Tragedy of the technocrats

The good guys will always lose if they don’t have the courage to be the good guys.

Brad DeLong writes

Why Are the Technocrats of the Center Missing in Action? Robert Rubin disappoints… And it is not just Rubin: all the bipartisan technocrats of the center appear to be wringing their hands and calling for a plan without saying what it should be.

DeLong tries to remedy this with a list of specific proposals. As advertised, they constitute a “platform for the bipartisan technocrats of the center”. In a seven point memorandum, the vexing issues of the day are simply fixed. The arithmetic is made to work. “[T]he best policy to provide American businesses with the incentives they need” is declared. No matters of controversy are noted. Why then, as Felix Salmon points out, does it have “exactly zero probability of ever being enacted”?

Paul Krugman laments that we have been “mugged by the moralizers” and admonishes us that “economics is not a morality play“.

But the thing is, human affairs are a morality play, and economics, if it is to be useful at all, must be an account of human affairs. I have my share of disagreements with both Krugman and DeLong, but on balance I view them as smart, well-meaning people who would do more good than harm if they had greater influence over policy. But they won’t, and they can’t, and they shouldn’t, if they exempt themselves from the moral fray. One of the stereotyped insults economists throw at one another is that a piece of analysis is “partial equilibrium”. The phrase is shorthand for coming to a conclusion based on assumptions that could not survive the circumstances under which the conclusion would obtain. I don’t want to single out Krugman and DeLong, but technocratic economists in general engage in partial equilibrium social science when they ignore moral concerns and the constraints “legitimacy” places on feasible policy.

It should be no surprise that human collectives choose policies destructive of GDP or employment growth when they deem those policies to be wrong or unjust. Individual human beings act against their material interests all the time, providing full employment for economists who endlessly study the “ultimatum game“. Political choice combines diffuse personal costs with powerful moral signifiers. We should expect politics, including the politics that determines economic policy, to be dripping with moralism. And sure enough, it is! This doesn’t mean that policy outcomes are actually moral. (There’s a hypothesis we can falsify quickly.) But exhortations to policy that cannot survive in terms of moral framing are nullities. They are no less absurd than proposals to “whip inflation” by demanding increased production while simultaneously imposing price ceilings.

My inner DeLong objects at this point. After all, we have had a technocratic central bank, apparently independent of politics at least since the early 1980s. The market itself is a famously amoral creature, yet the outcomes it imposes have become widely regarded as legitimate. That’s all true! But it is a mistake to interpret those facts as evidence for the unconditional feasibility of technocratic management, or of unfettered markets. Our deference both to market outcomes and central bank management did not derive from some overwhelming scientific consensus to which the common man wisely deferred. They were the result of an immensely successful ideological campaign that conflated markets with liberty and democracy, and claimed central banks would deliver fair outcomes by virtue of predictably valued money. There is a reason why people are asking What Would Milton Friedman Do? in the same way a Christian might ask what Jesus would do. The technocratic interlude for which Brad DeLong yearns was built upon scripture that Milton Friedman both penned and evangelized.

We are in a period of Reformation now, with all the turmoil that suggests, and the outcome is not predetermined. Simply assuming the parishioners will remain faithful, or lamenting that they ought to remain faithful, is no way to win the argument. There is something poignant, but also a little blind, in the fact that DeLong’s agitation was aroused by Robert Rubin, who, when elevated to speak ex cathedra from the pages of the Financial Times, had nothing worthwhile to say. To DeLong, Robert Rubin remains a pontiff of the “bipartisan technocrats”. To the rest of us, Rubin has become an icon of self-delusion, corruption, and arrogance. Rubin was arguably the most influential member of a technocracy whose conduct now seems deeply unwise. He accepted handsome compensation to cheerlead risktaking at a bank that then held taxpayers for ransom when those risks went sour. Despite all this, he retains his wealth and influence, and has never much apologized. Heretics of all stripes chafe that his protégés are overepresented in the halls of power. Rubin is undoubtedly a compelling figure in person. People who have worked with him are bedazzled; they enthuse about his brilliance and public-spiritedness. The rest of us never met him. We just saw the smartest guy in the room walk away, rich and smug, and then the room exploded.

