Is a Little Economics a Dangerous Thing?

By Hayes, Christopher | In These Times, November 2006 | Go to article overview

Is a Little Economics a Dangerous Thing?


Hayes, Christopher, In These Times


THERE'S A CASE TO be made that the single most intellectually and politically influential neighborhood in the United States is Chicago's Hyde Park. Integrated, affluent and quiet, the 1.6 square-mile enclave on the city's south side is like a tiny company town, where the company happens to be the august, gothic, eminently serious University of Chicago. Students at the U. of C. sell T-shirts that read "Where Fun Goes To Die," and the same could be said of the neighborhood, which until very recently had a bookstore-to-bar ratio of 5:2.

But the university is probably best known for the school of economic thought it has produced. When the Chicago School first emerged in the '50s, its zealous support of free markets and critique of government intervention were considered reactionary and extreme. Among elites in economics and politics the consensus was, as John Maynard Keynes had argued, that capitalism could only function with regular and robust government management. Indeed, so total was this consensus that in 1971 Richard Nixon announced a plan to impose wage and price caps in order to curb inflation, declaring, "We are all Keynesians now." Just 25 years later, however, Bill Clinton, the first Democratic president to be re-elected since FDR, announced that the "era of big government is over." He might as well have said, "We are all Chicagoans now."

Neoclassical economics, as the Chicago School of thought is now called, has become an international elite consensus, one that provides the foundation for the entire global political economy. In the United States, young members of the middle and upper-middle class first learn its precepts in the academy. Polls routinely show that economists and the general public have widely divergent views on the economy, but among the well-educated that gap is far narrower. A 2001 study published in the U. of C.'s Journal of Law and Economics showed that those with college degrees are more likely to subscribe to the views of neoclassical economists than the general public. This isn't surprising. At elite colleges, economics is consistently one of the most popular majors (nearly a quarter of undergrads at the U. of C.), and across all schools, introductory economics, often a required course, has been one of the 10 most popular classes for the last 30 years. Graduate schools-from business to public policy to political science to, most notably, law-are now suffused with economic paradigms for understanding not only financial interactions but all human behavior.

Conservatives have long critiqued academia for the ways professors use their position to indoctrinate students with left-wing ideology, but the left has largely ignored the political impact of the way people learn economics, though its influence is likely far more profound. So in order to find out just what students learn when they learn economics, I headed down to Hyde Park, where the University generously let me enroll in "Principles of Macroeconomics" for a quarter.

ALLEN SANDERSON, 62, has been teaching the intro macro and micro courses at the university for the last 18 years and though he initially appears somewhat grave and understated, it is quickly apparent that he is a master of technique. His lectures skip along, propelled by a series of wry, contrarian quips, each punctuated with a visual rimshot: a slight pause and a thrust jaw. "When you hear, "The economics department at U. of C.,' one's free association is 'pro-business, greedy bastards,'" says Sanderson (pause, jaw thrust) in the first lecture. "I tend to think that's not the case. Greedy bastards we may be, but we're not pro-business. Republicans tend to be very pro-business. It's a genetic defect of Republicans. Democrats tend to be anti-business, another genetic defect. We are not anti-business; we are not probusiness. We are pro-choice in the ultimate sense of pro-market. Based on empirical work, macro and micro solutions are probably better worked out by private markets than government intervention. …

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