The Weather-Vane Profession
Llewellyn H. Rockwell, Jr.
economics profession has made a sharp turn to the Left as was evident
at the last meeting of the American Economic Association. Gone was
any praise of tax cuts and private property, or criticism of federal
spending and regulation. Instead, there were reassertions of Keynesian
falsehoods, mathematical treatises with no economic content whatsoever,
and an attempted (and mistaken) extension of economics into sex
Left turn took place, as it has in the past, because most economists
are lapdogs of the state. Paid directly or indirectly by government,
they seek their advancement through government, consider government
jobs to be the pinnacle of their profession, and are ever attentive
to their master's voice.
Reagan was in the White House, supply-sideism was in vogue. If most
economists didn't become disciples of Arthur Laffer, Jude Wanniski,
and George Gilder, they were at least interested in incentives.
The less-statist Rational Expectations and Monetarist schools also
however, with Bush's neo-Keynesians in control of national policy,
academic after academic defends government spending and deficits,
and attacks tax cuts and "market failure." Few write about privatization
are buttressed in their attitudes by the national media, which are
also pro- government. Any economist who wants to be "fit to print"
had better stay in step with the zeitgeist.
that this is anything new. Contrary to myth, Franklin D. Roosevelt
did not embark on his statist New Deal because of Keynesian economics.
Theory wasn't published until 1936, when the New Deal was
already three years old. (Mussolini's program was FDR's actual prototype.)
was it a coincidence that the model that came to dominate the profession
was the policy of nearly every industrial power (including Nazi
Germany, whose economics Keynes praised in his introduction to the
German edition of the General Theory).
until Western governments began to run deficits as a matter of course
did economists discover the benefits of red ink, most economists
were not in favor of central bank manipulation of the economy until
the Federal Reserve was established; and there was no profession-wide
consensus on the virtue of redistribution until the income tax amendment.
to the Left are made easier these days by mainstream analytical
models, which are radically unsound. For starters, they bypass questions
of private property, legal institutions, and differences among people.
For this reason, the popular schools of the eighties were not solidly
free market. While they improved the old Keynesian aggregations,
none Supply-Side, Rational Expectations, nor Monetarist challenged
the Keynesian framework.
No Keynesian model allows economists to question the notion of government
management, or that it can improve on the free market by making
business more competitive, wages more flexible, prices more responsive,
and money flows more rational. This is part of the reason that economists
of almost all stripes have continued to dance to the Keynesian tune,
changing only partners.
is only one school of economic thought that refuses to dance: the
Austrian. We want to fire the conductor, break the instruments,
tear up the sheet music, and lock the ballroom.
the Austrian School is based on economic law, on real human beings
acting in a world of scarcity, and on the natural order of liberty.
That is why we know, and can demonstrate, that government intervention
must always damage the market.
Carl Menger's day to our own, Austrian School economists have condemned
the errors of government, no matter what the politicians wanted,
no matter what the risk to careers.
remain a minority in the profession (the courageous are always a
minority), but a bigger minority than at any time since the 1930s;
we have an astounding number of good professors and students. But
meanwhile, the welfare state grows. What to do?
cannot rely on politicians, although we should try to elect the
rare good one. Most economists are useless as well. That is why
we need the public, guided by the right intellectuals. As Ludwig
von Mises pointed out, economics is far too important to leave to
the economists. Everyone should know at least the basics.
the 2nd annual meeting of the John Randolph Club in January, Club
President Murray N. Rothbard laid out a strategy for involving the
public. Certainly the inchoate sentiments already exist. Who doesn't
despise bureaucrats and politicians? What normal American really
thinks they should run our families, regulate our businesses, and
spend our incomes?
Americans are angry and resentful at the present state of affairs,
and who can blame them? What other emotions should we feel as society,
subverted by socialist egalitarianism, collapses around us? It is
our job to point out the villains: state managers and their pet
welfare recipients: underclass, foreign, and corporate.
of trying to persuade the politicians of some marginal scheme, we
need to show the public how the trillions extracted from their wallets
are spent, and on whom. Once done and it is no small task we
could begin an authentic revolution against Washington D.C. Then
we need not worry about the economics profession. It will be following