Krugman is the oddest technocrat, because he is also one of America’s great moralists. On so many subjects, his voice booms like thunder from astride the New York Times. When Krugman is at his best, and he is often at his best, no one mixes authority, moral outrage, and smart argument as effectively. But on the core economic questions of the moment — fiscal and monetary policy, national investment policy, employment — Krugman explicitly cedes recognizable morality to the other side, and in doing so, he cedes the argument. To be fair, moralizing Krugman’s positions might not be easy. Krugman’s views are inconsistent with some common moral frames. It is easy, in the context of prevailing norms, to argue that governments should be prudent in the same way as households, or that debtors have a sacred duty to repay creditors, or that good times must be paid for with bad. The most obvious moral counterplays, appeals to altruism in the face of misery, are vulnerable to vilification of the “undeserving poor” — people whose lack of diligence left them without “skills”, deadbeats who partied on debt they cannot now repay. These accusations are often inaccurate, hypocritical. and self-serving. But they are effective. The landscape of morality plays is challenging for someone with Krugman’s views.

But even in a challenging landscape it is better to fight than to preemptively surrender. There are ways to address, in explicitly moralistic terms, the arguments of the other side. It is not so effective to claim, for reasons described as “wonky”, that what’s bad is good in a liquidity trap and economics is not a morality play and in a better world policy would be driven by the models that one very smart economist prefers. Rather than eschewing moralism, Krugman could turn the table on “debt moralizers” and talk about the responsibilities of creditors, the evils of bad lending. In our personal lives, we understand that making loans to friends and family can be dangerous, that lenders and borrowers have a joint responsibility to ensure the money will be put to good use. We know that incautious lending to relatives can destroy families, and is best not done at all if the lender can’t afford to forgive the loan. Ethical lending always involves paternalism on the part of the lender, although self-interest often enforces paternalism even where ethics will not. Further, ethical lending for yield always involves risk-sharing: lenders must understand if the enterprise to which they lend fails badly, costs will be borne by both borrower and lender. Ordinary people get this stuff. A family member who continually lends money to the cousin everyone knows is alcoholic will not be considered virtuous. If the same family member suddenly demands repayment, provoking shouting matches at holiday dinners and making himself out a martyr for having lent so generously, the rest of the family is unlikely to be sympathetic. If he had lent to the alcoholic for interest and then caused such a scandal, he would probably be no longer welcome at holiday meals.

Accounts of destructive, reckless creditors may not fit a bumper sticker as easily as “deadbeat borrower”. But they are true, compelling, and moral. And they will not tell themselves. My point is not to criticize DeLong or Krugman, both of whom I admire. But the lament of the technocrats is self-defeating, counterproductive, and ultimately poor social science. Policy ideas that cannot survive in equilibrium with achievable social mores are useless. This needn’t rule out good policy. But it does mean that a good policy economist will be a political economist, and a moral economist. Ex post, the “good” in good policy will be a double entendre. Policy will be both effective and right. Ex ante, both policy and morality are contested and undetermined. The policymaker’s challenge is to negotiate a space where morality and policy are mutually reinforcing, and where the results of that coherence are in fact good.

Afterthought: The technocracy is suddenly up in arms over World Bank President Robert Zoellick’s suggestion that a new monetary system might involve some role for gold. Gold is a great heresy in the church of the technocrat. Zoellick’s remarks were mild and unspecific, and it amuses me the degree to which they have aroused the now embattled mainstream. For the record, though I have profited from gold’s rise, I do not think a gold standard is a good idea. But I also think that remetallization of money is much more likely than many economists, who brim with accounts of transition costs and unworkabilities, believe. The case for gold as money is fundamentally moral. The moral foundation of the old technocracy — that monetary and financial dynamics would be managed, but in a manner both stable and fair — has been discredited. Gold may have its flaws as a putative currency. But at least it doesn’t conspire to steal pennies from paupers in order to pay off well-situated cronies. As existing monetary authorities most certainly have done, on multiple occasions.


