ASSA/AEA Protests; Repubs on Bain; Davidson

by Chris Sturr | January 13, 2012

Alan Greenspan--"I Was Wrong"

"I Was Wrong"

(1) ASSA/AEA Protests: I apologize for the delay posting–I was in Chicago for the annual meetings of the Allied Social Sciences Association, a/k/a the American Economic Association and its marginalized poor cousins.  My last post mentioned the protests that were planned. Here is an article I whipped out for the Boston Occupier (the print newspaper of Occupy Boston) on the protests, which were a blast:

Occupy the AEA!

The movement takes on free-market economists at their annual meetings in Chicago.

By Chris Sturr

In January 2009, as economists gathered in San Francisco for the annual meetings of the American Economic Association (AEA), the economy was in a shambles as a result of the financial crisis and recession. The crisis took mainstream economists by surprise, perhaps because of the free-market orthodoxy that pervades their discipline. The profession could hardly ignore the crisis; heretofore proponents of laissez-faire policies suddenly embraced fiscal stimulus and other government intervention in the economy. Former chairman of the Federal Reserve, Alan Greenspan, famously told a congressional committee that he was “shocked” that free-market models had turned out to be flawed. “I was wrong,” the “maestro” admitted.

But the 2009 meetings of the AEA showed a profession remarkably unperturbed by economic collapse. Patricia Cohen of the New York Times reported that conference attendees and the discipline as a whole appeared “unshaken” by the financial crisis. “Free market theory, mathematical models and hostility to government regulation still reign in most economics departments at colleges and universities around the country.” What would it take for the profession to change? Cohen quotes David Card, a labor economist at the University of California at Berkeley: “If unemployment is still high three years from now, then you might start to see a paradigm shift, Mr. Card said; economists will ‘have to say that the market isn’t supposed to work this way.’”

Three years hence, with unemployment still high, no paradigm change was in evidence at the 2012 AEA meetings, which were held in Chicago, ground zero of Milton Friedman’s Chicago School of free-market economics, January 6-8. But there was one key difference: now we have the Occupy movement.

A coalition of groups including Occupy Chicago, StandUp! Chicago, the Coalition Against Corporate Higher Education (CACHE), Jobs with Justice, the Chicago Political Economy Group (CPEG), and the Union for Radical Political Economists (URPE) staged a series of events and demonstrations targeting the AEA and its role in the economic crisis. From the flyer promoting the actions dubbed “Occupy the AEA”:

“The American Economic Association (AEA) has for years fostered a narrow, free-market orthodoxy in the economics profession. Mainstream economists of both parties move fluidly between academia and government, not only spinning out the most narrow-minded free-market theory, but attempting to construct the economy in the image of this theory. In so doing, they lend a helping hand to the interests of the 1%, providing a scientific aura for deregulation, low tax rates for the wealthy and corporations, slashing necessary programs and privatization. Tell the AEA: ‘The show’s over.’ The 99% are onto their machinations and manipulations. Call them out! Join labor, community, and ethical economists’ groups in two days of outrage, and challenge the AEA to serve the people, not the rich and powerful.”

An image on the flyer, created by Hope Asya of the Occupy Chicago Arts Committee, depicted Occupy as a hand holding a pin, pricking a bubble surrounding the AEA’s official seal. This image captured not only the role of free-market, deregulatory economics in creating speculative bubbles, but also the way in which mainstream economists operate in a bubble that insulates them from the real-world struggles of the 99%.

One example of that bubble: the AEA and the economics discipline as a whole, unlike most any other discipline, had no code of ethics. Other professions—from physicians to physicists, and from sociologists to statisticians—have codes requiring (among other things) disclosure of potential conflicts of interest, but economists have been free to sit on corporate boards while expounding on policy that affects those corporations. In the wake of the financial crisis, and with public attention directed toward the profession’s shabby ethical practices (most prominently in Charles Ferguson’s Academy Award-winning documentary Inside Job), more than 300 AEA members signed a petition asking the organization to adopt a code of ethics, which it did, finally, on the Thursday before this year’s convention.

