Long-time readers of this blog know that I am an apostate of the economics discipline. When I was 17, I wanted to study something that would be useful to help make the world a better place. I thought that economics would meet that requirement, and it also seemed natural since I always had a strong interest in politics, in particular the question how to organize society. For reasons explained here, I eventually gave up the hope that economics (as I studied it in the 1990s) could give me that knowledge, and diverted to political theory/philosophy and later also ethics, where I’ve been happy ever since.
But for the first time since many years, I felt a shiver of regret for having left economics – and that was when in April this year I started reading Capital in the Twenty-first Century, the best-selling book by Thomas Piketty. Reading Capital was a great intellectual adventure, while at the same time enjoyable to read (many have said the translator, Arthur Goldhammer, deserves part of the latter credits). It is hard for academic economics to evoke positive feelings in its readers, but Capital did so with me for at least two reasons.
One is that the book is extremely interesting and rich, as by now many have pointed out. It brings economics back to the wider public, and gives the reader a true sense of what is at stake in studying the economy and hence engaging with economics. It opens up economics to all those for whom the study of economics is relevant – that is, all of us.
The second source of excitement came from my sense of what this book could do to change the economics discipline. Students of economics have been advocating for years that economics is too narrow, too much focussed on elegance and mathematical beauty, insufficiently rooted in both history of economic thought and empirical economic history, and insufficiently aware of the institutional and cultural context. None of this applies to Capital. In fact, I think that by putting forward such a strong, historically-based, empirically-grounded, and theory-rich account of the workings of capitalism and the resulting inequalities, Piketty is offering us a concrete alternative for how to do economics.
Heterodox economists have tried for years to say how economics as a discipline should change. In my view, overall they have failed to make much of a difference (that is not the same as saying that their arguments were bad or unconvincing!). Economics by now is a science where the mainstream is extremely powerful; other social sciences are much more internally pluralistic/heterogenous. Hence, it is hard to be a happy heterodox economist working in an economics department (with the exceptions of the handful of heterodox departments that are left). So I am not surprised that many heterodox economists left the economics discipline – and moved to economic history, development studies, economic geography, political theory, even philosophy.
Thomas Piketty has the power that heterodox economists never had. He has shown how economics can be done differently. He is a professor of economics at a prestigious university, hence he is situated squarely within the center of the economics discipline. He hasn’t used elaborate meta-theoretical critiques to show why mainstream economic models and methods fall short, but simply put into practice a different way of doing economics – while en passant noting that some of his findings are beyond the radar screen of mainstream economics because of their built-in assumptions. Sure, he’s not the first to have worked with such methodological commitments, but with the success of Capital, and building on the academic credibility gained by his earlier scholarly articles and books, Piketty may have the power to make a real difference to how the economics discipline in the near future will look like.