49 Responses to “Tragedy of the technocrats”

  1. [...] Tragedy of the technocrats Steve Waldman [...]

  2. charles writes:

    It is interesting to note that Keynes used to compare economists to medical doctors, who would prescribe remedies to economic “diseases”. The problem of MDs cloistered in their ivory tower without empathy for their patients seems quite similar to the predicament you describe with economic technocrats.

  3. XXX writes:

    OKay, so you’re “long precious metals” and you think that Robert Rubin is some kind of semi-respectable technocrat? Yes, I know you were quoting Brad De Long on Rubin, but you didn’t point out the obvious about Mr. Rubin: that he’s an idiot and put in place policies that caused the crash of 2008: repeal of Glass-Stegal, failure to regulate derivatives and Commodity Futures Modernization Act of 2004, if I have the name right. So, what are your views on Rubin?
    And people are buying gold because they’re thinking that there’s going to be hyper-inflation??? Of course, that’s completely mistaken, these fears about hyper-inflation. So why are you long gold?

  4. XXX writes:

    Alright, I read a little more carefully and I see that we agree about Rubin.

  5. MrM writes:

    Good points, Steve. The underlying drive of the original Luddites movement was a deep sense of unfairness and injustice brought about by the Industrial Revolution. If only they all had read Adam Smith, whose arguments are so convincing …

  6. Ken Rhodes writes:

    “And people are buying gold because they’re thinking that there’s going to be hyper-inflation??? Of course, that’s completely mistaken, these fears about hyper-inflation. So why are you long gold?”

    Probably because, irrespective of underlying reasons, gold seems to be going up. And short-term ownership of an asset is frequently done for the expectation that it will go up, rather than for the reasons it will go up.

  7. dave writes:

    “A family member who continually lends money to the cousin everyone knows is alcoholic will not be considered virtuous.”

    Herein lies the problem with every economist that exhorts people that we need to “get credit moving” again. Most people hear this and think you want to lend more money to the alcoholic. Why? Because that is precisely how current policies are designed. New credit is mainly lent to the least deserving. The banks got their bailouts. Low self control individuals can still buy with no money down and no payments for two years. There is an impression that no fundamental change has occurred in the way our economy is structured and that the increase in the supply of credit is merely meant to paper over grave injustices in how our society is structured.

    People don’t know the details of policy, but they instinctively know that there were much better policy options to weather this storm. They know there were better ways to recapitalize banks. They know its better to craft policies to raise wages rather then make it easier to buy on credit. I’m sure we can all name half a dozen simple and effective policy solutions that would have been fairer and more efficient then what we got from our political system. The farther we get away from the crisis the less effective excuses about urgency and panic are at explaining the political failures of our countries elite, who put their own interests front and center in crafting policy solutions.

    Perhaps people should just accept the clearly lacking and injustice policy options being offered to them for the sake of “systematic stability”. Maybe. Perhaps if we all accepted a new round of funny money AD would increase a bit and the employment rate would come down a bit. However, people don’t want to accept this is the best we can do, because it isn’t. You talked about the ultimatum game earlier, well the American public is saying we’d rather go down with the ship then continue along with the glaring injustices of our society.

  8. vlade writes:

    The “problem” with morality is that it is an absolute. We don’t like absolutes in this time and age – usually we point out that for each time the absolute is right, there is a time when it’s wrong – if for nothing else, because these absolutes are artificial constructs (see your Karmic post), by imperfect organisms.
    Yet, as problematic these absolutes are, they give one a perception of solid background, a helping hand and a steady platform in the fight with an uncaring universe.