Friday’s events began with political theater in which the “1% economists” were invited to have lunch with members of the 99%. Occupy activists set up a table and chairs on the corner of Michigan and Wacker Avenues, outside the main conference hotel, the Hyatt Regency, and served “RAHMen noodles,” in mock tribute to Chicago’s new mayor, Rahm Emmanuel. Sitting at the table to represent the 99% were Lourdes Guerrero, a laid-off art teacher, and 85-year-old activist Ruth Long, who spoke about how cuts in education and social services have affected them. Simultaneously, members of Occupy Chicago dropped a banner from a bridge over the Chicago River with the famed Wrigley Building in the background. The banner depicted an AEA economist, looking like the rich guy from Monopoly, urinating on the 99%, under the title “Trickledown Economics.”

After the luncheon, activists marched down Michigan Avenue by Millennium Park and Grant Park with radical economists from URPE and CPEG, and an escort of Chicago Police Department officers riding bicycles. The small band of marchers was undeterred by the arrest of one of the main organizers of the protests from Occupy Chicago, whose only offense seems to have been insufficient deference to the police. After spending a few hours in jail, he was cited for “failure to obey an order to disperse,” an order which none of the participants in the march seem to have heard.
There were also “The People’s Economic Conference”—two days of teach-ins at Roosevelt University led by radical economists, including Nancy Folbre of UMass-Amherst, Chris Tilly of UCLA, Stephen Marglin of Harvard (who teaches the heterodox alternative to Greg Mankiw’s introductory economics course), George DeMartino of the University of Denver, and Steve Zarlenga of the American Monetary Institute. “I was excited to learn about URPE and that there are economists who are critical to the failed economic, academic theories of Milton Friedman and Alan Greenspan,” said Marty Donakowski, a graduate student and member of CACHE. “It is inspiring and elating that there are active economic theorists who advocate on behalf of the common good, especially in the face of the current recession.”

On Saturday, CACHE held a mock award ceremony for the economists most responsible for the financial crisis and recession. For the record: the BP Toxic Waste of Space Award went to Larry Summers of Harvard and to the Obama Administration; the Martha Stewart Award for Most Conflicted Economist went to Columbia Business School’s R. Glenn Hubbard; while the Glenn Beck Award for Excellence in Indoctrination and Propaganda went Harvard University’s N. Gregory Mankiw. (In early November, 70 of Mankiw’s students—some of them Occupy Harvard activists—protested his teaching in their own way, by staging a walkout from his introductory economics lecture; see “Walking Out On Mainstream Economics,” Boston Occupier Issue 3.)
The CACHE demonstration also focused on problems in economics education. CACHE activist Ben Schacht explained why he joined the protests: “I’m here to protest the way that economics curricula have become just a vehicle for very narrow theories of self-interest and rationality which basically legitimate the system of economic organization that works for very few people, and hurts the vast majority of people—99% of people.”

Though the protests and teach-ins were not large—the largest rally peaked at about a hundred fifty people—they were loud and spirited. They also brought together a wide range of people and groups; in addition to the already-named groups, members of Ocupemos el Barrio, Occupy the South Side, and Iraq Veterans Against the War were in attendance during the events.

“In the actions and especially in the teach-ins, it really felt like activists, citizens, and economists were together taking economics back for the people, for the 99%,” said UCLA economist Chris Tilly, who is director of UCLA’s Institute for Research on Labor and Unemployment. “It was exciting and prefigurative in some of the same ways that the entire Occupy movement has been.” Now that there’s an Occupy movement, there’s a better chance that mainstream economists will escape their bubble, and generate fewer bubbles. Maybe some of them will even join in the struggle to build an economy that works for the 99%.

