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Economic theory and the big economy.

the ideas of economists and political philosophers, when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else.

--John Maynard Keynes.

Indeed, Keynes (1936, pp. 383-384) was right that the world is ruled by little else. This paper is about economic theory that co-rules, a theoretical pillar of what we will explain as Big Economy. It centers on a striking feature: economic theory appears so robust in terms of methodology and so slender in terms of substance. Replete with accelerating mathematics and with reliance on the rationality of economic man, it is a methodology that is typically characterized by economists in terms of rigor and science. It is suggested that the rigorous and scientific reputation of its methodology--at the cost of the slenderness of its substance--allows economics to have the appearance of being a stronger theoretical pillar of market fundamentalism. Such market fundamentalism (or neoliberalism) is in the sense of the free market explained by Friedrich von Hayek (1944) and embraced by adherents of the Chicago School like Milton Friedman (1994, p. ix), regarding the market as a self-organizing system, a spontaneous order and our best device for allocating resources. It constitutes a stronger theoretical basis, if that basis is regarded as science, for advocating perspectives represented by a term like Big Government. This has three implications, at least, for Macro Public Administration and other non-economist theorists with an interest in governance, as well as for practitioners engaged in (say) New Public Management or in (say) activities like outsourcing to the private sector.

The first implication for Macro Public Administration theorists is that it should turn even more to analyze whether economic theory is right about governmentality, described in the next section--and to reframe the focus toward what will be explained as Big Economy, including market fundamentalism. For the latter, for instance, is Friedrich Hayek (1944) right that the market is the only true, or prudential, guide to life? Is he right that the role of government is to preserve the framework of strong private property rights, free markets and free trade--with its emphasis on privatization, deregulation, and the withdrawal of social provision of services. I have indicated before why I do not think that Hayek is right (Farmer, 2007, pp. 345-357); other relevant and useful Public Administration literature is also available (e. g., Thorne & Kouzmin, 2006, 2010; Kouzmin, 2010), and the matter has also been discussed at conferences (e.g., again at the 2012 Public Administration Theory Conference where the keynote speaker Hugh Miller made a presentation on "A narrative border crossing: How market fundamentalism frames state and civil society"). Some will agree, and others will not; and, clearly, there is a also a non-Public Administration literature on this (e. g., Harvey, 2005). But that is not the point; more is needed. Recommended for Macro Public Administration theorists is to seek to re-frame imaginative analysis (see sections 2 and 4 of this paper) by developing the notion of Big Economy, which will be later explained as a counterpart of Big Government. Part of this re-framing includes emphasis on analyzing economics as a theoretical foundation of market fundamentalism and Big Government. It includes analysis of the undue power from the scientific status claimed for economics. This can also include analysis of the prevalence of scientism in society, the longing for the status of a physics (e. g., in economic science, political science and even in "administrative science").

The second implication is that non-economists with an interest in governance--like public administration theorists should contribute more to the supply of economic theory, and especially to the foundations of economic theorizing. (The latter would include, again, the preference for science and scientism and the literature on philosophy of economics (e. g., see Hausman, 1984; 2008). Non-economists should be more than mere buyers of economic theory; they bring valuable insights for upgrading the substance of economics. Recall that oligopsonists are not without power as buyers in a market, such as buyers in a market of ideas. Recall that bi-directional benefit-seeking is a principle used in some peripheral areas of economics, e. g., in neuro-economics. But even more importantly, such noneconomists should recognize that the imbalance between rigor of methodology and narrowness of substance is large and significant. Sophisticated as the methodology is, the economic substance is too scarce for comfort. Such needs have been recognized by some within the economics discipline, and other disciplines can contribute.. Thus, this paper devotes significant attention to underlining the mainstream view of rigor and substance.

Seeking such a change in the imbalance between methodology and substance can be sought rationally from the "outside," on the one hand, through emphasis on hermeneutics. The imbalance between robust methodology and slender substance can be seen as an imbalance between attention for what is considered science and what could be added by hermeneutics. Others might go even farther: a more expansive claim might speak of the greater productivity of hermeneutics, compared against what is counted as positivist. For economists, adjustments in the balance between robust methodology and slender substance can be assisted by greater recognition that, at a minimum, positivism does not rule out hermeneutics. Hermeneutics concerns developing understandings and meanings and reasons, as Philosophy of Science distinguishes such understandings (and meanings and reasons) from positivist aims like explanations and causes (e.g., see Diesing, 1991). Economist David C. Calander (1999), for instance, labels himself as an economic gadfly because he opposes the Chicago (the Becker/Friedman) approach (itself a conclusion open to hermeneutic analysis) "that the market is the solution to everything" and the M.I.T approach that "reduces everything into quasi-formal models." He does support the art of economics, which he describes as going back to Lord Keynes' father, John Neville Keynes. On the other hand, such fixit attempts and disciplinary deviations from the status quo in both economic and non-economic disciplines can be inhibited by extra-rational social and individual factors, and they require discussion about whether a minimalist or a radical approach is more hopeful. The social can be symbolized in terms of magma, described by Castoriadis (1997) and others; the individual can be symbolized in terms of the repetition compulsion, described by Freud (1914) and others.