    To your more specific point (debt deadbeats), I tried to explain this some time ago to a bunch of people. If you lend money to a known drug addict, you’d blame yourself rather than him. I failed miserably.
    I actually suspect that the saving-is-good, spending-is-bad (and thus lenders are responsible, borrowers are not, borrower is alwys to blame)IS part of our morality albeit indirectly.

    IIRC most religious texts look at saving as a good thing (but, at the same time lending is bad, so they seem to think of them as two different actions). You rarely see spenders morally enraged that the immoral savers aren’t willing to lend them anything to spend.
    It sort of makes sense – it’s not so long ago that saving one’s production was an important survival trait for very large part of population.

  9. john writes:

    For a free market to be meaningfully free, free individuals must be at liberty to spend into it. For free individuals to express their interests in a market they must first have money. For them to have money they must be employed.

    To raise the stability of money, an important point no doubt, above the free agency of individuals in the market by insisting that money value stability is more important than the rights that are stripped from free individuals by the withdrawal of income is to enslave people not just to money, but to a fetish for fixed value that exists no where else in the world. This is the central problem of the Monetarist mythology and the gold standard only entrenches it.

    To hyperventilate about the irresponsibility with which elected politicians have handled money for the last forty years is to really miss the big picture of more people with longer life expectancies throughout the free world. In China more people with longer lives are even being raised from poverty by an erstwhile communist state on the shoulders of fiat currency. If you want morality tales look at what the monetarist fetishes are doing to the Euro zones star pupils in Spain and Ireland: these nations conformed fully to the unctuous orthodoxy of the Friedmanites and have been thrown to the lions by their avatars.

  10. Phil Koop writes:

    Well, let’s see; Krugman’s blog is called “Conscience of a Liberal”, and yours is called “Interfluidity.” So which of you is the amoral technocrat again?

    As you yourself have noted, a sense of moral outrage infuses most of Krugman’s posts; the comments he draws demonstrate that both his critics an supporters sense this. The problem is not that Krugman’s opponents do not perceive his arguments in moral terms, but that they assign different priorities to different aspects of morality. If you say “one should not lend money to an alcoholic”, you have lost the argument before you started, because that is not how Krugman’s opponents frame the debate. They perceive it in these terms: “that idiot uncle Bob lent money to alcoholic cousin Charlie. Meanwhile, I’ve been minding my own business. Why should I have to pay to help George and Charlie?” You cannot demonstrate the fallacy of this thinking without using facts and logic.

    Delong, despite his penchant for hyperbolic rhetoric (“stupidest man in the world”) is more vulnerable to your criticism. Again, that comes through in the very title of his blog.

  11. Lewis writes:

    This is great!
    Do another post on plausible morality-based arguments for QE and fiscal stimulus. Just imagine some.

  12. moebius writes:

    I just posted what follows over at Naked Capitalism. I find the following point of view disturbing with dire implications. But it seems to me to give great insights into what is going on. I find the commentary at interfluidity quite insightful and would appreciate other perspectives.

    I just read Taibbi’s Griftopia and he entertainingly refers to Goldman Sachs as a Vampire Squid. Yves and others refer to our financial class a banksters. These are interesting metaphors with good emotional resonance but they don’t seem to me to be informative enough.

    When I look at the at how much of our financial system currently operates I see nominally independent mobile and self centered actors roaming the landscape looking for and finding opportunities to perform extractions. Our legal system can barely even recognize their extractive activities and can apply no significant restraints.

    Only one word needs to be changed in the above description, legal -> immune, to provide a nearly exact description of a late stage highly aggressive cancer that is dropping metastic lesions all over the body.

    When viewed this way David Stern’s foreclosure operation in Florida, the parking meters in Chicago, and Jefferson Counties derivatives problems are just mets that haven’t achieved full invisibility. I suspect in each of the above cases the financial actors extracted more than 100 million dollars.

