What's Right in the Ec Department?
AS THE RESULT of an intensive public relations campaign, an unfortunate myth persists at Harvard that the Economics Department is too conservative. The myth originated as an essential part of the drive to ramrod more Marxists into tenured faculty positions. But far from being too conservative, the Economics Department is too leftist liberal. A brief survey of the spectrum of economic thought should make this clear.
THE ECONOMICS profession can be divided into four broad schools of thought. One major school advocates a mixed economy, welfare state, with heavy doses of central planning. Its members have been the major supporters of the tremendous growth of government programs, regulations, and subsidies in the last 50 years and they are the source and support for many more proposals along these same lines. This school opposes "conservative" free market capitalism and seeks to place severe restrictions on most markets.
Virtually all Harvard economics professors fall within this school. In fact, Harvard has a nationwide reputation for being the leading university in the school of thought advocating this position. Decades of endless apologia for ever increasing state intervention and control of the economy has earned the department this well-deserved reputation. This entire position can be referred to as the Harvard welfare state liberal school.
To the right of this position is the University of Chicago conservative school, named after its home base. The most famous Chicagoan is Milton Friedman. This school believes free markets are usually more effective than central planning and government intervention and opposes most of the welfare state measures supported by Harvard liberals.
The Chicago conservatives generally oppose, for example, price controls, land use controls, rent controls, regulatory controls, and most income redistribution schemes. Chicagoans also oppose socialism while the Harvard liberals take a friendly if not enthusiastic view toward it. This school's adherents also tend to be monetarists, while Harvard liberals are Keynesians.
To the right of the Chicago school are the truly consistent advocates of free market capitalism-the radical libertarian Austrian school. The Austrians represent an approach to economics fundamentally different from the previous two schools. The major differences between the Chicago conservatives and Harvard liberals are partly theoretical, but mainly empirical and philosophical. The Austrians, however, challenge the basic methodologies of both these schools and disagree with their major theoretical models.
For example, the Austrians reject the notorious theory of perfect competition as inapplicable and irrelevant to the real world and have developed alternative theories of competition. They also reject the Keynesian macroeconomic models as incapable of sufficiently describing real world events, and instead offer, radically different explanations of business cycles and depressions.
The leading advocates of the Austrian school are Murray Rothbard and Nobel-laureate Frederiech Hayek. They, along with their colleagues, see little if any role for the government in the economy; they oppose welfare state programs and regulations even more consistently than the Chicago conservatives.
To the left of the Harvard liberals are, of course, the Marxists. Like the Austrians, the Marxists also take a fundamentally different approach to economics than the Chicago and Harvard-based schools of thought. But whether the Marxian approach is an advance or a regression is open to serious debate.
The theoretical models of both the Chicago and Harvard schools are based on neoclassical economics. This approach is the result of the neoclassical revolution which occurred in the 1870s and introduced many new, basic concepts radically changing economics.
The Austrians claim to have applied the new ideas of the neoclassical revolution even more rigorously to every area of economic thought, resulting in a very different approach from the other two schools.
But unlike these three schools, the Marxists are pre-neoclassical. They seek to resurrect many of the pre-enoclassical concepts in use when Marx wrote, such as the labor theory of value, and they reject the new concepts and methods introduced by the neoclassicists. This is the source of their fundamental differences from the other, neoclassical schools. The Marxists, therefore, are not the latest thing in economic thought today, as they are always trying to present themselves, but the oldest.
economics are not merely the Marxists vs. the conservatives, as the ambitious Marxists always try to paint it. Using the word conservative in this way incorrectly jumbles together different major schools of thought, some of which are in no way conservative.
WITH the entire economic spectrum in view, one notes that not a single Austrian libertarian is a member of the tenured faculty in the Harvard Economics department despite the Austrians' basic scholarly challenge. There are really no tenured Chicago conservatives either, unless one seriously stretches the definition. Even then there are no more than two or three. Arrayed against this meager representation are 26 Harvard liberals and one Marxist.
This situation clearly does not represent the full spectrum of economic thought adequately, and the conservative capitalist side underrepresented. With a faculty like this, the department that affectionately harbored Galbraith and Leontief for years could hardly be called conservative.
This decidedly left stance of the Economics Department does much to impair the quality of education here.
One example of this is the well-attended debate held last spring between the Marxists and the neoclassical "capitalists" on the causes of the contemporary problems of inflation and recession. The debate was billed as a battle over the fundamental difference in economic thought: the Marxists vs. the conservatives. Nowhere was it mentioned that half the economic spectrum wasn't even represented. Duesenberry-Eckstein debating Marglin-MacEwan on the alleged shortcomings of capitalism is like Milton Friedman and Bill Buckley debating the Rev. Billy Graham and Brother John Birch on the alleged shortcomings of socialism. Unfortunately such stacked debates are all Harvard can offer with a stacked economics faculty.
None of this is to argue that more Marxists shouldn't be hired. The department as presently constituted is clearly too narrow. Besides, nothing will reveal the vacuity of the ill-conceived Marxist doctrine more than a complete airing in an environment where all views are represented.
But before any more Marxists are hired, the department should balance its already too left-liberal position with some representation of the other major schools of thought. The unjustifiable gap on the faculty between the overwhelming numbers of welfare-state liberals and barely existent Chicago conservatives should be reduced by the hiring of several legitimate Chicagoans. Furthermore, some Austrian Libertarians should be hired so students will have an opportunity to hear all points of view. Hiring more Marxists without these moves will only make an existing imbalance even worse.