The end of the worldly philosophy - interview with Robert Heilbroner - Interview

Interview with Robert Heilbroner

The noted author deplores the lack of a broader vision in economics today.

Q You have raised a disturbing question in the new edition of your book The Worldly Philosophers. The title of the last chapter is "The End of the Worldly Philosophy?" What do you mean by that?

A. I wanted to alert the reader at the beginning of this edition that it has a more disconcerting ending than previous ones. I do so in a new preface, but then do not say much more about it. I simply advise the reader not to look ahead. It would be like turning to the end of a mystery story to see who committed the murder. Then when we come to this last chapter, it is called "The End of the Worldly Philosophy?" And I point out that the word "end" has two meanings. One is termination and one is purpose. So, there is a double meaning or suggestion here. Is this the termination of the worldly philosophy? Or are we asking what the purpose of the worldly philosophy really is?

Q. You came up with the term "worldly philosophy" in the first edition of your book, now nearly fifty years ago. What do you mean by worldly philosophy?

A. It was partly the child of necessity. I wanted a word other than economics. At the time, as I often say in the book, I thought that the word "economic" was death at the box office. I thought the word "philosophy" was more appropriate. But what kind of philosophy? Material philosophy? Then I had lunch with Lewis Lapham, editor of Harper's, and he said, "You mean worldly." I said, "I'll buy lunch," because it was a wonderful word. And it is still a wonderful word. By worldly philosophy I mean the vision of the problem to which a rather technical apparatus we call economics has long been directed. In other words, what is meant by the worldly philosophy is what Adam Smith saw, what Schumpeter saw. Not the division of labor as such. Not the various technical pieces of the gross domestic product. For example, very early in Adam Smith's Wealth of Nations, he tells us what his vision is. The question he wants to answer is, how can a society of "perfect liberty" hang together once it has left the period of history in which its boss at the top, called a king, looks over things and autocratically allocates goods and territory and status. Suddenly in this world of perfect liberty, it is every person for himself, more or less. How can all this hang together? That is not the only theme of the book, but it is the central theme. He shows that the market system has an internal discipline. He does not go into issues such as equilibrium, where prices determine the balance between supply and demand. He does not go into all sorts of things that we know about these days. Later on, other themes come to the surface. But Smith focuses on a central theme in the market. The market encourages a new way of producing things through the division of labor. He talks at great length about how this affects pin manufacturing. Incidentally, he never points out the possibility that the division of labor can be applied in a store or in the factory next door where they make wool fabric. Smith has no concept of how the economy grows. When he talks about growth, he means the growth of cities. You would think that Adam Smith was the father of this concept, but he is not. He is the father of this interesting concept about productivity with pin production. He also says of the factory discipline to which the individual is subjected that, in his words, it makes a man as ignorant and stupid as it is possible for a human being to become. So the worldly philosophy to him is not only a technical improvement; it also involves a moral deterioration. That is precisely what separates worldly philosophy from economics.

I know a lot of economists who have written about productivity effects. But they do not write about moral effects or about how the mind might be dulled. The worldly philosophy means that, in the early days when the greats were expounding on it for the first time, they did not hesitate to point out that these "economic" changes had moral, political, sociological repercussions. In other words, the worldly philosophy was very much a mixture of sociology, psychology, and political consequences as well as the production and distribution consequences that we now call economic.

Q How has that changed in recent years or recent decades?

A. There is an increasing reluctance to go from a technical discussion of production and distribution to a discussion of the political and social side effects of these matters. We never use the word "capitalism" these days. It is apparently not scientific enough. The Harvard economist Greg Mankiw is the author of a popular, well-written textbook, and he is a very bright guy. He talks about the need to use scientific language, but he never uses the word "capitalism."

Q. Let's clarify this. Greg Mankiw says in his textbook that economics is very much like a science, that economists must pursue the scientific method and scientific analysis.