    We can see how the cancer’s ability to increase its extractions and evade the legal system has evolved over time. In the late 80’s 1000 bankers went to jail in the wake of the S & L crisis. After the dot com bust 10’s of executives went to jail. After the 2008 crisis 1 financial actor has gone to jail (Madoff for his ancient fraud).

    The thing about cancer is once the tumor load gets to high death occurs. And once the immune system can no longer recognize or act against the cancer the only treatments available are radiation or chemotherapy which act by killing growth.

    All is not lost for Roosevelt dealt with a similar situation by rebooting the money supply in a form that removed the cancer of the 20’s oppportunities for growth and spread.

    Mobile, growing, and unregulated selfish actors opporating in a society is the definition of cancer

  13. Tom Hickey writes:

    Nice post. It needed to be said.

    Two points:

    1. There is a growing literature about economic theology. See, for example, Robert H. Nelson, Economics as Religion: From Samuelson to Chicago and Beyond (Penn State, 2001), and Duncan K. Foley, Adam’s Fallacy: A Guide to Economic Theology (Belknap, 2006). These authors observe that economics is inherently normative because it serves policy, and the major economists assume the role of the priesthood in theocratic eras.

    2. The principal morality play at present is based on the false analogy of government finance being like household and firm finance when the inverse is true under the present nonconvertible floating rate monetary regime that prevails in the US, UK, Japan, Canada, and Australia, but not in the EMU. Under the present system, the federal government as monopoly currency issuer is not revenue constrained, while households, firms and states/provinces are. Government finance is only similar to household and firm finance in a fixed rate system, in which government and nongovernment are both revenue constrained. As long as this false analogy is widespread, the moralizing about debt and spending, which is without operational basis, will continue to hamper society, politics and economics.

  14. Stefan writes:

    When things aren’t working, it’s because something is out of balance. So in order to fix things when they aren’t working, the key move is to inspect what is out of balance and then make adjustments to those things.

    In a whole system, like the world’s weather or the world’s economy, there is bound to be a hurricane or two swirling somewhere at any given time; that is an axiom of the geometry of turbulence.

    Nevertheless, together with the Zen priest who is dedicated to end world suffering, we ought to keep on “shoveling snow into the well.” We won’t end world suffering, but that doesn’t mean it’s not the right thing to do. Herein lies the moral of our tale.

  15. glory writes:

    speaking of moralizers (and reformation)

  16. David Pearson writes:

    Bernanke’s latest op-ed was an exercise in immorality. “Monetary works by jacking up stock prices.” This is trickle-down monetary policy. The myth endures that Americans own stock and so benefit from the wealth effect. Technically true, but false in degree: great numbers of people own stocks, but the rich own stocks in great numbers. The Fed is trying to put more money in the hands of people who are unlikely to spend it, at least in a way that benefits the economy. Meanwhile, most lower middle class people will barely notice the uptick in their in their 401k.

    In Latin America, during the 80′s and 90′s, the Central Bank would print money, the kleptocracy would spend it on shopping trips to Miami, and the poor would suffer from higher prices. Years and years of this decimated the middle class. I’m not saying this will happen here like it did there, but that it will happen, and has happened already, to some degree. I wonder why Paul Krugman doesn’t see it.

  17. AndrewBW writes:

    Regarding what Phil Koop says above, I think you misinterpret Krugman slightly. He’s never said that economics should be amoral, or that morality has nothing to do with economics. He said – per your quote – that economics isn’t a morality play. Here I assume he’s referring specifically to the old English morality or mystery plays such as “Everyman,” where the explicit purpose of the drama was to teach certain moral lessons about life. I think Krugman’s point is that economic policy shouldn’t be used as a cudgel to beat people into behaving a certain way. Especially when said people explicitly are not drunkards and drug addicts and such.

    I also agree with Phil when he says that DeLong is much more vulnerable to your charges.

    Excellent piece.

  18. [...] few technocrats of the center chime in, praising the plan, but calling it politically unviable, as if unaware that a large [...]

  19. [...] writes: There is something poignant, but also a little blind, in the fact that DeLong’s agitation was [...]