A third implication is that other hermeneutic tools for contributing to the supply of economics may well be identified by public administration macro theorists (and others) being willing to learn from the experience of the economic discipline, identifying how (say) economic theory has structures and patterns of thought that are parallel to problematic conceptual practices within their own disciplines. Recall that learning from the competition, as it were, is good entrepreneurial practice. One way for the public administration thinker to read this text is to play (or fantasize), as we go along, about any parallels between economics and public administration (or political science). For instance, the reader may decide that public administration parallels economics in terms of substantive output, and both have ways of compensating for the differing levels of emptiness in their substantive buckets. Arguably, public administration compensates by appealing to practicality, and mainstream economic theory does so by increasing its degree of mathematicization. The reader may then go on to fantasize about the respective roles of ideology; and so on. What do the text and sub-text of economic theory (no less than public administration theory) tell us? Granted, there are still difficulties. Those who conceptualize public administration as consisting only of skills training for low-level public employees would have little interest, for instance.

This paper consists of four sections about mainstream economic theory and its importance both to economists and non-economists. First, there is this introduction. Second, there is Big Economy and the first implication--noted above--for Macro Public Administration thinkers. The third explains methodological rigor and substantive slenderness, and relates to the second and the third implications--also noted above--for Macro Public Administration Theory. The fourth relates to all three of the implications noted for Macro Public Administration theorizing and practice. It is a reprise to Big Economy, fixit opportunities, examples of inhibiting factors represented by magma and the repetition compulsion, and examples of approaches represented by Ha-Joon Chang (in 23 things they don't tell you about capitalism), Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi (in Mis-measuring our lives) and Georges Bataille (in The Accursed Share). For both non-economists and economists, the relative advantages of a minimal and a radical change approach are illustrated.


What is big economy and big government, and why are they significant? Should the analysis be re-framed toward discussing the method-substance imbalance in economic theory insofar as it can be understood as theoretical support for Big Economy? This speaks to the first implication, noted earlier, for Macro Public Administration theorists. Borrowing the phrase from Wittgenstein (1953, p. 103) writing in a different context, can Big Economy "show the fly the way out of the fly bottle?" Or, as we would put it now, can Big Economy be used to show economics the way out of the box.

Let us continue with "A Balanced Approach?" and "Mixed Meanings?"

A Balanced Approach?

It bears repeating that there are pro and con arguments for market fundamentalism, for Big Economy. Pro arguments include the claims that market fundamentalism has produced many more products and benefits (more stuff, as it were); that it is required for individual freedom; and that it induces visceral appeal e. g., in rushing to buy the latest cell phone, or the latest "cool" game, and so on. Con arguments include the claims that market fundamentalism leads to 'government for business, by business and of business;' that it depends on what may be considered arbitrary stories like the invisible hand; and it undermines democracy, public goods, and non-commodified values, and so on.

Each of these arguments, I should emphasize, has a substantial literature. To underscore this, take as a single example the last argument (about undermining democracy, public goods and non-commodified values). Noam Chomsky is among those who would argue that a "vibrant political culture" requires public schools, neighborhood groups and organizations, libraries, public meeting places and trade unions--non-market institutions. He claims that democracy saddled with market fundamentalism (or "neoliberal democracy" as he calls it), "with its notion of market uber alles, takes dead aim at this sector" (Chomsky, 1999, p. 11). For him, neo-liberalism has as a byproduct--a depoliticized citizenry marked by apathy and cynicism (Chomsky, 1999, p. 10). There are other authors, e. g., Benjamin Barber (2007), writing on the infantilization of citizens by economic practices.

Yet the rational and the visceral are both featured. On the side of Big Economy, there may be subsidiary myths and slogans like that relating to the hyper-important entrepreneurial role of small business (e. g., Davis et al, 1996). They have been criticized, e. g., arguing that the free market itself is a myth (e. g., in Martinez, 2009, with a title "The Myth of the Free Market). On the side of Big Government, there may be subsidiary myths and slogans such as that it was President Thomas Jefferson, and not President Gerald Ford, who pronounced that "The government big enough to give you everything you want, is big enough to take away everything you have."

Mixed Meanings?

Big Economy or market fundamentalism, on one view, means Big Government, with all the rights and insults attached thereto. Does not market fundamentalism imply that the market governs?

