{"id":156,"date":"2017-07-06T12:38:29","date_gmt":"2017-07-06T17:38:29","guid":{"rendered":"https:\/\/sites.bu.edu\/perry\/?p=156"},"modified":"2019-03-25T15:30:28","modified_gmt":"2019-03-25T19:30:28","slug":"the-making-of-a-public-economist","status":"publish","type":"post","link":"https:\/\/sites.bu.edu\/perry\/2017\/07\/06\/the-making-of-a-public-economist\/","title":{"rendered":"The Making of a Public Economist"},"content":{"rendered":"

Walter Lippman (1889-1974) is usually remembered, if at all, as a journalist and political commentator, and certainly not as an economist.\u00a0 But that is exactly how we should understand him, so argues Craufurd Goodwin<\/a>, in his last book Walter Lippman, Public Economist<\/a>.\u00a0 The reason we don\u2019t see him as an economist is that our understanding of what it means to be an economist has changed so much, indeed narrowed so much, from what it was in the pre-WWII context of Lippman\u2019s mature work.<\/p>\n

Seen in context, Lippman appears like an American version of the British John Maynard Keynes, whom Lippman first met at the 1919 Versailles peace conference and with whom he maintained a warm friendship thereafter.\u00a0 \u201cDespite their later engagement with economics, neither was attracted to the subject at first.\u00a0 Their initial interests were in philosophy, literature, and the arts.\u00a0 They took little economics as undergraduates and found the prospect of postgraduate study and a full-time career in academe unappealing.\u00a0 They both wanted to act on a wider stage and to speak to a larger audience with a longer list of topics than they could envisage at even one of the best universities.\u201d (48)\u00a0 \u201cThe life that appealed most to Lippman was that of his British Fabian friends, a life that combined serious scholarly endeavor with civic engagement, public education, politics at a distance, and to some degree with creative literature and the arts.\u00a0 The best way to achieve this life in America, he concluded, was as a newspaper columnist.\u201d (75)<\/p>\n

From this perspective, Lippman\u2019s column \u201cToday and Tomorrow\u201d, published initially three and then two times a week from 1931-1949, offers a real time record of one man\u2019s effort to make sense of the economic turmoil of those years of Depression and then War.\u00a0 And his 1934 book The Method of Freedom<\/em> stands as an American analogue to Keynes 1936 General Theory of Employment, Interest and Money<\/em>, pointing the way to a new economic model\u2014\u201cfree collectivism\u201d or \u201ca compensated free market\u201d\u2014and a regenerated form of political liberalism.\u00a0 \u00a0Lippman:\u00a0 \u201cIt is collectivist because it acknowledges the obligation of the state for the standard of life and the operation of the economic order as a whole.\u00a0 It is free because it preserves within very wide limits the liberty of private transactions.\u00a0 Its object is not to direct private enterprise and choice according to an official plan but to put them and keep them in a working equilibrium.\u00a0 Its method is to redress the balance of private actions by compensating public actions.\u00a0 The system of free collectivism originates not in military necessity but in an effort to correct the abuses and overcome the disorders of capitalism\u201d (138).<\/p>\n

But Lippman goes even further than Keynes, according to Goodwin.\u00a0 As a journalist, he had already developed a sophisticated sense of mass psychology (in effect a theory of Keynes\u2019 \u201canimal spirits\u201d).\u00a0 Lippman again:\u00a0 \u201cImitation, the herd instinct, the contagion of numbers, fashions, moods, rather than a truly enlightened self-interest, have tended to govern the economy.\u00a0 The submerging of individualism in mass behavior is a consequence of the increasing complexity of the economic order\u2026It follows that if individuals are to continue to decide when they will buy and sell, spend and save, borrow and lend, expand and contract their enterprises, some kind of compensatory mechanism to redress their liability to error must be set up by public authority.\u201d (139)<\/p>\n