  20. Robert Bell writes:

    Any time someone suggests gold, I am always wondering whether or not a basket of commodities would be better … like the Chilean one (

  21. lemmy caution writes:

    There are plenty of morality-based arguments involved in promoting certain fiscal stimulus measures. High levels of unemployment cause a lot of suffering and alleviating that suffering is clearly a moral project favored by the left including Krugman.

  22. Philo writes:

    You write: “Ethical lending always involves paternalism on the part of the lender.” This is a misuse of the term ‘paternalism’, which applies to *coercion, the objective of which is the good of the coerced*. Making or declining to make a loan is not coercion.

    You might better have written: “Ethical lending (or declining to lend?) requires concern by the lender for the borrower’s well-being”; of course, this would also be true if we substituted any other interpersonal activity (or declining to participate in activity?) for *lending*.

  23. What is happening in the economy right now is the intersection between resource depletion and increased consumption. This is a cultural rather than an economic problem because our economies are also products of fashion. People don’t really look at things this way because they see how much power the world’s economies represent and compare this to the ‘triviality’ of fashion. By means of swapping present money for future returns economies engage labor and ‘rent’ time. Fashion appears incapable of doing so because it appears too ‘faddish’ and topical.

    What people don’t realize is that the economic actors are following cues that are the product of fashion. Economies behave a certain way because participants are stage- managed to behave within fashion dictates rather than within economic logic. Culture sez that the money- money swap has value. Nothing in nature or the ‘real world’ makes that suggestion.

    Call it the triumph of the fake over the real.

    The goods produced by modernity reflect the marketing requirements the culture makes on itself. Since fashion is false what modernity markets is its own false- ness. As such the primary narrative is [a] self- referential scam.

    For it to be otherwise would be undermining: it would imply something outside of fashion has value and put an end to the narrative. The scam consequently markets itself as ‘Ironic’, with irony set forth as a central virtue of modernity. The ‘modernity narrative’ paints itself as an imperfect work ‘in- progress’ whose defects will be cured when one more ‘advancement’ gives rise to another -then another, and another. This concept gives ‘growth’ moral supremacy.

    Because growth is a moral imperative it is difficult to address by way of economics or politics which are both marketing tools of culture. It is fashion, not economics. that demands growth.

  24. Opir writes:

    Very good post. A couple things, though.

    1) Goals-based technocracy does not preclude /framing/ arguments in moral terms. There really is
    no disconnect here. FDR and his advisers MIGHT have thought privately that what they were doing
    was the best policy without any emotion, but he had no problem framing everything in terms of
    morality. He was ready to “welcome their hate” and stand up for the Four Freedoms, all while
    put in place policies that did the job.

    2) What passes for “technocrats” in this context is laughable. What we have here seems more
    like “warmed-over, largely unemotional Neoliberals.” as opposed to “radical, let’s assassinate
    democratically elected leaders who privatize their pension systems to show fealty to Lord Friedman Neoliberals.”

    3) I think it should be the goal of any serious technocrat to consider the context that they
    are working in. That is NOT an excuse for the absolutely awful preemptive compromises, milquetoast half-measures, and incoherent “split the difference” bi-partisanship that we have had to deal
    with for decades. No, they should understand and consider the social and economic environment and,
    if it is not conducive to what they truly believe are the best policies, /then they work to
    change said environment/, rather than just “best is the enemy of good” us to death.

  25. [...] “… human affairs are a morality play, and economics, if it is to be useful at all, must be an account of human [...]

  26. [...] agrees with much of DeLong’s fiscal plan and recommends this Interfluidity post as [...]

  27. blue writes:

    This post and the hundreds like it that appear every day are pure clutter. It’s ex-post commentary on random events. There is no equilibrium. Get over it.