Begin with Michel Foucault (2004) and Jacques Derrida (1967). With thanks to Foucault's explanation of "governmentality" (a view of who and what governs, including the economy, the king, the schools, and the parents and the grandparents), this does underscore the artificialities--the reifications--between disciplines (and words and meanings) and between Economics and Public Administration. Such is often the case in a Derridean world where texts come also with sub-texts, and where the unconscious is recognized. Big Economy interpreted to mean Big Government has at least two implications. A first implication is that a primary locus of big government is the economy. For instance, government might look as though it is in buildings like the Capitol, but it might be (or might not be) in a complex like Wall Street. A second implication is that a primary pillar of Big Economy could be economic theory; but I do not underestimate other nontheoretical pillars like big corporations, corporate lobbying, and corporate journalism.

The difficulty of the Derridean view of the nature of interpretation is reflected in Derrida's own writings and in others like Jean-Francois Lyotard when speaking of what he called "postmodern science." Derrida himself, for instance, advocates an interpretation of interpretation (Derrida (1978, p. 17), for instance, that recognizes that the aim of "deciphering a truth or an origin that escapes play and the order of the sign" is illusory. Lyotard speaks of postmodern science as concerning itself with such things as undecidables, the limits of precise control, conflicts characterized by incomplete information, 'fracta,' catastophes, and pragmatic paradoxes ... (Lyotard, 1984, p. 60.) We will return to this in the second section when commenting on deconstruction as a substantive lack in mainstream economic theory.

Let us continue here thinking about Big Government (a topic with a substantial literature, e. g., Madrick, 2009; Riley, 1987;), as it is being described here as a parallel to Big Economy. The term Big Government, on one interpretation, is an imprecise and rhetorical attack on the regulatory (and taxing and other) interference of government against the (another rhetorical term) free market. That is, it is a weapon for market fundamentalism, which it is easy to suppose obtained additional power from events like the collapse of the Soviet Union and will obtain increasing power as the so-called world market continues to fight for profit. Also, as suggested above, it is also a "defense" for Public Choice Economics and the money-making and vote-influencing that accrues from outsourcing government activity. There are alternative meanings, and I (again) I would like to keep them open, e. g., a rhetorical attack against social programs, a part of the attack of the poor by the rich, or even the growth of administration in response to increasing demand from population increase.

A valid objection could be that there are other possible and diverging understandings of Big Economy and Big Government. Consider only three. First, let us say that an economy is big when it is bigger than any other economy, e. g., the U.S.A.'s nominal Gross Domestic Product (G.D.P.) in 2011 was estimated to have been a quarter of the World's nominal global G.D.P. (International Monetary Fund, 2012). But there is no end of possible counter-arguments (and counter-counterarguments). If each and all the economies were 1000 times smaller, would the U.S. economy still be big? If Chinese nominal G.D.P. were rising fast and the United States' G.D.P. were plummeting, would the U.S. economy still be big?

For another understanding of Big Economy, consider the view that economics is an end in itself, without being a mere element for living.

This would be in opposition to an understanding (e. g. by distinguished economists like Nobel Prize winner Robert Fogel, 2000) that the economic is smaller in that it is only a part of living that involves both material and non-material assets. He advocates the greater importance of such non-material assets as self-realization, which he emphasizes is finding "deeper meaning in life than the endless accumulation of consumer durables and the pursuit of pleasure" (Fogel, 2000, pp. 176-177). In other words, life is not only more than microeconomics but also more than macroeconomics. In a parallel way, consider this view in terms of money--monetization and money rhetoric. Monetization is described by Ruben Oliven (2009) as the extent of increase in the proportion of goods and services exchanged by means of money, and money rhetoric is an indicator of the extent to which money is a value in that society. "Foreigners, coming to the United States, are frequently surprised about how explicit and pervasive money is in that country" (Oliven, 2009, p. 161). For Oliven, money in the United States "is a matter that should not be taken lightly. A lot of time (and hence money) is devoted to financial matters" (Oliven, 2009, p. 1). It has become what he calls "a central value, and commoditization has fully extended to all spheres of life" (Oliven, 2009, p. 161). He draws a contrast with Brazil. On the one hand, he characterizes North Americans as preferring independence and not wanting to depend on friends, and thus he notes that even many pre-teen middle class children work to earn money. On the other hand and by contrast, he claims that Brazilians prefer building networks of friends by "always asking for or offering help" (Oliven, 2009, p. 119). The money rhetoric in the United States is bigger.

