Ohlin
luxemburg
Einaudi
Wicksteed
Menger, C.
Newcomb
George, Henry
Hotelling
Juglar
Carey
Veblen
Schumpeter
cannan
Carlyle
Hobson
Cairnes
Chamberlin
Moore
Schwartz, Anna
Spiethoff
Leontieff
Proudhon
Sen
Thünen, Johann Heinrich von
Hilferding
J. S. Mill

Honorary member's speeches


After Dinner Speech at the 2001 ESHET conference in Darmstadt by Eric Streissler

NOT NEOCLASSICAL, OH NO! OR: A FIGHT AGAINST REAL STRAW MEN

Mr. President! Mr. Chairman of the Council! Ladies and Gentleman of the Council and of all Commissions and Committees of the Society! Honourable Gentlemen Organizers of this Splendid Conference! And Every Body Else!
I here stand condemned before you, condemned to deliver a dinner speech. To my knowledge, next to going into action in a real war the most dangerous thing in this world is to have to go into action as a dinner speaker. A dinner speech is always either too insipid or too heavy, either too long or too short, either too scholarly or too untaught, either too dull or too light-hearted; and most likely all of that at the same time to different members of the audience.
I shall always remember the story of a charming Israeli friend of mine, Mr. Mundlak to be exact (for in this society you always have to give your sources, unless, of course, you have too obviously made the whole thing up yourself). The story runs: In the good old days when the really juicy things were still happening at the Collosseum in Rome, in the days of classical Roman gore and glory that is, a slave from Judea was thrown to the lions. More precisely he was earmarked as the public dinner of one lion. The lion bounced out of his den, roared mightily and pranced towards the Judean slave in a purposeful manner. But he paused when he saw that slave – quietly and politely approaching him in his turn. The Judean slave came up to the lion, bent down and whispered something into the lion’s ear. The lion stared in astonishment, shuddered, shook his head as if thinking of something very disgusting and immediately retired once more to his den without having tasted even the smallest morsel of our slave. As the lion had refused to eat him the slave from Judea was free. Everybody inquired how he had cast a spell over the lion and what he had actually whispered into his ear. “Easy” said the slave, “I just reminded him: After dinner there will be speeches!”
I remember the daunting experience of being dinner speaker at one of our professional congresses once before.
At the yearly meeting of the Verein fŸr Socialpolitik in Augsburg in 1980 I was asked on the spur of the moment to deliver the speech. More exactly, it was called in German, in its literal translation, a ladies’ speech, for you must know to the German mind ladies seem to go particularly well with dinner and, possibly, only well with dinner.
This dinner or ladies’ speech was awarded a signal honour: it was the once and only such speech ever to be published in the proceedings of the conference. But perhaps more apropos: It was also the last such speech ever to be given to the Verein fŸr Socialpolitik. This made me rather suspicious: A Dinner Speech seems to be intimidating. It might even be thought to be a way of making enemies. However, things might be of a different cast, in this society: Here, enemies might, by some, even be thought to be an asset. For this society is, after all, a society for posthumous fame. And it is a well-known fact of life that those scholars, who were your worst enemies, while you were alive, not infrequently turn, possibly by a kind of artful remorse, into your very best friends once you are dead. So, possibly, optimizing the number of your enemies while alive might in this society be a round about way of maximising the number of your friends, when dead. For as far as I gather in this dead serious society you only count once you are dead. You well know, our secret motto is: Only a dead scholar – is a good scholar.
Now I actually started out to give a talk on how not to be neoclassical, oh how ghastly to be neoclassical, oh no!
And there I go using such horrible notions as optimising living enemies and maximizing friends when dead and that by roundabout means of production, that idea of the arch neoclassicist BOEHM-BAWERK. So in order to present my credentials I have to tell you that twenty five years ago, at a time when I was actually seriously ill, I gave a talk at a workshop of the IEA. And then sitting a little later around the corner and out of sight in an adjoining room connected to another by large open doors, two participants came into that other room and started to discuss – me, of all people, always an eye – opening experience. The first chap sad that he found me good and promising and, especially, that he found my talk so very non-neoclassical.
So you see, once upon a time in my rash youth and when I was seriously ill, I have been thought to be non-neoclassical by some one. To which the other scholar, a very wellknown American, who thinks himself the originator of what he calls a New-Keynesian Paradigm, confessed that he did not think very much of me and that as to neoclassical thought or, that matter, non-neoclassical thought, he did not know what they were. That is how they are, these American New Keynesian chaps: they rub salt into your wounds by stating they do not even know what neoclassical thought might be and they might even add the final insult, completely heretical in this society, of course, as I gather, and pontificate that there is only one mainstream economics after all.
So we have first to try to define what being nonneoclassical is. Let me start out once more from my basic theorem: In this society only a dead scholar can be considered a good scholar. But is this theorem also invertable or is its matrix singular? Is it also true that ALL dead scholars are good scholars? At least all dead scholars still more or less known to posterity? But then a daunting discovery awaits us: For if we take a head count of scholars mentioned in standard – or, should I say, “mainstream” – books on the History of Economic Thought, we find that a frighteningly large percentage could be classified as “neoclassical” or marginalist, at least classified so, as Mark BLAUG reminds us, by twentieth century standards, when these categories became established. So what shall we do if we seek for non-neoclassical purity?
