What happens when you throw economists, theologians and a literature professor into a room to talk about markets and morality? Sparks fly, that's what. Including a warning from Cornel West that we are "losing the class war."
Wednesday night at NYC's Union Theological Seminary, competing ideas clashed and questions tumbled forth in a spirited disucssion: Are people really equal? What does that mean economically? Does mathematics or history provide a better lens for approaching economic issues? Does the market really deliver what people want? How can we avoid being exploited by the market?
The Institute for New Economic Thinking (INET) and the Union Theological Seminary (UTS) hosted the second installment in an intriguing series of conversations on economics and theology featuring Nobel Prize–winning economist and INET advisory board member George Akerlof; UTS theologian Dr. Cornel West; UTS president Rev. Dr. Serene Jones; English professor and former director of the Lyndon Baines Johnson Library Betty Sue Flowers; and INET executive director Robert Johnson.
Akerlof, who teaches at Berkeley, is an economist known for his challenges to the neoclassical theory dominant in his field for the past several decades. He has repeatedly shown that markets do not work the way their worshippers insist: people do not have adequate information when they make purchases; they often behave irrationally; and markets often work very inefficiently. His latest book, co-authored with Rachel Kranton, explores how our social identities shape our economic destinies.
On Wednesday Akerlof talked about his new book in the works, Phishing for Phools, which looks at how free markets give free rein to all manner of hustlers who prey on our emotional and cognitive weaknesses to sell us things that we don’t need and may harm us. In this climate, he insists, even reasonable, intelligent people are routinely caught in market snares. Drawing upon colorful illustrations of 19th-century swindlers who sold tonics that often cured customers of the disease of life itself, Akerlof underscored the importance of regulation in the market minefield.
Heterodox though he may be, Akerlof is, after all, an economist, and puts great faith in the power of mathematics to address human dilemmas. But he acknowledged that economists need better mathematics with which to predict catastrophes and understand the vagaries of human behavior. His faith in technocratic solutions was evident in his answer to a question I posed about how to best attack false economic arguments in the political realm – such as the commonly touted myth that Social Security contributes to the deficit (it doesn’t). I specifically wanted to know if mathematics or moral arguments were better suited to expose the lies. His answer? “The CBO has some good information.” In fairness, I think he may have misunderstood the question.
Cornel West may not have the answer, but he understands the question. In sharp contrast to the mild-mannered, delightfully nerdy Akerlof, West speaks with the bold sweep and poetic passion of a prophetic theologian. He challenged the room to consider the “structures of domination” that are “terrorizing people” in our economy, and he roundly criticized the reliance on mathematics to address real human suffering. To that sally, Akerlof agreed sheepishly that “We need to know how to talk about power.”
Unlike Akerlof, West does not think the economy is working particularly well. He cited high poverty rates and growing economic inequality as signs that the class war was going rather badly for most folks. He warned, however, that giving into cynicism would only stymie efforts to challenge exploitation and alleviate economic pain. West emphasized the need for economists to wake up from their “mechanistic, Cartesian dream” and focus more on the lessons of history. He applauded the great economist John Maynard Keynes for his association with the Bloomsbury Group, where the literary and historical perspectives of figures like Virginia Woolf informed his economic vision. Betty Sue Flowers noted that 19th-century poets had a deep understanding of human temptation and often deployed religious imagery to describe our vulnerability to exploitation.
Rob Johnson described economics as “the secular religion of mankind” and noted that many of its structures are “mirages” that lead to suffering and demoralization. He pointed out several ways in which the field of economics had been corrupted, including the tendency of economists to serve as the PR department for the powerful. Amen to that!
There was one thing everyone in the room agreed upon: We need better stories to communicate progressive economic ideas, and economists themselves are unlikely to provide them. I thought of John Steinbeck’s The Grapes of Wrath and how the author's critique of exploitation contained not a single mathematical equation. And yet it moved the public enough to create changes in labor laws that alleviated the suffering of millions. More discussions that blend the voices of economists with historians, poets, linguists and theologians are a promising step toward getting to such powerful narratives for our own times. Only connect!