Some cruel people would have me believe my discipline is not relevant. Well, the answer to the current economic crisis is in the works of our Romantic forbears, according to Richard Bronk. On Saturday he made an argument for an imaginative, Romantic approach to economics in a Guardian article. It is not really possible for me to comment on the economic judgement of the piece as someone who, frankly, is too fiscally-inappropriate in her own finances to comment on the country's.
Here's a bit that I think I understand and rather charmingly applies Keats' negative capability to the situation:
The great danger is that we exchange the market fundamentalism of recent years with a similarly hubristic conviction that the great policy brains of the world can devise a single "New Deal" that will solve all our problems. Not only does this fly in the face of the dangers of universal solutions, but in a world made uncertain by constant innovation and self-reinforcing emotional reactions to events, we also need to realise the limits of any such grand plan and, indeed, of reason itself. Far better to learn from Keats the merits of "negative capability" - being willing to remain in uncertainties without "irritable reaching after fact and reason" - and stay imaginatively receptive to pointers as they emerge.
I'm hesitant about this kind of approach to Romanticism and use of the label. When we wield the term in this way we make a generalisation about a movement that as we discover more writers and thinkers of the time we find was diverse and complex. I can't make any judgements without reading Bronk's full-length work The Romantic Economist*, but the idea of this book fascinates me and I'm dying to read it. In an apt state of affairs, however, I can't afford to buy it... ** So, should anyone know Richard Bronk, his publisher, or his agent, or should they simply spot him on the underground, I'd love a copy to review for this blog or for another publication. I think a Romantic, non-economic perspective would be an excellent standpoint from which to read the volume.
Rally the troops, bring me Bronk! Please and thank you.
*The book's been sort of reviewed in a wider article here. The full url ends in a beautiful collection of words: 'recession-depression-economy-wordsworth'. I'm suggesting this as the new tagline for our museum. 'Recession = Depression. Economy? Wordsworth!'
**I'm a fulltime volunteer for the Wordsworth Trust.
Leatherface Reflects
1 day ago
Larry Elliott's so consistently profoundly wrong that I try to prevent myself from reading anything he writes as it tends to aggravate me. That review was a case in point.
ReplyDeleteAssuming rational agents has never been the reason this crisis wasn't more widely predicted, indeed it was the most rational agents (the smart guys in hedge funds with billions to play with and strong incentives to be right) that by seeing it was coming were able to make it happen that much faster.
I take particular issue with this:
'There have been many economists down the years who have expressed scepticism about reducing their discipline to a mechanistic subject. Malthus told Ricardo to be wary of becoming too attached to abstract hypotheses; Schumpeter talked of creative destruction; Hayek saw the market as a voyage of discovery; Keynes stressed the importance of "animal spirits".'
It is precisely rationality that prevents you viewing the economy in a mechanistic way. If everyone was backwards looking (inferring from past regularities), or otherwise boundedly rational, then controlling the economy would be a straight engineering problem. That agents are forward looking (and, at least in aggregate, near rational) means that people's expectations of the future play a crucial role in determining what actually will happen, and in a literally massive literature economists have studied how in certain circumstances these expectations can be completely self-fulfilling, causing e.g. bubbles in the housing market, and "animal-spirits" to have a significant real effect.
We have not forgotten the lessons of the past, we just understand them rather better these days (and, apparently, rather better than Mr. Elliott).