Political Entrepreneurs

The Economic Engine of Political Change

Why Publishers Weekly Should Look Into How the Dismal Science Got its Name

April 20th, 2014 by Edward Lopez

The reviewer for Publishers Weekly did not like Madmen, Intellectuals, and Academic Scribblers. Annoyed evidently with the fact of economics — it’s very existence — the (anonymous) reviewer twice associates Madmen with “the dismal science,” hoping the reader shares every negative and objectionable connotation the reviewer seems to cast on that association. Madmen, we’re told, is dismal because it is a work of economics, because it is a difficult read, and because it recounts the life and works of “unheralded” Nobel prize winners such as Jim Buchanan and Ron Coase.

Meet Thomas Carlyle, who in 1849 coined “dismal science” while opposing John Stuart Mill and other free-trade economists on the slavery question. Mill and other laissez-faire economists believed all persons, black or white, are equal before the law and have the right to free trade. Carlyle was calling economists like Mill “dismal” because they were anti-slavery. Maintaining the slave trade was crucial to British society, Carlyle argued, because without it the supply of sugar and spices would run dry. Thus, the phrase dismal science emerged as a rhetorical instrument to seduce readers into opposing free-trade and freedom. This was the case in 1849, and this is sadly on display in the Publishers Weekly review of Madmen.

As for being difficult to read (“leaden and labored”), to my knowledge it is just this lone reviewer who characterizes Madmen this way. The rest have praised it for being accessible, memorable, lively, and fun — perhaps too fun! And as for recounting the lives and work of “unheralded” Nobel laureates, the reviewer curiously omits from our list one F. A. Hayek (perhaps for being too obviously and clearly heralded that a credibility constraint intervened, whether by the reviewer or among his or her editors), while also neglecting to mention that we give equal time to the work of Samuelson, Tobin, Pigou, and Keynes as to Hayek, Coase, Buchanan, V. Smith, and E. Ostrom.

The ugly history of dismal science is available to anyone who reads, thanks to the meticulous work of intellectual historians (and laissez-faire economists) David Levy and Sandra Peart. For starters, here is the cover of David Levy’s 2001 book, How the Dismal Science Got its Name. The two also provide a six-part series at The Library of Economics and Liberty which is published and hosted by Liberty Fund, Inc.  If all those many thousands of words are too “leaden and labored” for some, there is even a short video lecture by Alex Tabarrok at MRUniversity.

Most people erroneously think dismal science is a reference to the doom of Thomas Malthus. Perhaps the Publishers Weekly reviewer is fallen to this myth. There is no fault in that. But repeating Carlyle’s dirty ploy without any recognition of doing so despite the truth being readily available? Well. Next reviewer, please.

NOTE: Because webbed content is fluid, I’m reproducing the entire Publishers Weekly review.

Called the dismal science, economics is most dismal when rendering interesting ideas into leaden and labored language. Political economists Leighton and López tackle the rigorous task of delineating ideas at the root of government policy and discussing the ways these entrenched notions have periodically been uprooted. Their subjects include radio wave licensing, airline deregulation in the late 1970s, 1990s-era welfare reform, and the creation and collapse of the early-21st-century’s housing bubble. The authors dissect the first two successes and latter pair of failures in lengthy, meticulously researched terms typical of economists turned political scientists with unfortunately little result beyond truisms about “entrepreneurs of political change.” The authors also provide brief introductions to significant Nobel laureate economists whose work remains largely unheralded outside the academy, such as James McGill Buchanan and Ronald Coase. The influential theories of these scholars, however, tends to clash with political reality, a phenomenon described too abstractly for either a satisfying intellectual history or a concise explanation of the economic roots of actual policy making. (Nov.)

Photo credits: Carlyle from the authors of Wikipedia, book cover from University of Michigan Press.


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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.189, ch.7)

The most successful entrepreneurs know what they do well, they know the market and the opportunities within it, and they choose those activities that create the most value. This is true in economic as well as political markets.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.178, ch.7)

[W]hen the right elements come together at the right time and place and overwhelm the status quo, it is because special people make it happen. We call them political entrepreneurs.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.176. ch.7)

While we started this book with Danny Biasone saving basketball, we end it with Norman Borlaug saving a billion lives. These stories are not that different. Both faced vested interests, which were reinforced by popular beliefs that things should be a certain way—that is, until a better idea came along.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.174, ch.6)

Because there was a general belief that homeownership was a good thing, politicians found the public with open arms.... Everybody was winning—except Alfred Marshall, whose supply and demand curves were difficult to see through the haze of excitement at the time, and except Friedrich Hayek, whose competition as a discovery procedure was befuddled... In short, once politicians started getting credit for homeownership rates, the housing market was doomed.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.166, ch.6)

Everyone responded rationally to the incentives before them. In short, the rules that guided homeownership changed over time, which in turn changed the incentives of these actors. And bad things happened.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.153, ch.6)

They understood the economics. The ideas had already won in ... the regulatory agency itself. All that remained to be overcome were some vested interests and a handful of madmen in authority.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.146, ch.6)

If the idea for auctions of spectrum use rights had been part of the public debate since at least 1959, why didn’t the relevant institutions change sooner? What interests stood in the way?

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.121, ch.5)

When an academic scribbler comes up with a new idea, it has to resonate well with widely shared beliefs, which in turn must overcome the vested interests at the table. Many forces come together to explain political change, even though it may seem like coincidence of time and place.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.120, ch.5)

It’s the rules of the political game that deserve our focus, not politicians’ personalities or party affiliations.

From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.119, ch.5)

In short, ideas are a type of higher-order capital in society. Like a society that is poor in capital and therefore produces little consumer value, a society that is poor in ideas and institutions will have bad incentives and therefore few of the desirable outcomes that people want.

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