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The Economist as Policy Wonk
Michael A. Bernstein. A Perilous Progress: Economists and Public Purpose in Twentieth-Century America. (Princeton: Princeton University Press, 2002. 358 pages. $39.50.)
W. Carl Biven. Jimmy Carter's Economy: Policy in an Age of Limits. (Chapel Hill: University of North Carolina Press, 2002. xiv + 346 pages. $45.00.)
To paraphrase the late George Stigler, economists have their glories, but policy advice is not one of them. Stigler's point, driven home in the series of lectures and articles collected in The Economist as Preacher and Other Essays (University of Chicago Press, 1982), is that the economic policy choices of democratic governments are shaped primarily, not by the recommendations policymakers solicit from economic experts, but rather by the constellation of powerful political pressures interest groups bring to bear on the public policy process. As such, economic policy advice, whether it is right or whether it is wrong, will be implemented only to the extent that it advances the career aspirations of the politicians and public officials to whom it is offered. The predictable result in a geographically based representative democracy is a set of public policies that subvert economic efficiency in pursuit of the votes of politically well-organized constituencies demanding protection from competitive market forces. Agricultural price supports, minimum wages, tariffs and quotas, the law prohibiting price discrimination (Clayton Act § 2), and the regulation of prices and conditions of entry into so-called natural monopolies, such as banking, cable television, and surface transportation, are only a few of the many policies and programs [End Page 349] that have been adopted (and many of which persist) despite social costs far outweighing their narrowly tailored benefits, and despite principled opposition to them by large numbers of professional economists.
The twentieth century, distinguished by unprecedented growth both in the size and the scope of government around much of the globe, offers a sumptuous feast for the student of economic policy history. For the United States, the banquet includes two world wars, the Great Depression, the Keynesian revolution, the Kennedy tax cuts, Vietnam and the Great Society, the "stagflation" of the 1970s, Reaganomics, the emergence of persistent federal budget deficits, and Bill Clinton's proclamation that "the era of big government is over."
In A Perilous Progress, Michael Bernstein, professor of history and associated member of the economics faculty at the University of California, San Diego, examines the roles played by economists in these events in 194 pages (notes and other end matter comprise the remainder of the book). As a matter of fact, Bernstein's review of twentieth-century policy history and economic policy analysis fills fewer pages than that: following an introductory essay entitled "Professional Expertise as a Historical Problem," the first chapter of A Perilous Progress (15-39) focuses primarily on the formation and early development of the American Economic Association. That discussion underscores the tension between two opposing camps, one of which, led by the AEA's founder, Richard T. Ely, "desired to make [it] a propagandist party leading a reaction against . . . laissez faire doctrines" (17). Concluding that partisanship would compromise the profession's intellectual independence and perceived objectivity, the other camp wanted the Association to "be kept a purely scientific body" (ibid.). Chapter 1 also discusses internal controversies over the AEA's membership roster and the content of its new journal, the American Economic Review, ultimately resolved in favor of those wanting to cater to a credentialed, professional, primarily academic audience, at the expense of others supporting an Association that would be more practically relevant, thereby increasing its appeal to a broader membership and readership.
Likewise rejected in the "pursuit of a wholly professional image for the field of economics" were proposals to admit "a 'women's sphere' of analytical concerns to the science" (26). Applying early-twenty-first-century sensitivities to an early-twentieth-century decision to exclude women from "a discipline the very name of which [End Page 350] was derived from the Greek word for household management" (ibid.), Bernstein...