presenter. Keith Tribe of the University of Tartu (Estonia) argued that the pedagogic plan of the Cambridge Tripos only distantly reflected Marshall’s Principles. Instead, the template for the modern economic textbook owes far more to Lionel Robbins’ LSE lectures during the 1930s than to Marshall’s landmark text. By the 1930s, Tribe argues, Marshallianism was already superseded, relegated to a pre-history by an emergent “economic science” divorced from substantive connection with the “ordinary business of life” that was at the center of Marshall’s concerns.
The cross-fertilization of economics and other disciplines made a return in our next workshop. Hester van Hensbergen, HOPE Center Fellow and a PhD student at Cambridge University, outlined Georgescu-Roegen’s understanding of the entropy law in the 1960s as a tool for understanding the active history of the world and thereby the economic process. The publication of The Entropy Law generated enormous interest amongst a wide readership. Environmentalists and environmentally concerned economists saw the potential for a “blueprint” for a new economics in Georgescu-Roegen’s book. Georgescu-Roegen demurred, however, asserting the unpredictable course of history and evolution and critiquing the Yale theorists of the stationary state. In time, Georgescu-Roegen found that the challenges of entropic development in the 1970s could provide a vessel for a new kind of ecologically motivated agrarianism in a borderless and depopulated earth.
Diagrams and their role in economic analysis was the focus of our next workshop. Yann Giraud of Cergy Paris Université discussed a group of British-born or British-raised scholars connected to the London School of Economics for whom visualization, more specifically the use of diagrams as means of reasoning, played a crucial role. As Yann explains, they found diagrams effective as research tools—in addition to the fact they were pretty proficient at using them—because the diagrams could be used to translate one theory into another, allowing for the comparison between seemingly incompatible research frameworks and easing conceptual clarification. Diagrammatic analysis represented a good way to make use of a variety of economic theories in order to increase their intelligibility and communicability within a relatively close-knitted group of academics.
The Austrians are known for rejecting formal methods. But as Alexander Linsbichler, HOPE Center Fellow and lecturer at the University of Vienna, explained in bringing our workshop year to a close, their opposition to formal methods may not line up with their actual practice. As Alexander concludes, the most prominent representatives of Austrian economists (Carl Menger, Ludwig Mises, and Friedrich August Hayek) neither provide a justification for a rejection of formalization tout court nor actually reject it. The NeoAustrians who do reject formalism seem to rely on an unconvincing Sprachgeist argument traceable to Friedrich Wieser.
Slider image courtesy of Pixabay.