Big Economy and Big Government do not constitute a singular set of two alternatives. For instance, it is not merely a choice between one or the other, partly because one could be satisfactory for some functions or contexts and not for others. An analogy is car v. bicycle (Farmer, 2007, p. 349): it argues that the fact that a car is faster does not mean that a car should always be chosen. Nor does it mean that choice of Big Economy necessarily means that Big Government, or vice-versa, is without problems. For instance, Big Economy could exist, while the Federal government or other government could still have significant problems (such as "lack of concern" for "general public interest and competence" Riley, 1987, p. 173). Further, there are as many forms of each as there are varieties of capitalisms or governments, e. g., reflect about differences between super-capitalism (as Reich, 2007, describes it), capitalism in Russia today, capitalism in the United States a century ago.

Both Big Economy and Big Government will have surface and underlying meanings, and both can be expected to be ambiguous. On the surface, for instance, Big Government (and Big Economy) claims are anti-bigness claims about government or bureaucracy or the economy. But there is variety in such claims; for instance, Big Government for some is not all exclusively economic but also opposed to government permitting certain practices like abortion. Even on the surface, Big Government (and Big Economy) could be mixtures--buzzing swarms--of fact, opinion, myth, ideology and propaganda. On underlying features, the claims of Big Government (and Big Economy) could be underlain by other myths and ideologies etc., seeking to "justify" particular public policies and administrative arrangements. It is in such a context that economics can be an intellectual foundation for both Big Economy and Big Government.

Method-Substance Imbalance

Burn the Mathematics!--Alfred Marshall

The imbalance between method and substance in economics is real, and the cost has been especially high in terms of hermeneutic understanding. However, it may not be for the sake of the substantive idea that a discipline, like economics or public administration, seeks to give assurance that its rigorous products are valuable. It might be for its own disciplinary self-interest. Imagine that mainstream economic theory is itself a market product, for example, that is subject itself to the market insights of mainstream economic theory. This is in contrast to being a mere producer of public goods. As a rational monopoly (or even oligopoly), economic theory would explain that a monopolist of an intellectual product will restrict its output and raise its prices. Barriers to entry, such as difficult mathematicized methodology, contribute to sustaining monopoly. This also relates to the second implication for Macro Public Administration. Recall that the second implication is that non-economists with an interest in governance--like public administration theorists--should contribute more to the supply of economic theory, and especially to the foundations of economic theorizing.

Many within the economics profession hold that power is gained for Economics from its rigorous methodology which includes mathematics, analysis and abstraction They happily accept the side effect of the slenderness of the substantive output, because the narrowing is considered to have methodological advantage of providing firm answers. Edward Lazaar (2003, p. 102-103), for example, is one who asserts that the strength of economic theory is that it is rigorous and analytic, and it succeeds where other social sciences fail because economists are willing to abstract. He also maintains (quoted in Erreygars, 2001, p. 1) that economics is scientific. Lazear is also among those who explain that, to be rigorous, economics must make simplifying assumptions which inevitably constrain the analysis and narrow the researcher's focus. In this way, he (2000, p. 103) argues that the "broader-thinking sociologists, anthropologists, and perhaps psychologists may be better at identifying issues, but worse at providing answers. Our narrowness allows us to provide concrete solutions, but sometimes prevents us from thinking about the larger features of the problem." Lazaar uses the idea of substantive slenderness, even if he does not use the term.

Methodological Rigor

Consider questions that arise about the sources of mainstream economists' claim to methodological rigor--to mathematics and to abstracting. On mathematics, why not follow Alfred Marshall's advice (for the "Burn the Mathematics" quote, see Weintraub, 2006, p. 261)? On abstracting, is it rational to rely so completely on rational and self-serving economic man, and are values or ideology hidden within the rational structure of economic theory?

Turn first to mathematics. The use of mathematics by economics has been long, and the mathematization of economics has grown significantly. The use of mathematics by economists significantly preceded the great neo-classical economist Alfred Marshall, who wrote in his later years the prescription noted above "Burn the Mathematics!" Weintraub (2002, p. 261) characterizes the mathematics for 19th century economics honors students as a set of "tricks and details, based on Newton, which were linked to applied physics and mechanics ..." The mathematization of economics has grown especially during the past half-century. Weinbraub (2002, p. 261) notes that in recent years economists have debated the impact of the "substantial racheting upward of standards of mathematical sophistication within the profession."

The literature, of course, does contain criticisms of the mathematical impulse and rigor. As an example, take Herbert Gintis (2009, p. xiii-xiv) writing on game theory, which is described as the study of mathematical models of conflict and cooperation between intelligent and rational decision-makers. He characterizes as 'manifestly absurd' the discipline's prevailing idea that game theorists can do social theory without regard for the facts or any contributions from other social sciences. He goes on to add that the game theory assumption that humans are rational is only an "excellent first approximation," adding that the bounds of reason are "not the irrational, but the social" (Gintis, 2009, p. xiv).