Roosevelt\u2019s New Deal was very much behind the curve in this respect, at least during the first years which were dominated by the National Recovery Act.\u00a0 Lippman 1936:\u00a0 \u201cWe cannot subscribe to the view of those New Dealers who claim that their experiments in monopoly, restriction, and centralized political power are in the interests of the abundant life.\u00a0 We believe that the New Era and the New Deal are two streams from the same source.\u00a0 The one fostered private monopoly in the name of national prosperity.\u00a0 The other has fostered state-controlled monopolies in the name of national welfare.\u00a0 We believe that both are an aberration\u2026\u201d (375).\u00a0 \u00a0Only in 1938, with the Temporary National Economic Committee, did the New Deal begin seriously to engage the macroeconomic dimension of the problem, and shortly thereafter that initial engagement was overwhelmed by war preparations.<\/p>\n

The picture Goodwin paints of the Keynesian revolution in economic policy thus downplays the role of academia\u2014the usual story that Galbraith, for example, tells of Keynes coming to America through Harvard\u2014and instead emphasizes the role of Lippman, as public intellectual and indeed public economist, but most importantly as best selling author whose columns reached an audience of eight million.\u00a0 The Keynesian revolution in America was first a revolution in public consciousness, with academia and policy circles following after.\u00a0 \u201cThere were those who criticized Roosevelt for creating a Brain Trust and encouraging creative thinking in government.\u00a0 Lippmann was not among them.\u00a0 His complaint was that members of this Brain Trust did not have enough brains.\u201d (312)<\/p>\n

Inadequate economic education was part of the problem.\u00a0 One of the most fascinating chapters in the book recounts Lippman\u2019s efforts, as chair of the economics visiting committee, to reform teaching of economics at Harvard, his alma mater (56-73).\u00a0 The other part of the problem was ensuring that government service was open to the best and brightest.\u00a0 Lippman:\u00a0 \u201cThe cult of mediocrity, which is a form of inverted snobbery, is not democracy.\u201d (313)\u00a0\u00a0 What we need, according to Lippman, is a kind of Council of Economic Advisors\u2014here arguably is the origin of the Council we actually got as part of the postwar 1946 Employment Act.<\/p>\n

But what kind of economics do we need?\u00a0 \u201cHe worried that the methods of the engineer, seemingly creeping into economics, were dangerous in constructing public policy\u2026A continuing problem was the large number of well-meaning and enterprising bureaucrats, such as Roosevelt\u2019s Brain Trust, who kept on generating ill-thought-out schemes supposedly to improve the economy and who used the excuse of the depression to put them in place.\u00a0 Since these schemes were the bureaucrats\u2019 babies, they found for them tenaciously.\u201d (229-230)\u00a0 \u201cHe regretted especially the isolation of economics from political science, history, psychology, and philosophy; the result had been that those trained in economics paid so little attention to values and to the determinants of human motivation that they were ill-equipped to deal with the real world.\u201d (253)<\/p>\n

Writing at a time when the Great Depression led many to embrace totalitarian alternatives to the market system, Lippman imagined an alternative future and urged it on his readers.\u00a0 Today, our own Great Recession challenges us similarly, not only as economists but also as citizens.\u00a0 Today, as then, \u201cmoderate, sensible, public-spirited behavior seem[s] absent everywhere.\u201d (224)\u00a0 For us, Lippman provides a model of what nevertheless can be done, doggedly writing his columns in an effort to shift public opinion in the direction of the rule of reason, even in the darkest days.<\/p>\n","protected":false},"excerpt":{"rendered":"

Walter Lippman (1889-1974) is usually remembered, if at all, as a journalist and political commentator, and certainly not as an economist.\u00a0 But that is exactly how we should understand him, so argues Craufurd Goodwin, in his last book Walter Lippman, Public Economist.\u00a0 The reason we don\u2019t see him as an economist is that our understanding […]<\/p>\n","protected":false},"author":15789,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[43],"_links":{"self":[{"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/posts\/156"}],"collection":[{"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/users\/15789"}],"replies":[{"embeddable":true,"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/comments?post=156"}],"version-history":[{"count":3,"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/posts\/156\/revisions"}],"predecessor-version":[{"id":354,"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/posts\/156\/revisions\/354"}],"wp:attachment":[{"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/media?parent=156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/categories?post=156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sites.bu.edu\/perry\/wp-json\/wp\/v2\/tags?post=156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}