Perhaps we might define abhorred neoclassicism by its opposite, by being similar in thought to known paragons of non-neoclassical ideas, RICARDO e. g., or KEYNES, or Adam SMITH (though with SMITH we have to be a little careful, for by now some have recognized in him the first important general equilibrium theorist!). So let us take RICARDO, e. g., and see how SCHUMPETER characterized him: “His interest was in the clear – cut result of direct.... significance.... He....piled one simplifying assumption
upon another until, having really settled everything by these assumptions, he set up simple one-way relations so that, in the end, the desired results emerged almost as tautologies....The habit of applying results of this character to the solution of problems we shall call the Ricardian Vice”.
So you see, that is the non-neoclassical method! We learn from SCHUMPTER that in order to be thoroughly non-neoclassical, we have to build very abstract models, “almost tautologies”, and jump to practical conclusions from them, cost it what may.
SCHUMPETER thus thinks RICARDO'S method a vice.
But in this respect I have to tread very carefully in this society; for there are in it those who seem rather to revere RICARDO, of course in a “neo” way. “I wish to defend poor David RICARDO”, I recently heard an eminent member passionately pronounce. So I immediately confess:
For any economist it is only too easy to prove the true worth of RICARDO. The fortune he had made by his
death invested merely in 3 percent British consols would amount by now to some one hundred million pounds
sterling! So if that is to be considered the absolute and legitimate poverty line for the wealth aspirations of members
of our society, there is still leeway for some before appearing to be unduly materialisic.
KEYNES, on the other hand, seems for once to have seen eye to eye with SCHUMPETER as to the worth of RICARDO: “The complete domination of Ricardo's approach for a period of one hundred years has been a disaster for the progress of economics”. To whom should we then turn, if we wish to follow KEYNES? To MARSHALL, of course. MARSHALL had been, according to
KEYNES, “the first great economist pur sang that there ever was”, pur sang being apparently French. So how bloodless do we look, not very much pur sang, when we do not agree with MARSHALL, the man who coined the term neoclassical?
Perhaps we should turn to the self-definition of certain prominent neoclassical authors and show that we are at least heartily against what they said. Of course, JEVONS, than whom none can be thought more neoclassical, had defined “economy as a Calculus of Pleasure and Pain”. Now that is evidently wrong, or at best a definition by of one of those horrid Victorians of well-known masochist tendencies. To one of normal inclinations there is no Pain in economics, doing economics is pure pleasure, at least as long as we are among like-minded friends and not disturbed by those nit-picking neoclassical types. MARSHALL put it already more mildly by saying economics was merely “the science of measurable motives”, with money as a measuring rod. That this is a very applicable definition KEYNES demonstrated already at the age five, proving himself to be the youngest Cambridge economist with real understanding. The child KEYNES after hearing the definition of those measurable motives, measured in terms of money, said: “I shall call my mother pounds, because I value her so much”. That is economic acumen and the right hierarchy of values for
you! This brings me to a somewhat oppositely expressed, but justly famous “mother theorem” of SCHUMPETER on Adam SMITH. SCHUMPETER says about SMITH: “A fact which I cannot help considering relevant, not for his pure economics of course, but all the more for his understanding of human nature – that no woman, excepting his mother, ever played a role in his existence”. So if you are male and want to be Smithian: take care to let no other woman apart from your mother play a role in your life; and if other women play a role in your life, then you are probably a closet neoclassicist.
In the perennial fight between ancients and moderns we in this society come out fore square for the ancients.
There are those moderns – reprehensible neoclassicals, most likely – who in their false optimism and politically suspect belief in progress think that the history of thought has to show how much better we are than our forebears. While we, true believers, are of the opposite persuasion and intend to imagine the past, the whole past and nothing but the past.
Very apologetically I once more turn to MARSHALL: “Economics is not a body of concrete truth but an engine for the discovery of concrete truth”. Coming from MARSHALL this is presumably said of neoclassical economics. So a non-neoclassicist can take comfort: Even Marshall said, neoclassical economics is not a body of truths.
But that does not preclude that perhaps any type of economics is a body for the DISCOVERY of truth – well, perhaps not very concrete truths and also in this changeable and relative world much more a body for deriving semi-truths or even quarter truths. And is the parlour game of declaring oneself decidedly non-neoclassical not a fight against straw men, though a fight against real
strew men, as I called it in my title? It is a fight against real straw men, because each of us can find in any other tradition of economics much that is, indeed, reprehensible and much more that is only historically specific. That is the real part of it. But it is a fight against straw men nevertheless: For each tradition is much richer than these reprehensible twists and inanities of thought. Each tradition has given something to the whole, something from which we can all learn. And is not, perhaps, this the message our society tries to announce?
So, I close with our toast: Let us now praise dead men. Sorry for the ladies: there are nearly only men among dead economists apart from the very occasionally, very militant woman. In fact, the question is: Can there even be dead ladies, as ladies are by definition eternally young? So I return to my toast: Let us now praise dead men! And let the best of them win! Or, to put it in more mercenary terms: Further research is necessary!


Professor Eric Streissler President-Elect, ESHET

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