Murdochracy vs Quiggin: One last snark

In citing Steve Williamson’s negative but content-free review of my book, the Oz Cut and Paste section decided to puff Williamson’s credentials as an expert (an interesting move in the light of Paul Krugman’s evisceration of this kind of rank-pulling argument from authority).

Sad to say, the Oz proved as unreliable as ever on this topic. It described Williamson as “the doyen of modern monetary policy”. “Modern monetary policy” (and, even more, “modern monetary theory”) is a term most closely associated with the post-Keynesian chartalist school.[1] Williamson’s actual claim to fame is something called “New Monetarism”, which is about as strongly opposed to Keynesianism as you can get (at least while still doing DSGE-style macro). But such subtle distinctions are lost on the knee-cappers at News Limited.

fn1. I guess the Oz could be claiming that the term “modern’ here just means contemporary, and that Williamson is the dominant figure in guiding monetary policy today. It’s hard to know whether this more insulting to Ben Bernanke or to Williamson himself, who isn’t exactly a fan of actually existing modern monetary policy.

39 thoughts on “Murdochracy vs Quiggin: One last snark

  1. Is it true that when parting, members of the Chicago School say to each other “May the flaws be with you!”?

  2. Those who recall Doctor Who and the Pyramids of Mars will remember the Doctor was held in captivity by the evil Sutekh, who refers to him as the ‘plaything of Sutekh’, as the Evil One messes with his mind. I reckon John Quiggin has joined the fraternity of ‘playthings of Mitchell’, those doughty souls who are occasionally selected for a dose of venom and vitriol in ‘The Fundament’. Dean Mighell, Michael Mansell, Germaine Greer (a perennial favourite) John Pilger, Noam Chomsky et al, they all take it in turn to be slimed. And you get a category where Chris just can’t let go, even though the monster in question has left this vale of tears. One, naturally, thinks here of Manning Clark, although he must be a sentimental favourite as the ‘Manning Clark’s Secret Order of Lenin’ ‘scoop’ was Mitchell’s entree into the Big Time in Murdoch’s Empire.

  3. Great that a career in the Murdoch multi-verse can survive a scoop like ‘Manning Clark’s Secret Order of Lenin’. In fact, given FoxNews no wonder that not only did it survive, but it prospered.

  4. Quiggie: Steve Williamson does NOT do dynamic stochastic general equilibrium (DSGE) theory. He is a monetary economist in the style of Nobu Kiyotaki, Randy Wright and Neil Wallace. In fact, some people say it started with Peter Diamond, this year’s Noble prize winner. It is all theory, and does not involve simulation on computers. DSGE modelers are NOT enamoured with it. Neither are traditional monetarists. It’s an active and growing area of research. Williamson has written a survey paper on this area for the forthcoming Handbook of Monetary Economics.
    He is a doyen of modern monetary economics, whether you like this or not. You need to school yourself on some of the things you write about. But, maybe ingnorance is bliss.

  5. Hi John,

    In my household, the joke of the day is that I am a doyen of something. For today, I’m just a window-washer. The players in modern macroeconomics, their motivation and influences, and how the ideas are used to think about policy, are very hard to sort out. In part that is due to the fact that there are incentives to misrepresent ideas for political purposes. That’s a good part of what Krugman is up to. Reading Krugman won’t help anyone understand the nature of modern macroeconomic thought. I do my small part to try to keep the man honest, and he clearly does not like it. What you’re calling “evisceration” is just standard ad hominem.

    My blog post on your book was cryptic by design. You have to puzzle over it somewhat to figure out what I’m talking about. The JEL review is longer and more detailed but still something short. I’ll write something longer for you to peruse, and I’ll let you know when I’m done with it. Not right away though. Have to go buy some food and wash some windows.

    Steve

  6. Steve Williamson :
    …cryptic by design. You have to puzzle over it somewhat to figure out what I’m talking about…
    Steve

    First time I have heard someone fishing for praise on the basis that they’ve been inarticulate!

  7. Not fishing for anything in particular. You understand that “cryptic” and “inarticulate” have different meanings? In the first case there is meaning there, but it’s obscure. Once you solve the puzzle it’s quite clear. In the second case, there is a divide between what you mean and what you stated.

  8. @Steve Williamson

    No. Didn’t know any of that. No wonder you’re a doyley or something (whatever that is).

    I hear you’ve been included in Wikipedia. Congratulations! Can I get your autograph?

  9. Hi Ernestine,

    Yes, I am sometimes called that. My dog thinks of me as doyen of food.

  10. From what I’ve seen of Williamson’s “New Monetarism”, much of it’s purpose it seems is to be cryptic by design. It generally involves, for example, beginning by modeling money as only a medium of exchange, and then using lots of superfluous math to show that the optimal inflation rate is then zero. Which is essentially assuming the consequent.

    It also seems unrelated to David Roche’s “New Monetarism”, a 2007 book in which Roche describes:

    “How new forms of financial liquidity are creating unsustainable asset price bubbles that eventually could burst with dire consequences for investors in stocks and bonds around the world.”

    But of course Roche wouldn’t rank at all as an expert, as you won’t find him at all in the RePEc database.

    (*or this 2006 paper from Roche:

    Click to access New_Monetarism260406.pdf

    )

  11. Interesting thought is it not?

    They now want to write a book “Handbook of Monetary Economics”. Isn’t it a bit late? What were they using before?