  28. winterspeak writes:

    SRW: I guess I’m less impressed by Krugman than you are (DeLong is not worth mentioning). First, his economics is weak as he labours under the same confusion about money, public “debt” and monetary theory as most other economists. Second, his morality is plain enough and immoral — he think Government spending should be recycled into Democratic campaign contributions as quickly as possible. Will to Power is a lot of things, but “moral” is not negative.

    Exhibit A is his recent times column where he misdiagnosis the problem, and blatantly ignores the most simple solution because it won’t help his side win and make the other side lose:

    Your point on Rubin is right on. In person, he’s bright and charming. And by his actions he revealed himself to be just another bankster. Him and Summers cannot seem to not fail upwards.

  29. OGT writes:

    Great post. This part especially, “But the lament of the technocrats is self-defeating, counterproductive, and ultimately poor social science. Policy ideas that cannot survive in equilibrium with achievable social mores are useless.”

    Increasingly I have been feeling that quite a bit of what passes for good economics is really poor social science, for much these reasons. Yet all of the other social science disciplines seemingly lie prostate at the feet of economists supposed quantitative prowess. The best result for us, and perhaps economics itself, would be if one of the rival disciplines like history or political science, or (gasp) sociology could rise up to challenge economics current hegemony in the public intellectual sphere. A little competition is good for everyone, even the economists.

  30. Bogwood writes:

    A favorite aphorism:try not to make stupid mistakes. A very stupid mistake is wasting precious assets mining gold. There is already enough for several centuries use. Someone has to hatch a scheme for valuing gold when no more is mined. Part of the gold/money problem.

  31. sglover writes:

    Steve from Virginia — really excellent. You’ve perfectly described why so much of academic economics is really a kind of collective, high prestige delusion.

  32. Wes writes:

    Good piece Robert. People who argue that economics is not a morality play are idiots.
    It is funny how self deluded they are.

  33. [...] commenters and Brad DeLong respond wonderfully to my previous piece. DeLong didn’t quite get what I was [...]

  34. [...] platform of deficit cuts for "bipartisan technocrats of the center". The post prompted a very interesting response from Steve Waldman, who addressed not the content of the proposals but Mr DeLong's style in [...]

  35. Nick Rowe writes:

    Very good thought-provoking post, Steve. It provoked this thought in me:

  36. [...] of deficit cuts for “bipartisan technocrats of the center”. The post prompted a very interesting response from Steve Waldman, who addressed not the content of the proposals but Mr DeLong’s style in [...]

  37. Wes, Those economics typically fell into the aptly-named realm of “Political-Economy”. Not all economics (nor even most) resides there, but that is where (to me) one finds the most fascinating corners.

  38. [...] heuristics, public policy, and self-defeating tribalism and Tragedy of the technocrats Steve Randy [...]

  39. [...] of the technocrats (Interfluidity) Steve Randy Waldman argues that progressives lose the economic debate because they refuse to frame [...]

  40. Alan Wynnewood writes:

    It is remarkable that Krugman criticizes the ‘moralizers.’ I thought his over-riding thesis was that we should alter arrangements until income-inequality is reduced. He also advocates the creation of jobs even if they decrease the efficiency of the economy. That isn’t moralizing? Excellent analysis in your piece. All macroeconomics is moralizing. All that varies is one’s conception of which morality should count in decision-making.

  41. Greg writes:

    I agree Steve

    The republicans have been focused on winning hearts THEN minds while the democrats try and appeal to the head first. Unfortunately that doesnt work with most people especially on issues like money. Jonathan Haidt did a great study and posted it on “Edge”. He examined “Why people vote republican” and determined it had to do with the appeals conservative politicians make to peoples emotions. They treat politics like a religion and democrats treat it like debate team. Well religion is something people get passionate about, debate team is just an intellectual exercise for the most part. The thing is, in my view, ALL the moral truths are against the conservatives for the most part. The movement is trying to rewrite the BIble for chrsissakes to make it LESS liberal. Their Holy book doesnt even agree with them!’s-conservative-bible-project/

    Why oh why cant we have better liberals?