Turn now to abstracting in terms of mainstream economic theory, Is it rational to rely so completely on rational economic man? There is a literature that would deny this. For an example, see Jonathan Haidt (2012). He describes humans as basing their ideas on moral intuition. That is, they have emotions and then develop their rationale to fit their emotional constructs. There is also negative evidence from neuroscience. The reliance in mainstream economics on the purely rational also seems odd in view of our own economic behavior and the emotional behavior of consumers and producers that we see. It is also odd to celebrate rationality so much when economics incorporates so centrally such metaphors, such tropes, as the invisible hand. Also see Michael Shapiro (1993) in the large literature on the invisible hand, pointing out how the invisible hand and the law and supply and demand work toward harmony; the self and other are considered always congruent. The Fable of the Invisible Hand has a sub-text, in Shapiro's reading of Adam Smith, of divine providence! Such are metaphors, more than models (see Farmer, 2005, pp. 154-167).

In considering the rationality of the 'rational man assumption' in economic abstracting or theorizing, recall that there are at least three differing senses of economic rationality. These are the instrumental (typical in mainstream economics), the procedural, and the expressive. Under the assumption of instrumental rationality, the individual person acts so as to satisfy his preferences optimally. Such rationality "is located in the means-ends framework as the choice of the most efficient means for the achievement of given ends" (Heap, 1999, p. 6). The procedural version of rationality conceives the individual as a rule follower, and such behavior is procedurally rational. An example is Herbert Simon's "satisficing" principle. Expressive rationality is described by Heap (1999, p. 6) as focusing on ends pursued rather than on actions taken in pursuit of those ends. By contrast with mainstream economics, of course, there are alternative economics (e.g., Neuroeconomics and Behavioral Economics) that do not need such assumptions about rational economic man.

A similar explanation and criticism could be offered for the view that economic man is always selfish in his decision-making, choosing only what will optimize his own utility. Economic man is not primarily concerned with features such as civic virtue, empathy, or love. An altruistic Good Samaritan would be considered misguided.

Turn now to the question that asks whether there are values or ideology hidden within the rational structure of economic theory? Yes, there are. And also whether there is a central contradiction in economic theory if such a value were to contradict what a fully rational and fully self-serving "economic man" would provide for himself or herself when s/he designed economic theory?

Would such a rational and self-serving economic man have designed economic theory to give economic man a place that equated himself with a commodity, e. g., with a an apple, a pickled herring or a chair? Yet, see Nobel Laureate Paul Krugman (1998, p. 15), writing that at "the heart of capitalism's inhumanity--and no sensible person will deny that the market is an amoral and often cruelly capricious master--is the fact that it treats labor as a commodity. Economics may treat the exchange of labor for money as a transaction much like the sale of a bushel of apples, but we all know that in human terms there is a huge difference." He explains that the difference is that a merchant may "sell many things, but a worker usually has only one job, which supplies not only his livelihood but often much of his sense of identity." Well yes, the same point applies even if sometimes he has two or more jobs! It is irrational if rational and self-serving economic man chose to equate himself with a mere commodity.

It is no surprise that there are value or ideological commitments within the economics profession. In contemporary economics, one set of economics can readily see what they would characterize as the "necessity" for macro market management that John Maynard Keynes (1936) first advocated in his General Theory of Employment, Interest and Money, e.g., the desirability of government financial stimulation in time of recession. A second set embraces market fundamentalism (or neoliberalism), what is called the Washington consensus that started in 1979. Market fundamentalism (to repeat) holds that, when markets are left alone, they will solve all economic problems. So Paul Krugman (2009, p. 41) can write of the latter that "the belief in efficient financial markets blinded many if not most economists to the emergence of the biggest financial bubble in history." Alan Greenspan, a one-time insider at Ayn Rand's collective discussions, could give a contrary instance of blindness.

Substantive Slenderness

Consider questions that arise. Are the adverse substantive side-effects of methodological rigor large in terms of substance? Why should hermeneutic understanding, as opposed to explanation, be de-valued in economic thinking? Is Erreygers (2001, p. 2) right that a closer look about what economists really know about society "would teach them modesty both about what they have thus far achieved and about what they could possibly achieve in the future?"

Examples of substantive slenderness of economics could be given from a large number of non-economics disciplines, and elsewhere (Farmer, 2012, pp. 111-117) I have indicated the hermeneutic additions that could be contributed from history, anthropology, business, political science, critical theory, psychoanalysis, post-structuralism, neuroscience, philosophy, new rhetoric, and feminism (or womanism) and other disciplines. The corresponding lacks in the substance of economics are recognized by some well-established economic scholars.