    The more they focus on ‘money’, the less they understand ‘value’ – the social distribution of which is bedrock to all understanding.

    I wonder if our latest crop of career economists are interested in differentiating between between money before capitalism and money in capitalism.

    Under fuedalism and mechantilism, in principle the economic transactions could be effected by barter or commodity notes. In early Australia a bottle of rum = 10 lbs flour and 1 lb tobacco = 30 lbs flour [SJ Butlin, Foundations of the Australian Monetary System 1788-1851, SUP, p194]. Money (currency) was much more efficient.

    Not so under capitalism. Under capitalism, even though value stays constant (ie you only ever have 1 annual net gdp, year after year, irrespective of the form of wealth – assume constant pop), the distribution is manipulated by capitalist-money, principally the vast difference between capitalists with ‘finance’ and workers with ‘wages’. As S J Butlin noted: in colonial Australia debauching of money (small notes) created “great injury and inconvenience to the lower classes” [SJ Butlin, Foundations …, p177].

    But you only have capitalism if money is debauched, ie overall, in Marx’s schema, money now goes from an initial quantity M to a augmented quantity M’.

    Under capitalism, by definition, this must occur even if value stays constant. It therefore is a mistake to assume or imply that the current crisis can be fixed or alleviated by manipulating today’s money mechanism. However, such ploys can be used to shift the cost of the crisis onto one economic class of activity, depending on the political strength of each such class.

    But judging from recent comments crossing our TV screens, not even capitalists understand their own monetary system and even academics are stuck with only explaining it in hindsight.

  12. Mr Williamson accuses Krugman of ‘..misrepresent(ing)ideas for political purposes’, and these ideas are apparently some of those involved in ‘modern macroeconomic thought’. Now, I’m afraid that I’ve never met anyone with an IQ above room temperature who does not hold political opinions, and individuals so intellectually rigorous and determined as to not allow their personal political ideology to influence their opinions in other fields are similarly scarce. So, is Mr Williamson claiming to be apolitical himself in his criticism of Krugman, and apolitical in his economic postulations? After all we live in an age where personal ideological conviction has become so dominating that it has been brought to bear to distort and contort the very laws of physics and chemistry in the field of climatology, and just about every field of science there is in regard to ‘Creation Science’ and ‘faith-based science’ in general. I would have thought that economics is certainly a field where the influence of personal political faith is ubiquitous and unavoidable.

  13. Williamson: “Reading Krugman won’t help anyone understand the nature of modern macroeconomic thought.”

    However, it appears that reading Krugman will do a great deal to help someone understand current macroeconomic CONDITIONS, which is a much more important goal than understanding “modern macroeconomic thought” (whatever that is).

  14. Stephen Williamson’s critique of John Quiggin’s book, as shown on the blog-site referenced on JQ’s thread is not a critique; it is an embarrassment to its author.

  15. 1. My work has nothing to do with David Roche, who I know nothing about.
    2. The “Handbooks” series is published by Elsevier. There is a “Handbook of Labor Economics,” a “Handbook of Econometrics,” etc. The Handbooks are supposed to capture the current state of the art in the field. In the latest version of the Handbook of Monetary Economics, Randy Wright and I were asked to write a chapter, which you can find on my web page, and in the published book.
    3. “It generally involves, for example, beginning by modeling money as only a medium of exchange, and then using lots of superfluous math to show that the optimal inflation rate is then zero. ” No, not quite right. And there’s more to it than that.
    4. It’s not a problem that Krugman is political. The problem is that he writes politics masquerading as science. And that’s a problem for economists. Further, Krugman and I do not disagree on politics.

  16. @Ernestine Gross

    Oh. You mean its not deeply profound? Not something that we need to puzzle over for ages, before, if we are lucky and clever enough, we fully appreciate its genius?

    Who’da thought?

  17. Ernestine,

    What’s to be embarrassed about? If I had written a poorly-researched rant concluding we should throw out great swaths of careful and pathbreaking science, for the purpose of fluffing up my bank account at the expense of the reputations of mainstream economists with the lay public, that would be embarrassing.

  18. what’s this “science” of which Steve Williamson speaks? An unfalsifiable theory which “has no implications”? Calling this groundbreaking is what’s embarrassing.

  19. @gerard

    When one has such and comprehensive cheer squad in one’s self (and adog that thinks he’s a food doyley) who needs facts, falsifiability, or anyone else.

  20. @Freelander
    Freelander, my good friend. Thanks for asking about me. No, that wasn’t me. As you must have heard, I been put in Quiggin’s prison. Apparently free speech is allowed in Quigginland. Well, this is the final goodbye. Don’t cry for me Freelander.
    Goodbye Friend.

  21. @Steve Williamson

    There is nothing in your paragraph which would require me to change my mind. I refer you to an earlier thread on this blog site for my detailed comment on one item, namely the EMH. This item is sufficient to establish my point.

  22. The handbook title is a bit of a misnomer. First, you would need giant sized hands. Second, the volumes tend to provide an authoritative and encyclopedic review of theory and research in a particular area rather than being books of guidance or instruction. (Encyclopedic, although topics not indexed alphabetically in the ToC).

  23. Donald, it’s the ideology of ‘sado-monetarism’ which does the most harm.

  24. While Williamson was a bit rude toward Quiggin, his bottom line is correct: Zombie Economics is bad work.

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