Tuesday, December 7, 2010

"Inside Job" -- the movie

I wish I could say, as Paul Krugman does today in his blog, that I'd been able to see the new documentary Inside Job about what led to the crash of 2008 and who was involved, but where I live the 'free market' (in the form of a monopoly that owns all the movie theatres) for some mysterious reason prefers to show only the most mindless Hollywood trash, the current opiate of the masses.

  It seems the movie is less than flattering about the role some economists have played. Krugman comments:
OK, about the economist-bashing: I thought it was basically fair. There aren’t, I think, all that many cases when economists are literally paid to offer a specific opinion — although Greenspan’s defense of Keating qualifies. But the movie didn’t say there are. What it suggested, instead, was a kind of soft corruption: you get paid a lot of money by the financial industry, you get put on boards, but only if you don’t rock the boat too much. Besides, you hang out with these people, and get assimilated by the financial Borg. I think all of that is very true.
I like that idea of "soft corruption". Is this what goes on in the textbook market too? A successful author is paid a lot of money, "but only if you don't rock the boat too much". In contrast to his kick-ass columns for the Times and his blog, Paul Krugman's own introductory text doesn't rock the boat any more than average. (I haven't seen the second US edition, but I'd be shocked if it gave any reader even a twinge of seasickness.)
   His second point -- the intellectual assimilation that takes place from hanging out with people -- is an almost inevitable by-product of our make-up as social animals. A few resist it, but not many. I certainly didn't when I was an economics student...


1 comment:

  1. Thanks for the post. Hopefully we’ll see this in the UK soon.

    As regards to Krugman’s review, I wouldn’t call it ‘soft corruption’ as such. That suggests to me that when economists paint the picture deemed appropriate by the State Department or their big bank employers for example, against their own personal judgement, that this is in some way illegal in the context of the rules they are accountable to. It is absolutely legal.

    I prefer to use the lens that Chomsky and Foucault are known for, that is, that such behaviour is rewarded for it helps to maintain a certain ideological status quo. This blog provides an excellent summary of the philosophical grounding for this (see parts 1,2 and 3): http://peakcomplexity.blogspot.com/2010/12/debt-dollar-discpline-part-i-financial.html

    I remember listening to Chomsky being interviewed on a radio show when I was an undergraduate and he explained that from childhood, in our homes and in our schools, we are taught that being ‘good’ and ‘achieving’ will mean that we are ‘successful’ and duly rewarded. The terms ‘good’/’achievement’/’excellence’/’success’ are all pre-defined and if you seek to redefine them under your own terms, no matter how strong your grounding and reasoning for doing so, you are punished. It is a subtle form of enforcement no less pervasive than the more explicit kind seen in totalitarian states. How many of our most progressive thinking academics are shunned by the media and left to write papers that reach only a small minority while others are lauded with Nobel Prizes for following the path laid out before them by others? The ‘experts’ in the financial sector are gradually bought off as they come closer to peering behind the curtain in my opinion through increasingly huge yearly bonuses. They didn’t rock the boat as the bubble was at the razors edge as it’s not what they have been taught to do – to be bold and question your place in the line. To do so is threatened with punishment in the form of a sacking, financial hardship, and exclusion from ‘the club’ they have invested so much time in. Politics works along similar lines. To be ‘successful’ you have to pay your dues (but to what?).

    However, there are examples of those who have worked on the inside for a long time, paid those dues and they are now willing to venture out of the cave as the threat of punishment appears less of a worry.