This section will offer only four examples. They relate to the lack of predictive capability about future large events, the lack of capability of deepening understanding of the role of the unconscious in economic decision-making, the lack of capability of developing a fuller and more useful categorization of types of capitalisms, and the lack of capability in understanding the utility of post-structural techniques. Altogether, there is a ginormous hermeneutics lack in the substance of economics.

Example 1: Rigorous economics has a poor record of anticipating large changes, both rigorous or non-rigorous. Consider the advent of the multinational corporation, the rise of Japan as a major economic power, the decline in productivity by all Western countries, the loss that the United States is said to have experienced in terms of global economic leadership, and the collapse of the Soviet Union. Robert Heilbroner (1993) reports that none of these "world-shaking developments" was foretold. He indicates that by the 1970s neither the advent of the multinational corporation nor the rise of Japan (the first two items in the list above) had been foretold. Of all the items on the list the "answer is that none of the great research institutions) foresaw them" (Heilbroner, 1993, pp. 19-20). This depicts the substantive capability of economics as significantly limited.

Example 2: Rigorous economics has made no significant contribution toward discussing the effects of unconscious motivations in economic choices. Economic man has no unconscious. Insights about the effect of the unconscious is treated as irrelevant for economics conceptualized as studying the behavior of human choices "as a relationship between scarce means which have alternative uses" (Robbins, 1945, p. 24). The serious study of the unconscious was unknown in Adam Smith's time, but psychoanalysis was well known before Robbin's reconceptualization of economic science. This is odd in the Age of Hyper-Advertising--much directed toward manipulating the unconscious element of choice.

Example 3: Rigorous economics also has a limited record of understanding significant aspects of the nature of capitalism. Notice, for instance, substantive lacks in categorizing capitalism, or even of locating capitalism in history. (No, it should be added that this does not mean that economics has no understanding of capitalism: that would be a patently false claim.) However, a prevailing view is that capitalism is a modernist phenomenon. Yet, some historians report that it is hard to find any period that has no capitalism, no market. Refer again to Richard Grassby's The Idea of Capitalism before the Industrial Revolution, Grassby suggests that a pre-capitalist economy cannot be found. Market capitalism, in his view, "appears as old as civilization and is recognizable even in primitive societies" (Grassby, 1999, p. 23). It is clear that economic theory, within its rigorous limits, cannot have shed significant light on this.

Example 4: Understanding deconstruction (not a simple matter, as indicated in the second section) does suggest that there are substantive limits in contemporary and modernist economic science and in its understanding of economic features like Big Economy or (again) capitalism. Deconstruction, developed by Jacques Derrida, is indeed described as a good reading of a text (see Farmer, 1997). That is, where text is used in a wide sense to include meanings and narratives not only in documents but also implicit in situations and events. It thus includes, on some readings, economic situations, events and other phenomena. But it is good reading which is of a special kind, e. g., questioning the availability of "full presence, the reassuring foundation" and recommending the need for thinking as play (Derrida, 1978, p. p. 17). Recall the example of the interpretation of interpretation noted in Section 2 under the heading Big Economy. Let us point to a conundrum, even if socially constructed, that can be seen toward the center of economics in this respect with a conversation like the following:

--Derrida: Imagine! Help economics think out of the box.

--Other: Tell me how, so that I can identify the foundation.

--Derrida: Wouldn't that put you in a box?

This is essentially unavailable in mainstream economic science, which (as noted by Jack Armiglio, 1990, p. 15) is self-consciously modern, although having "postmodern" moments. Also, on that same page, Armiglio quotes (again) Jean-Francois Lyotard (1984, p. 60) as explaining that postmodern science is "changing the meaning of the word knowledge, while expressing how such a change can take place. It is producing not the known, but the unknown."

Recall that Nobel Prize winning Chicago economist Robert Lucas was described as being deconstructive (no, not his own term) when characterizing involuntary employment as neither a fact nor a phenomenon that needs to be explained when talking about Keynes' General Theory (see Samuels, 1990, p. 232). If he had been asked, Derrida might have explained that to the extent that deconstruction speaks of all texts experiencing undecidability--deconstructive analysis applies both to voluntary and to involuntary unemployment. The methodological rigor in economic science would not admit understanding of the significance of deconstruction.

On the other hand and toward its periphery, economic science has experienced the positive hermeneutic contributions of some gifted economics scholars; but such hermeneutic scholars are in scarce supply.

For example, the economist Deidre McClosky has utilized the perspective of New Rhetoric and Symbolic Interactionism to add insights to, and about, economic thinking. For instance, she has contributed to understanding that the "proofs of the law of demand are mostly literary" (McClosky, 1998, p. 23) and to using rhetorical analysis to claim that "statistical significance has ruined empiricial work in economics" (1998, pp. 112-138). She advises that "rhetorical criticisms of economics can perhaps make economics more modest, tolerant, and self-aware, and improve one of the conversations of mankind."

