Through a Glass Darkly, or Not?

There seems to be much truth to the idea that we construct our realities around our perceptions of what is, what has been, and what might be. Nowhere does this seem more true than among social scientists, and perhaps nowhere more true than among economists. The New School's History of Economic Thought website identifies 67 different subdisciplines aggregated into eight main categories: "Pre-Classical" and Classical Schools of Political Economy, Anglo-American and Continental Neoclassical Schools, Heterodox and Keynesian Alternative Schools, and Themes and Other Thematic Schools.

Masters and disciples from the various schools don't agree on all that much, yet the popular press pays scant attention to the theological ("ideological" is the more politically correct term) and methodological underpinnings of it all. Instead they pit one individual economist against another in terms or cheerleading or nay saying whatever is the so-called "economic news" of the day, and leave it at that. If any here want to better understand the interrelationship between and among the "schools" in a anecdotal, historical word picture I recommend Goncalo L. Fonseca's The Walrasaid which concludes:

So your tired storyteller must end this saga with a word of caution. Perhaps at this point we should lay down our aspirations for a grand system and allow each of the battalions to roam independently for a while, proceeding on their own, examining each other in passing, learning from each other, each taking what is useful to their particular research program and leaving behind what is not. In time, if the gods are kind, there might be some convergence on some principles and possibly even a few conclusions, so that thereupon the discipline may be a bit more honest and maybe even helpful to humanity at large. But if there is not such a convergence, let us not take arms and violently charge each other in the name of ideological purity - for then we might slaughter and bury much of what is insightful and useful. Let us then listen, reflect critically, and proceed with caution.

Nonetheless, we need not rashly dismiss the dream outright. It is not unthinkable that a new conceptual revolution with the ferocity and thoroughness of the 1871 one could yet happen...and perhaps even sooner than we might expect.

To the initiated it should come as no surprise that a heterodox economist like me – at once a student of John Kenneth Galbraith, the Austrians, and the Game Theorists, of Hyman Minsky and John Keynes, and also of those labeled Post-Keynesians, as well as the small group who call themselves Ecological Economists – might mentally construct a picture of the world as dark as the one seen on the pages of this blog.

It proves easy, following the works of these masters to see that long cycles of good times lead to selfishness, political and business corruption, attendant deregulation, and fantasies that unfettered market mechanisms will bring about the financial and other salvation of the world. It proves easy to see the good times followed in long-wave cycles by times the both "try men's souls" and bleed the pocketbooks of middle and lower class people. It proves easy to see these times followed by gradual build up of confidence that itself gradually builds into over-confidence, then over-expansion of credit to set the stage for the next big problem.

What I'm wondering is how others see the world through much more rose-colored glasses. How it is that they see nothing but clear sailing ahead for as far as one can imagine? Most recently I ran across Stephen Skirchner's Institutional Economics blog.

Skirchner seems well-educated, a good writer, and glowingly optimistic. Yet within the span of a few posts, beginning with his January 24th "The Doomsday Cult Comes to Reno," Skirchner says "Warren Buffet is sounding more and more ridiculous," "Stephen Roach is having trouble getting his colleagues and clients to take him seriously," "PIMCO’s Bill Gross [is] keeping the doomsday cult alive," and "The Economist has a tired and predictable piece on Greenspan’s legacy." All of this, and likely more on his blog pretty much contradicts all of what I post here.

So what gives? How is it that Skirchner can be so optimistic and me so pessimistic? Does he see more than I? Less? Do we both see pretty much the same stuff, yet draw radically different conclusions as to what is and what might come? I dont' know.

Maybe Skirchner and others can help me to see the world differently, or at least to better understand how those I call "Cornucopians" can be so glowingly optimistic.

Comments

[Lord]

Does experience have something to do with it? I can recall all manner of crises that were the rage of the day that have since disappeared into the oblivion of time. Things have a way of working out, not necessarily painlessly or without effort, not necessarily for the best, but reasonably enough to be replaced by the next one. Memory tends to be selective, forgetting past tribulations and remembering the successes, and making us wonder why we were ever stirred up anyway.

[dave]

Yet stirred up we were, and necessarily so to help us remember, collectively, things lost--things like community, the joys of collective labors of love, and helping one another rather than trying to better ourselves by pushing others down....

It seems that the cycles of forgetting and remembering must be repeated both individually and collectively, in the latter case across generations to keep moving forward albeit through fits and starts...