  42. Greg writes:


    I missed your previous article Steve or I would have seen that likely you are aware of Jonathan Haidt and his work.


  43. [...] Economic policies ‘that cannot survive in equilibrium with achievable social mores are useless.’ From Waldman’s Interfluidity; [...]

  44. Michael Warhurst writes:

    Moral is when you know what it is and do it. Immoral is when you know what it is and don’t do it.Amoral is when you don’t take morality into consideration in the first place.
    There can be no better example of amoral than someone for whom dollars are the only, final, and/or deciding value before decision or action.
    Republican demagogues – like all of the FOX Republican media talking heads – are phonies who have not a single human or social moral value that would trump dollars in any circumstance.
    Government on the other hand, is created to respond to human and social values which cannot be measured in terms of dollars and has the ability to enforce moral action on wealthy elites and their corporate “fronts”; limiting their ability to extract wealth from workers.
    This is why Republicans – the voice of amorality and lackeys for the wealthy elites strangling the world economy and American workers – are wont to stalemate government, proscribe and eliminate governmental oversight of financial industry players, eliminate the possibility of social mores trumping greed, and ultimately destroy whatever vestige of democracy exists in America.
    This will not be an onerous task. America likes to think of itself as a democratic republic – which is a contradiction in terms.
    Plato invented the republic. He did so because Socrates was forced to commit suicide by Greek democrats due to his refusal to recant the statement “Not all positions in government should be elected because some require special skills which cannot be gotten through a general election.” Plato did an historic freak-out in anger against the Greek democrats for killing Socrates and invented a system of government which is the antithesis of democracy. Democracy is run by the majority of average voters, while a republic is run by “elites” which in modern context have become wealthy elites.
    It is clearly impossible to have a government run by wealthy elites and the majority of average voters, at the same time. It’s either one or the other and in America democratic government is hobbled and wealthy elites are in total control of the republic as per its design by Plato.
    If government is stalemated who wins? Workers or wealthy elites? Wealthy elites win when government power is eroded, stalemated or eliminated. Political power is degraded when it is divided and subdivided, and in America it is subdivided and hobbled.
    Amoral greed of wealthy elites can be limited and controlled by democratic government which is elected to promote and allow human and social values – social mores and individual morals – and which has the power to control the excesses of unfettered greed which is the hand-maiden of un or lightly regulated capitalism. Republicans and many other conservatives – offended at any limitation on greed – are hell bent on either destroying or totally stalemating the only power source capable of forcing morality on them, government.
    To the amoral there is not a single thing that government should do except shell out whenever capitalism self destructs and needs to fleece ordinary taxpayers like they are sheep.

  45. Longtooth writes:

    The problem with the entire theme is that of defining who’s morality counts — if your and my moral assignments agree, then they’re moral… if they disagree, one of them is considered im-moral by the other.

    Of course economics has moral implications and effects… but who’s morals count is the real question and issue here, and the issue that the discussion ignores entirely. Before any marcoeconomic issues are confounded with moral ones the question of who’s or what basis for the moral foundations are going to be considered final and agreed.

    Good luck with that.

  46. Greg writes:


    You point to the great moral debate and we are as a society on the verge of having it, in fact we are in the midst of it really. There are two primary sources of morality; one side says morals are outside of us prescribed by an all knowing moral judge and his prescriptions are available in inspired written form. Another side says morals are discoverable and discovered and that humans come to moral conclusions via reason. These morals involve improving human satisfaction and assume that there is in fact a workable common definition of human satisfaction.

    Sam Harris has just written an important book on this subject “The Moral Landscape”

  47. [...] post from Steve Waldman’s economics blog, Interfluidity, interests me in the way that it links economic theory and policy with morality and [...]

  48. Faux technocracy…

    A response to the excellent post over at Interfluidity (a copy of comment there, archived here): 1) Goals-based technocracy does not preclude /framing/ arguments in moral terms. There really is no disconnect here. FDR and his advisers MIGHT have though…

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