Beyond these examples, the slenderness of economic substance is also reflected in the inability to resolve the contrary imperatives between two major wings in mainstream economics. As explained, the first set readily sees what it would characterize as the "necessity" for macro market management that John Maynard Keynes (1936) first advocated in his General Theory of Employment, Interest and Money, e. g., the desirability of government financial stimulation in time of recession. The second set embraces the market fundamentalism or neoliberalism or the so-called Washington consensus that started in 1979. It was already noted that this set holds that, when markets are left alone, they will solve all economic problems. So economist Paul Krugman (2009, p. 41) can write of the latter that "the belief in efficient financial markets blinded many if not most economists to the emergence of the biggest financial bubble in history." Economist Milton Friedman could give a contrary instance of blindness.

Kenneth Hoover suggests (with others) that politics have come to a "curious pass. The partisans of the market are everywhere heard, while the partisans of government are muted and defensive" (Hoover, 2003, p. xi). In the mid-century, the situation was reversed. Then "the evils of the market were widely advertised" and "government was the wave of the future" (Hoover, 2003, p. xi). Here is a need for macro public administration theorists, with or without economists, to add more to the conversation.


The distinguished economist Ha-Joon Chang (2010, p. 253) argues that the daunting task ahead of us is completely to rebuild the world economy. As we will explain and meriting a reprise, enemies include the range of societal and psychological impediments such as magma and repetition compulsion--in economics, in public administration, in society, even in you and me; it may well be that too little can be done. Ha-Joon Chang continues to claim that the currently dominant free-market system is fundamentally unsound. As he explains it, "So capitalism, yes, but we need to end our love affair with unrestrained tree-market capitalism, which has served humanity so poorly, and install a better regulated variety. What that variety would be depends on our goals, values and beliefs" (Ha-Joon Chang, 2012, p. 254).

This reprise then relates to Big Economy and to the three implications already discussed. It also relates to the question of which approach is optimal--the minimal (or incremental) or the fundamental approach. The minimal approach is exemplified by Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi (commissioned by President Nicolas Sarkozy), and the fundamental approach is illustrated by Georges Bataille. I would opt for all varieties.

Turn to the incremental character of the argument--somewhat parallel to Chang's--that former President of France Nicolas Sarkozy used in his preface to "Mis-measuring our lives: Why GDP doesn't add up" (Stiglitz, Sen & Fitoussi, 2010). He writes, "We will not change our behavior unless we change the ways we measure our economic performance ... A tremendous revolution awaits ... This revolution is inconceivable without deeply challenging the way we represent the consequences of what we undertake, the results of what we do ..." (Sarkozy, 2010, p. vii). The Commission that President Sarkozy established claims that it would help to upgrade public policy if a different G.D.P. Metric were adopted for measuring our economic lives. Twelve recommendations advocate a new or substitute metric. The Commission recommends better measures of economic performance, e. g., when evaluating material wellbeing, considering income and consumption rather than production. It also holds that well-being is multidimensional, and that objective and subjective dimensions of well-being are both important. One of its recommendations, for instance, is that quality of life indicators in all the dimensions (e.g. including people's health, education, personal activities and environmental conditions) should assess inequalities in a comprehensive way. The Commission notes that "what we measure shapes what we collectively strive to pursue--and what we pursue determines what we measure" (Stiglitz, Sen & Fitoussi, 2010, p. 6). We can hope that President Hollande can take up here approximately where former President Sarkozy left off.

Yet the range of societal and psychological impediments lie in our way, both in theoretical and in societal re-construction --in Chang and Sarkozy, as it were. Let us take only two such features as symbolic or representative First, consider magma as described by Cornelius Castoriadis in publications like World in Fragments: magma refers to society's creative framework or world of signification. He describes an "originary" institution of society's magma of social imaginary signification as shaping what can be constituted in that society. It is "the institution of society that determines which is 'real' and what is not, what is 'meaningful' and what is meaningless... Each society is a construction, a creation of a world, of its own world" (Castoriadis, 1997, p. 7). A striking example that he offers is that sorcery was "real in Salem three centuries ago, but it is not now ..." (Castoridis, 1997, p. 7).

Second, consider psychological compulsion described in such of Sigmund Freud's publications as Remembering, Repeating and Working Through (1914) and later in others like Beyond the Pleasure Principle (1920: 2010). It is an idea central elsewhere in psychoanalysis. One of Freud's descriptions is from child's play--of a child throwing a favorite toy from the crib, becoming upset by the loss, obtaining the toy back, and then throwing it away again. One of his understandings was that the child was dealing with the sensation of his mother going away. A point is that such repetition is not a pleasure; it is traumatic.