A. I guess the scientific approach began to penetrate and soon dominate the profession in the past twenty to thirty years. This came about in part because of the "invention" of mathematical analysis of various kinds and, indeed, considerable improvements in it. This is the age in which we have not only more data but more sophisticated use of data. So there is a strong feeling that this is a data-laden science and a data-laden undertaking, which, by virtue of the sheer numerics, the sheer equations, and the sheer look of a journal page, bears a certain resemblance to science. You will find few of the curves and the equations that are characteristic of economic writing in writings of political science or sociology. Those undertakings, which I consider to be of great importance in establishing the tone, the character of the economy; are not generally regarded as scientific. Now, that is another reason. Economics, what we call economic activity - buying and selling is a central one - is the only activity I know of in this society in which a given stimulus separates the population into two halves, one half moving to the right, one half moving to the left. When prices go up, buyers buy less and sellers try to sell more. When they go down, buyers want to buy more, sellers try to sell less. There is no other aspect of the complicated society in which we live where you have such an extraordinary cost-effect phenomenon. Bang goes the cost, up goes the price, and you know with some certainty that the sellers are going to move that way; the buyers are going to move the other way. Never mind for the moment how fast they move, or the elasticity. You know there is going to be overall change in the structure, in the arrangements. That one central activity looks scientific. I understand that. I think that is genuine. It approaches being a universal law. But resembling a science is different from being a science.

Q. Is economic activity, then, economics' main attraction to science?

A. Actually; that is a subsidiary one, but important because this cause-and-effect pattern gives a plausible similarity to science-like and economic-like undertakings. The real attraction is that, for some reason I'm not sure of, the vision behind the contemporary economist is not one that Adam Smith or John Stuart Mill or John Maynard Keynes or Alfred Marshall had. It is not what happens to the reliable reproduction of a society of perfect liberty, which is what Smith worried about. Or what happens to the moral temperature of the undertaking, which is what John Stuart Mill worried about. Or what happens to the overall political tone of society, which is what Keynes worried about. The contemporary economist's vision has contracted so that words such as "sociological" and "political" become smaller and smaller or drop out. This has occurred to the point that even to admit theft presence by calling the whole thing political economy rather than economics becomes, in some fashion, out of the question. You do not want economics to be associated with politics. You want to shed it rather than emphasize it.

Q Do you agree that the movement toward science has yielded considerable benefit in some areas in economics?

A. I am not sure. It depends on what you want. If what you want out of economics is the most accurate, responsible testament to the rate of change of this or that, of the elasticity of this or that, then, yes, I am sure there have been increases in our knowledge, though not very much that is predictive. If you want a deeper reading into the sociopolitical texture of society, I think the movement has produced pretty close to zero.

Q. If we look more closely; by using these methods, we indeed have learned a little more about the factors involved in economic growth, even if they remain ambiguous.

A. I am not sure about that, nor do I wish to contest it. It may very well be that we have learned more about the change of some kinds of technology in terms of growth rates. At the same time, have we asked whether this new technology has had any effect on, let's call it, the moral texture of society? We have certainly learned extraordinary ways of transmitting information around the world and bringing it to your dining room. Have we asked ourselves whether the ubiquity of the TV set and its message has raised or lowered the average level of sensibility, sensitivity, and even intelligence? We have not. When you turn on the TV set, what you see is a picture of automobiles. They all do the same thing - they go vroom, vroom around the corner. This teaches you something that is not good about the moral texture of society.

Let's put it differently. Say we came across a buried village into which no one had ventured for several thousand years and where the homes still existed. We could see where the chairs were, and we could see these funny little machines around which everyone sat. We discover that 20,000 years ago, they already had the TV set. So we turn it on. And what do we see? What comes out of this set are the most extraordinary stories of falsity. We see people enthusing to one another about the quality of the meat they got at the corner grocer, or some other product. And we know in some way that what they are saying is being read from a card, rehearsed. It has no relation to the truth or honesty. It is an advertisement. When you look at the actual content of what you see on TV today, it is a world of hypocrisy. Doesn't it teach children something when they turn on an extraordinary machine whose implicit message is that this is the way people behave, and should behave? They should buy this and own that, and it will lead to a happy life or happy family or getting the girl you want, and so on.

Q. On the other hand, a lot of young economists are using these same techniques to explore areas of politics and sociology. They measure, say; the level of government spending and find that, in some cases, it has not harmed the rates of economic growth and may; indeed, even help economic growth.

