Visualizing the Economy

Arjo Klamer Visualizing the Economy VISIONS WHEN ROBERT HEILBRONER WRITES ABOUT THE VISION OF ECONOMISTS, he him self appears to be a visionary (Heilbroner, 1956; Heilbroner and Milberg, 1995). It is as if he sees something that others do not. Economists usually do not speak of their vision. Which economist would step forward to state: “I have a vision”? Economists are expected to formulate models, conduct statistical tests, and state their results. It is yeoman’s work they do; not the stuff of visionaries. Even so, Heilbroner insists there is vision beneath that work too. If we presume he is right, then we must ask: Exactly what is a vision? How do we recognize it? And in what way does it matter? The first source to go to for an answer is Schumpeter’s The History of Economic Analysis (1972 [1954]). Economic theorizing begins with a vision, Schumpeter tells us. He speaks of a pre-analytic act. “Obviously, in order to be able to posit to ourselves any problems at all, we should first have to visualize a distinct set of coherent phenomena as a worth­ while object of our analytic effort” (41). How this is possible is not quite clear, especially if the researcher works “from scratch,” as Schumpeter presumes. No researcher starts with a blank mind. Each one of us approaches a line of research loaded with our own concepts and meth­ ods, as well as the work of others. But Schumpeter is not interested in making a deep epistemological point. Being the historian, he is concerned with revolutions in economic analysis. He attributes such revolutions (my term, not his) to the intervention of a vision: “[Vision] may re-enter the history of every established science each time some­ body teaches us to see things in a light of which the source is not to be social research Vol 71 : No 2 : Summer 2 0 0 4 251 found in the facts, methods, and results of the preexisting science” (41). It is as if at some point in time, while economists are doing their thing, an economist steps up and states: “I have a vision” and proceeds to show how this vision propels a change in economic analysis. We would now say, with Thomas Kuhn, that such a visionaiy intervention can bring about paradigmatic change in economics. Schumpeter’s entre­ preneur comes to mind. Like the entrepreneur, the visionaiy econo­ mist has a creative insight that interrupts the routines and initiates a new research program. The important point is that the development of economic analysis is more than a logical progression of ever more truth­ ful models. It rather shows leaps and bounds that are not accounted for in strictly logical terms. The historian Schumpeter needs the visionary and his vision to account for what happens in economics as a science, just as he needs the visionaiy entrepreneur to account for the dynamics of capitalism. Schum peter’s exam ple is the intervention by John Maynard Keynes. The way he imagines it is that Keynes already had his novel vision in The Economic Consequences ofthe Peace (1919); Keynes already saw the psychological tendencies that underlie economic processes. But he did not yet incorporate them in a full-fledged economic analysis. Later, in The General Theory ofEmployment, Interest and Money (1936) he would give these psychological tendencies an analytic expression in the form of the marginal propensity to consume, liquidity preference, and the marginal efficiency of capital. What followed is histoiy—for the history of economic thought, that is. A vision is not arbitrary in Schumpeter’s view. It does not come about “just like that.” Schumpeter alludes to the possibility that an ideology biases the vision of a researcher. He speaks of a habit of ratio­ nalization that makes us see things more as we like to see them than as they are (Schumpeter, 1972: 35). He distinguishes in Keynes’s vision the characteristics of “an English intellectual” facing “England’s declin­ ing capitalism ” (42). Preceding Keynes, Jevons, Walras, Menger, and Marshall had visualized “their economic world” as “a world of numer­ ous independent firm s” (892). We may add that they have presented 252 social research the...