The image at the top is of someone from Occupy Chicago with an Alan Greenspan sign.  Here’s a video of the  “RAHMen noodle” street theater, featuring Lourdes Guerrero and Ruth Long (eventually the police told us we couldn’t have the table on the corner, so it had to be carried around, which of course made for better theater):


And here’s the video from which I got the Ben Schacht quote:



Arthur MacEwan’s Critique of the AEA in 1969: Our columnist and co-founder, Arthur MacEwan, stopped by the office the other day. When he heard about our protests in Chicago, he wanted to give me the text of a scathing critique he delivered to the AEA business meeting in 1969. Here it is:

Statement at the Annual Business Meeting of the American Economic Association, December 29, 1969, read by Arthur MacEwan:

We have come to denounce the American Economic Association, and to denounce the dominant economics for which the A.E.A. provides the organizational support.

Economists in the United States work as a group and work contrary to the interests of the masses of people. The affluence and the power of the economists derive from their support of the elite, the elite which controls the institutional structure and the sources of power that perpetrate and reproduce the oppression of millions—the economists are the sycophants of inequality, alienation, destruction of environment, imperialism, racism, and the subjugation of women.

Economists are the priests and prophets of an unjust society. They preach the gospel of rational efficiency, justifying the reduction of man and nature to marketable commodities; they treat human beings as capital and tell us the poor are poor because they lack “productive skills”; all they tell us about the war in Vietnam is how to fight it more efficiently; they apply mathematical models that “prove” that foreign investment helps the development of poor countries; they tell us that racism is the result of “personal preference”; they tell us that private property and wage differentials present a system of personal material incentives “necessary” for “growth.”

But the economists do not merely praise the system; they also supply the tools—indeed, they are the tools—instrumental to the elite’s attainment of its unjust ends. They show how to manipulate people so that the system’s binges are smoothly oiled. Economists are minimizers of just discontent: in the face of police riots in cities, it is the economists who develop “people appeasement” programs to prevent rebellion; when a reactionary government controls a poor count r y, economists are sent to “rationalize” and “stabilize” its economy; when students rebel on campuses, it is the industrial relations economists and game theorists, the rational arm of the police, who provide the program for repression.

The American Economic Association must be denounced as the organization through which these economists operate. But further, the A.E.A. plays directly destructive roles in our society. It serves to insure the perpetuation of professionalism, elitism, and petty irrelevance. It serves to inhibit the development of new ideas, ideas which are reflective of social reality.

Our conflict with the A.E.A, is not simply an intellectual debate. The A.E.A. cannot lessen our condemnation by their willingness to partake in debate, or by their willingness to provide a room to radical economists at this meeting. Our conflict is a basic conflict of interests. The economists have chosen to serve the status quo. We have chosen to fight it.

Plus ça change…

(3) Repubs Critique Vulture Capitalism: Have you noticed that the Republicans (or at least Romney’s opponents in the primaries) have suddenly become harsh critics of predatory capitalism? Here’s a link to the film by Newt’s SuperPAC, Winning Our Future, that Newt has been excerpting in his anti-Romney ads: When Mitt Romney Came to Town. It’s a hoot. Hat-tip to John Miller.

(4) Critique of Adam Davidson: Hat-tip to Bryan Snyder for pointing out Alternet’s excellent critique of economist Adam Davidson, who is behind NPR’s Planet Money: Mr. Davidson’s Planet.

That’s it for now.

–Chris Sturr


Comments (5)

  1. Pingback: Article on Occupy the AEA on Dollars and Sense blog « CACHE

  2. Actually, the cat with the Greenspan sign is Bill Barclay from the Chicago Political Economy Group. He does Occupy stuff too, though. :)

  3. 0.5% of the world’s adults own 35.6% of all assets, 8% own almost 80%. From Credit Suisse Bank’s report World Wealth Report, Oct. 2010. —- “Our conflict is a basic conflict of interests. The economists have chosen to serve the status quo. We have chosen to fight it.” Arthur MacEwan.

  4. Altho never a “licensed” economist, I am more than happy to be the picture of opposition to the AEA, holding the “I was Wrong” sign. I am also a founder of the Chicago Political Economy Group and urge all to go to our web site:

    Best fortune as we continue to struggle against the RC’s economists and the devastation that their theories justify. (Just to be clear: AEA economists don’t cause the predations of the RC – they just try to legitimate them).

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