A. I do not doubt for a second that there is constructive work about the rates of economic growth. Nor do I doubt that measurable things in which the variables are usually money-related or spending-related or income-related can be better understood through these processes. I am pointing out that there are other aspects to that performance, like Adam Smith's man made stupid and ignorant by the sameness of the factory work. I am pointing out a world in which the television floods life with the curious thing called advertising, which is, in fact, a kind of legitimated falsehood - it is not even falsehood but legitimated hypocrisy. I am not quite sure even that is the right word. You do not believe ads; everybody knows you do not believe them. Nobody really believes that the two women enthusing over two brands of aspirin are saying this spontaneously. They laugh, people laugh, that is advertising for you. Had we suddenly discovered that that was the way things were 20,000 years B.C., we would say, what kind of a civilization can this be? If this were not so normal to us, if we came upon it for the first time, we would say, Oh, my!

Q So are you saying that economists no longer seriously discuss the better society, the good society?

A. That is exactly right. And what is interesting about it is why. John Stuart Mill did. Look at Alfred Marshall, the essence of Victorian economics. He talks about the possibility of increased chivalry in business. We laugh, but that is not so silly. It means better employment terms, longer-term contracts, better retirement terms. There are firms in Scandinavia and in Germany that in some real sense are more chivalrous. That is very important. You do not find that in this country. There is very little talk about that. It does not belong on the economic conversation list. I think there has been a flight in our country to turn economics into a science because - for whatever reason, and I am not really sure what the deep reasons are - we have been seduced or tempted or made afraid of the social, moral, and political consequences of the things we measure.

Q. There is a large body of opinion in economics today that holds people are making their own decisions about the good society through the workings of the market.

A. For example?

Q. What we normally associate with the Chicago school - maximum amount of freedom to make economic choices, which leads to the highest form of satisfaction. Don't you think that is what they are saying?

A. I am so uneasy about these words, "highest form."

Q. Well, let's say "highest degree."

A. I am not sure how that welfare consequence is perceived or measured. I am uneasy about it. I see a world that is drenched with institutionalized hypocrisy and I say to myself, how can people discern what may be the richest, most rewarding lives for themselves when they are surrounded with this stuff?

Q One thing that concerns me is that it seems economists who want to maintain their standing in the profession are afraid to speculate about political, moral, or sociological matters.

A. It did not used to be so. I refer to Marshall, for goodness' sake, never mind John Stuart Mill. Why were they not afraid to speculate in those days? Or, more to the point, what is it that makes people morally shy; economists morally shy? You would think just the opposite, since there is no more communist threat. You would have to escape the unpleasant side effects of capitalism if we were under some kind of political competition, but we are not. The United States is unequivocally the commanding power of the world. And you would think there would be every reason, if they wish, to explore its soft as well as its hard points. Instead, there seems to be a flight from the difficult stuff of naming names, even such a simple name as capitalism. The trouble with capitalism is that it obviously has some political context, some sort of meaning that economists are now trying to avoid.

Q. It implies an ideology, and economics today - to the extent people say it is a science - is thought of as ideology-free.

A. Yes, that is probably indeed a motive. For example, I am tremendously interested in the fact that what was used all through Mankiw's book and all through Joseph Stiglitz's [now chief economist of the World Bank] textbook is "free-market society" rather than "capitalism." Markets aren't free. They depend on government.

Q. The expression "free market" is ideological in connotation, but the current mythology is that it is entirely pragmatic language. You raise an important point. Freedom has so many connotations, doesn't it?

A. Government is always on the defensive in contemporary economics and markets are always, all things considered, on the good side. Of course, economists know there are monopolies and trusts and all of that, but, by and large, markets get a favorable reading and government gets an unfavorable reading. So they call them free. But without the government, the market as a system would not last two minutes.

Q You insist on giving your reading of the title "The End of the Worldly Philosophy" an optimistic twist.

A. Perhaps that is my weakness. But I do not think so. I don't honestly know whether the unwillingness of economists to examine the political and moral consequences of capitalism is going to come out well or badly. I do not think it will help at all. But I don't know if it will be as negative as I warn the readers. I leave the reader with the vague hope that perhaps in the end it will be for the better.

I foresee a threat, a moral threat, a kind of weakening. I foresee the possibility that economics will become more and more like medieval philosophy - precise, elegant, and meaningless. That is a possibility for which I obviously have no way of making a hard prediction. I prefer to end the book on a ray of hope. I do not want to make my readers ready to go out and shoot themselves. I prefer that they go out filled with a desire to improve the quality of thinking about the economy in its full complexity.

ROBERT HEILBRONER is professor emeritus of economics at Harvard University.

COPYRIGHT 1999 M.E. Sharpe, Inc.
COPYRIGHT 2000 Gale Group