In Economics, such social imaginary signification and such a repetition compulsion may be the urge to return to the free market that obscures, or to the mathematics that confine, e. g., in the return after Keynes to free market fundamentalism, which also existed (see Thorne, 2010) in the neo-classical period before Keynes. Society's magma (its creative framework) and repetition compulsion makes it hard to turn to a radical re-writing of a General Economy theory independent of economics-as-it-is.

See Georges Bataille's re-writing in The Accursed Share (1967;1988), for example. It is an example of seeking fundamental change in economics.

He writes of the extension of economic growth as requiring "the overturning of economic principles" (Bataille, p. 25); he seeks a Copernican transformation, a reversal of thinking, as he speaks of concepts like an excess of energy. Michel Foucault would approve such a fundamental move because it is independent of polemics. As he (Foucault et al, 1998, pp. 111-112) asks, has "anyone ever seen a new idea come out of a polemic?" And he might see, for instance, Sarkozy's G.D.P. proposal--which we might suppose to be an institutional or pragmatic proposal or (in Foucault's terms) a theatrical adjustment. Any danger of radical overturning of theory like Bataille's will encounter social magma and repetition compulsion

Turn to another example. In his Econ-Art: Divorcing Art from Science in Modern Economics, Rick Szostak (1999) is among those who have discussed the desirability of separating culture and science. There is much to be explored in this topic. For instance, consider Szostak's comment that painters "are often known by their brushstrokes, composers by their innovative use of various instruments, and novelists by their vocabulary or manipulation of grammar... The econ-artist too is observed to take great pride in their mastery of the tools of mathematics" (Szostek, 1999, p. 75). On the same page, Szostek quotes John von Neumann as saying that "at a great distance from its empirical source, or after much 'abstract' inbreeding, a mathematical subject is in danger of inbreeding." But the repetition compulsion could be taking the form of the mastery of the tools of mathematics in economics.

Social magma and repetition compulsion, surely, occurs in all disciplines and people. It might occur in Public Administration in the urge toward short-term practicality. The odds are that the Public Administration culture will favor Stiglitz (Sarkozy) over Chang, and Chang over Bataille. Even Aristotle favored writing about the soon-to-be-out-of-date polis, rather than to the kind of political entity run by his pupil Alexander. The social magma and repetition compulsion can be identified in the centrality in the Public Administration story of efficiency (with a premium of being in the box), as opposed to the peripheral role of the imaginative (with its premium of being out of the box). For the society in which many of us live, social magma and compulsion might include a yearning for looking back to the 18th century--when the glories of the Founding Fathers were enjoyed and when the economic was not as pronounced as it is now in "Market Uber Alles" (Chomsky, 1999, p. 11) or in "Supercapitalism" (Reich, 2007).

Yes, of course, we should try our best to achieve long-term upgrading of economic theory and understanding of the Big Economy. But, are we not liable to do better if we acknowledge our difficulties and prejudices? It is hard to challenge the great economist Marshall when we read that he wrote "Burn the Mathematics!" It is even harder actually to light the match and to burn the mathematics


Economist theorists should become even more familiar with the fact that the emphasis on methodological rigor denies the world many understandings about the workings of the market economy that could be useful. They should embrace more centrally hermeneutic approaches that deepen understanding, especially about Big Economy. They should be more open to non-economists. Above all, they should "Burn the Mathematics!"

Non-economists like Macro Public Administration theorists and other with an interest in understanding the "big picture" should turn even more to analyze whether economic theory is right about governmentality--and to reframe the focus of analysis toward Big Economy, including market fundamentalism. They should contribute more to the supply of economic theory, and especially to the foundations of economic theorizing. They should recognize that other hermeneutic tools for contributing to the supply of economics may well be identified by public administration macro theorists (and others). The non-economists may do so, especially if they are willing to learn from the experience of the economic discipline, identifying how (say) economic theory has structures and patterns of thought that are parallel to problematic conceptual practices within their own disciplines. Mainstream economic theory is no more relevant to governance theory (and to macro public administration) than governance theory (and macro public administration) is relevant to economics.


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Virginia Commonwealth University


(1.) Thanks for ideas and items to the Public Administration Theory Network on the paper with this title presented at the annual conference, May 2012.

And to the e-book chapter on "Social Science as a Complex and Pluri-Disciplinary System: Economics as Example," pp. 105-120. Asuncion Lopez-Varela (Ed. Social sciences and cultural studies: Issues of language, public opion, education and welfare. Rijeka, Croatia: InTech.

And to To Kill the King: Post-traditional Governance and Bureaucracy, Armonk, New York: M.E. Sharpe.

And to students, Nathan Bickett and Marta Squadrito.

And to the external reviewers.
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