In a recent article for The New York Times Magazine, Paul Krugman asked: “How did economists get it so wrong?”
A good part of the Nobel prizewinner’s own answer consisted of pointing out how complacent economists and their discipline had become in recent years. All major questions seemed to have been solved and all major disagreements and disputes settled – at just about the same time as dark storm clouds began to appear over Wall Street.
For readers who want to know the whole story, there is now a study available that tells us how the logic of the discipline has evolved. Marion Fourcade, associate professor of sociology at the University of California, Berkeley, has provided us with a highly readable historical and sociological account of the professional development of economists in three countries.
Each nation, Fourcade argues, has developed its own professional culture with its own distinct institutional logic and actors. Whereas the US is marked by a unique federal structure in which relationships with the state are noticeably distant thanks to the historically strong autonomous position of universities and departments, France and the UK function differently. In France, we encounter less the professionalised, PhD-equipped, science-oriented scholar who has come to symbolise the US, but rather a somewhat statist culture whose professional product is the public administrator, trained and educated at one of France’s institutions that cater to the public education monopoly – such as the École Nationale d’Administration – or the grands corps de l’État.
In Britain, a different type emerged: the genteel and elitist scholar who is the outcome of interaction between Oxbridge elites (not necessarily trained economists, as the example of Keynes shows) and the almost exclusively London-based institutional infrastructure in the form of the Civil Service, the Government (until recently also including the Bank of England) and the major banks in the city.
In all three cases the professional training in, and the link with, higher education is different and reveals national cultural trajectories. It is this particular training environment and its cultural traits that one needs to understand first in order to make sense of the later performance and the different forms of economists’ public engagement.
Fourcade is well aware that there have also been signs of convergence among the three cultures, not least because they all face the same challenges of increased international connections, transaction and communication. However, she also knows that path dependencies allow for different answers to these challenges, thus framing particular national practices. In other words, despite all the talk about globalisation, each country wants to find economic solutions that suit its historical paths and conditions. She also points out that some players are bigger than others. The US – because of its size, its pool of talent drawn from around the world, its training and its scientific and academic standards – will remain powerful and influential.
It is unfortunate that Fourcade’s account takes us only to the 1990s; we thus miss out on an institutional explanation of the most recent dramatic events. But even with the past 20 years missing, she has given us plenty of hints that can help us to understand the intellectual trajectories and ideas of some of the main actors who played and continue to play a major role in the current crisis. Indeed, she has given us the comprehensive account that economists and even sophisticated minds such as Krugman have been unable to provide. Regrettably there is no Nobel Prize in sociology. This book would have been a candidate for it.
Economists and Societies: Discipline and Profession in the United States, Britain, and France, 1890s to 1990s
By Marion Fourcade
Princeton University Press
Published 8 April 2009