Peter Radford on Neoclassical Economics and Ideology

This is one of the best couple of paragraphs I've read on economics (and, indeed, ideology) in a while:

In the very long run there is no doubt, or ought not to be, that a decentralized economy produces better results than a centralized one. It can adapt better. It can innovate better. And it can thus grow better. What it cannot do, necessarily, is to allocate better. Yet, and this is the truly pernicious nature of modern orthodox economics, it is precisely it allocative power that modern theory lauds.  

Why is this? 

If you are trying to build an ideological defense of a particular worldview – in this case that markets ought to be left alone to get on with it – it is prudent to defend its weakest points mostly actively. This is the brilliance of neoclassical economics. Its entire edifice is built around ideas that make it appear as if markets will always outperform alternatives in the allocation of society’s resources. It does this by inventing and deploying specialized uses for common concepts like “efficiency”, and then restricting the set of assumptions used in the theory to ensure that it achieves its goals. Outside of academia most people don’t realize the extraordinary effort needed to distort the real world into conformance with neoclassical theory, they simply accept that, somehow, economists have “proved” the superiority of markets. They accept economics as being a sort of science, and that it has intellectual sincerity or objectivity.

Spot on.  The neoclassical economy's biggest weakness is the allocation of resources.  It turns that into its biggest strength by defining 'allocation' in a way completely contrary to how it should be defined.  Thus its own weakness becomes unthinkable in its own terms.

Philip Mirowski has made similar points and in this quite brilliant lecture he argues that neoliberals too (he distinguishes them from neoclassicals quite radically) are far more smarter than the left often give them credit for.  Their incoherences are an assemblage of great power.

Diplomacy and Ethnopsychiatry

Latour mentions the ethnopsychiatrist Tobie Nathan in AIME and also in his book Iconoclash. Here’s a section from a very interesting article by Nathan On Ethnopsychiatry:

[…] the traditional drama of a therapeutic session involves a patient and an expert: the former is an expert of his own affliction, the latter, an expert in Illness. The purpose of the dialogue is to bring the subject to realize that the expert is right, and that he, as patient, understands very little of what is happening within his own mind and body. The admission of a third person into this otherwise standard battle scene changes the interaction so that the dialogue no longer serves to establish which is of the two is right, but rather to find common ground. 

An example of this might be found in the case of an African immigrant, a Manjak man from Casamance, living in France. The patient, who claimed to be the ninth of 14 sons, had mourned the death of his eight older brothers, and was worried that he would be the next to die. “My eight brothers are gone,” he explained, “because my father sold all of his sons to a sorcerer in exchange for wealth and power.” A therapist, alone with the patient, would be inclined to think that this was what the patient literally believed, or that fear and anxiety were putting words in his mouth. The therapist might decide to focus on the patient’s latent aggressiveness towards his father, or delve into his past in other ways, merely as a result of dealing one on one with his patient’s words. On the other hand, the expert might choose to introduce a translator, another Manjak from the same region as his patient, to mediate between them. When asked to interpret, this third person (for this approach was indeed applied), answered that it was common in his home country, not to sell one’s sons, but to use this expression. In other words, the patient was speaking realistically, acceptably, but with the words of his own culture, which to a foreigner might sound delusional. It is irrelevant, at this point, whether the interpreter understands the patient’s past or his particular use of the expression; simply by intervening, this “mediator” enlarges the parameters of what is normal, thus introducing a dimension of the Possible where the cultures of patient and therapist overlap. His presence makes a peaceful agreement possible, when it might be said that psychotherapy is a form of conflict. In the war of psychotherapy, both parties oppose one another in order to prove which of the two is right. Translation, on the other hand, is peace, because it seeks means of sharing a world, or a common ground of language.

The resonance with Latour’s 'diplomacy' project is obvious. The whole thing is well worth reading.  It makes the whole fetishism/iconoclash thing make a lot more sense.