Patricia Cohen made the Arts section's front-page with a think-piece, "Ivory Tower Unswayed By Crashing Economy," examining why the recession hasn't resulted in the immediate scrapping of free-market oriented economic textbooks and the altering of theory stressing the efficacy of low taxes and deregulation.
For years economists who have challenged free market theory have been the Rodney Dangerfields of the profession. Often ignored or belittled because they questioned the orthodoxy, they say, they have been shut out of many economics departments and the most prestigious economics journals. They got no respect.
That was before last fall's crash took the economics establishment by surprise. Since then the former Federal Reserve chairman Alan Greenspan has admitted that he was shocked to discover a flaw in the free market model and has even begun talking about temporarily nationalizing some banks. A Newsweek cover last month declared, "We Are All Socialists Now." And at the latest annual meeting of the American Economic Association, Janet Yellen, president of the Federal Reserve Bank of San Francisco, said, "The new enthusiasm for fiscal stimulus, and particularly government spending, represents a huge evolution in mainstream thinking."
Cohen seems to miss the irony that she is troubled to find a political orthodoxy in the one academic discipline -- economics -- where the conservative ideology of individual freedom and free markets has something of a foothold. If the Times has ever been distressed on a corporate level about the ideological imbalance in departments of Middle Eastern studies, social sciences, or English, it's hidden it perfectly.
Yet prominent economics professors say their academic discipline isn't shifting nearly as much as some people might think. Free market theory, mathematical models and hostility to government regulation still reign in most economics departments at colleges and universities around the country. True, some new approaches have been explored in recent years, particularly by behavioral economists who argue that human psychology is a crucial element in economic decision making. But the belief that people make rational economic decisions and the market automatically adjusts to respond to them still prevails.
Unquestioning loyalty to a particular idea is what Robert J. Shiller, an economist at Yale, says is the reason the profession failed to foresee the financial collapse. He blames "groupthink," the tendency to agree with the consensus. People don't deviate from the conventional wisdom for fear they won't be taken seriously, Mr. Shiller maintains. Wander too far and you find yourself on the fringe. The pattern is self-replicating. Graduate students who stray too far from the dominant theory and methods seriously reduce their chances of getting an academic job.
Of course, that never happens to conservative academics challenging the liberal status-quo on gay marriage or abortion.
Cohen only glanced over the fact that all the economists calling for new economic ideas are liberals, saying only that "these heterodox -- as opposed to orthodox -- economists generally tend to fall into the liberal camp." Cohen, having discovered the one academic establishment that isn't overwhelmingly liberal, criticizes it for lack of balance.
Cohen couched the failures of Communism and the success of countries that opened their markets in the 1980s as passively as possible. What an awkward sentence construction this is:
For many the narrative that seemed to best explain the experiences of the 1970s, '80s and '90s, when the Soviet economy collapsed, and India and China became more market oriented was told by free market theorists.
At the same time, she denigrated the stuffy defenders of free-market orthodoxy by quoting two unlabeled liberal economists, labor economist David Card of Berkley, who asserted that the minimum wage isn't a job killer, and University of Missouri economist L. Randall Wray, who wrote a paper with the loaded title "Neocons and the Ownership Society."
A real shift among economists will come only if there is a wholesale collapse, Mr. Wray and Mr. Card agreed. If unemployment is still high three years from now, then you might start to see a paradigm shift, Mr. Card said; economists will "have to say that the market isn't supposed to work this way." But if the economy bounces back in a year, then they will be able to dismiss the financial crash as an anomaly that is unimportant to the larger theory, he added.
A field shifts, Mr. Card and Mr. Wray said, not so much because the wise elders change their minds, (they are too invested in the way things are), but rather because a new generation of scholars comes along and pushes into new areas of research.