04 June 2009
Reviewing Reviewers--Posner
)Published on June 4th, 2009 @ 03:58:23 pm, using 801 words, 115 views
There are several lessons it took me a long time to learn. One was that very much of the necessary harm and evil in the world comes not from the mean people but from those whose outer demeanor is nice. Another was that those who test and verbalize well may score high on measures of “smart” (that people like them tend to create) but you’d do well to ignore them and run in the other direction as fast as you can. (As one who tested and verbalized well, I can testify to batting average of being right.) Tied to this second lesson was the realization that some academic disciplines, like law and econ, load up on people from the second lesson (the people who combine one and two are especially dangerous) who then want to imperialize every other discipline. The worst of these folks are the ones who combine law and econ, never understanding that both, founded on the notion of rational people (who tend to be judged those who test and verbalize well for some reason), are set on very loose sand. The guy credited with linking law and econ in one area the most is Richard Posner, who somehow always manages to find in law and econ exactly the principles to justify what he already believed. Because both fields unduly deify the high testers and verbalizers, Posner is held high in both disciplines, proving the point about their collective wisdom.
So it is rare that Posner ever gets taken down in print, but this review of his recent analysis [sic] of the current econ crisis (it was . . . wait for it . . . government errors that caused the market to explode, not his rational men running the banks and brokerages, can you beeeelieeeeve it???) does as good a job as you’re going to find (and, to be fair, written by a noted but not nearly as influential an economist himself). And just for fun, it takes down yet another idiot New York Times book reviewer who got the book to review despite the reviewer’s own history of publications saying exactly the same bilge that Posner once more tries to pass. Here’s the start of the long review:
Richard Posner, leader of the Chicago School of Economics and Fourth Circuit Court of Appeals judge, uses his new book, “A Failure of Capitalism,” to try to rescue the Chicago School’s foundational assumption that the economy behaves as if all economic agents and actors are rational, far-sighted calculators. In some sense, Posner must try. For without this underlying assumption, the clock strikes midnight, the stately brougham of Chicago economic theory turns into a pumpkin, and the analytical horses that have pulled it so far over the past half- century turn back into little white mice.
Thus he writes: “At no stage need irrationality” on the part of markets or their participants “be posited to explain” the collapse of financial markets last year and the current deep recession.
Posner’s effort looks to me like an earlier effort to “save the appearances” in the face of discomfiting contradiction. The Jesuit astronomers of 17th-century Rome wanted above all to maintain the assumption that the sun revolved around the earth—for if it did not then the Bible’s declaration that Joshua called on God to make the sun stand still in the sky was a lie, and a Bible that lies even once cannot be the inerrant foundation of faith.
Thus the Jesuits created much more complicated models than the elegant heresy of Copernicus, in which the earth revolved around the sun. They succeeded in their attempt to save the appearances. Posner’s attempt does not: It is definitely a retrograde motion, for we see many things in the financial crisis and the recession that are not what we would see in an economy populated by smoothly rational utilitarian calculators.
Exactly. We’ve made the point here before with regard to the recent spate of books trying to claim that econ as a profession is really taking seriously the shifts in knowledge about how humans actually operate, books that, like Posner’s, are just current examples of the mental [sic] gymnastics that Thomas Kuhn told us come before major paradigm shifts. The odd thing is that Posner and the others, with their silly intellectual [sic] routines, are actually good signs that the shift may be nearer than further and take us away from the stunted deformations of what Adam Smith really said that have poisoned and warped our ability to think and act socially and politically for decades now. Should the wall be crumbling, maybe we’ll come to look on this review as the shot that finally put the hole in the dyke. You’ll want to read the whole thing to make sure you took part in it.
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