Since I’ve been getting some (well justified) flak from commenters for paying too much attention to interlocutors in the center and right, and not enough to e.g. Marxists, I’m going to try to turn the tables, by pointing out that some of these right wing interlocutors are in fact Marxists without knowing it. “Tyler Cowen”:http://www.marginalrevolution.com/marginalrevolution/2010/08/a-very-good-point-from-dan-drezner.html takes up this bit from Drezner’s review of John’s book (also quoted in John’s post below).

bq. Quiggin thinks he’s only writing about the failure of free-market ideas, but he’s actually describing the intellectual life cycle of most ideas in political economy. All intellectual movements start with trenchant ways of understanding the world. As these ideas gain currency, they are used to explain more and more disparate phenomena, until the explanation starts to lose its predictive power. As time passes, the original ideas become obscured by ideology, caricature and ad hoc efforts to explain away emerging anomalies. Finally, enough contradictions build up to crash the paradigm, although current adherents often continue to advance the ideas in zombielike form. Quiggin demonstrates with great clarity how this happened to the Chicago school of economics. How he can think it won’t happen with whatever neo-Keynesian model emerges is truly puzzling.

hmmm … Stable mode of production. Gradual accumulation of contradictions. Crisis. Emergence of new mode. I wonder “where we might have encountered these claims before …”:http://www.marxists.org/archive/marx/works/1867-c1/.

More seriously – I don’t buy Dan’s arguments here. As with most stage theories (not only Marx, but also Kuhn), the mechanisms of institutional reproduction and change in his account are sorely underspecified. ‘Contradictions accumulate’ isn’t a much more helpful empirical claim than ‘shit happens.’ To really understand what is happening, you need a proper theory of the underlying conditions for ideational retention and reproduction. _Why_ do some ideas decay into self-parody, while others do not? After all – not all ideas decay (or at least: not all ideas decay at the same rate). Some economic ideas have continued for centuries (the limited liability corporation), while others have disappeared completely, while others yet have disappeared and reappeared. We don’t know why – but if we want to make the kinds of claim that Dan is making, we _need_ to know why, or at the least, have some rough idea. Otherwise, what we have is at best a sometimes-observed empirical regularity melded to a smidgen of intuition, which is not enough (in my book at least) to dismiss a counter-claim (that one particular idea may have a longer shelf life than previous versions) out of hand. The only large scale effort to come up with a proper theory that I am aware of is the sociological literature on performativity, but this is distinctly more useful in explaining how ideas succeed than how they become ossified, and “lacks any account of the mechanisms producing variation”:http://orgtheory.wordpress.com/2010/08/17/performativity-of-markets-and-endogeneity/.

Shorter version: if you want to dismiss someone else’s argument on the basis of a theoretical claim about the life-cycle of ideas in political economy, it’s a good idea to have an _actual theory_ (with mechanisms and such) of the life-cycle of ideas in political economy. I’m not seeing that Dan has one here.

Update: see Dan’s “response here”:http://drezner.foreignpolicy.com/posts/2010/08/26/the_ideational_life_cycle_in_political_economy, with a set of postulates about what may explain ideational persistence. As he notes, this is not a theory – but in fairness, political science and international relations in particular has done a terrible job in providing such theories to date (some interesting work on norm diffusion, which is not quite the same thing, aside).

A Keynesian zombie idea

by John Quiggin on August 26, 2010

I’ve spent a lot of time double-tapping[1] the zombie ideas of market liberalism. But the comments on my recent rejoinder to Dan Drezner remind me that there are some zombie ideas on the Keynesian side of the fence as well. Perhaps the most important is the claim that the breakdown of the Keynesian system of demand management was the result of an exogenous event – the oil price shock of October 1973, which arose out of the embargo imposed by OPEC during the 4th Arab-Israeli war.

There’s a tiny element of truth in this – after the oil shock, the collapse was rapid and disorderly. But the Keynesian economic order had already broken down by October 1973, and the oil shock was a consequence of that breakdown, not a cause.

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