(33): Musings on 20th-Century Economic Thought.

MA Iliasu.

Ideas and ideologies appear more radical and come across as more triggering when they're young, but when they mature, they calm down and settle either themselves or society into inevitable moderation. This, among others, constitutes the major takeaways from Peter De Haan's treatise, "From Keynes to Pickety", a book I discover tremendously informative not only on the evolution of Economics in the 20th century but also on the blending nature of most sociopolitical, cultural and intellectual traditions.

With that in mind, I understood it's not enough to respect beliefs, ideas, ideologies, and whatever alter the possibility for objective knowledge. The same courtesy, I figured, is due to experience - the byproduct of active engagement and old age. Surely knowing a phenomenon is one thing while living to dribble through its complexities entirely another. And along that path, so much of what influences the consumption and interpretation of knowledge changes; and mostly for good.  Disseminating that to oneself without prejudice may occur if time permits any discerning mind to sip what became of the most notorious ideas to have arrived in the centuries that precede us, but that which later force themselves down to the throat of the society. Firstly, unwillingly, but in the end, so agreeable they dominate the mainstream.

Take the evolution of socioeconomic thinking in western society during the early 20th century. It was Joseph Schumpeter that drew the first blood by attempting to make a norm out of the oddity, when his masterpiece "Capitalism, Socialism & Democracy" examined whether Socialism - the then symptom of infidelity - could eclipse Capitalism. Maybe, Schumpeter thought, Marx the bastard is more misunderstood than anything else, thus worthy of contextualizing. And that way, perhaps it could be realized how there's some more sense in his ideas than what dominated the mainstream. This belief, no matter how little, was passed down to his closest students like Paul Samuelson and the likes of Joseph Stiglitz. From there you're going to have another generation of intellectuals that would be less moved, in a negative way by the mention of Marx and Socialism at worst, or at best the inconsistencies of the capitalist cohesion that dominated since the enlightenment. Who else remembers that later some economists like Paul Sweezy decided to identify as socialists even?

Alongside Schumpeter was his mate in age and pedigree, his inferior in intellectual range, but noticeably superior in logic, penetration, brainpower, and in orchestrating opinion, a Brit called John Maynard Keynes. To Keynes and evidently to the society, a lot has gone wrong, therefore a shift was inevitable if any solace was to be in sight. He spoke in the "Economics Consequences of the Peace" and acted in "The General Theory". The ideas were original but not alien to the Swedish intellectuals under the leadership of Professor Gunnar Myrdal. Results came out and Keynes' experiment passed with flying colors. It was on record that the victory was so phenomenal, and the impact so felt, that even the bonafide monetarist rival, Milton Friedman said: "Are we all Keynesians?"

But where's the surprise?

Imagine how odd it'll come across when a stark Sunni-Muslim suggests that the only way forward for Muslim society is abandoning some core teachings of the Sunni creed and in its stead adopting that of shiism? I'm certain he'll come across as deviant, to some even a non-believer. Many will doubt his education even if nothing in the quality of his logic can be doubted. That'll be equal to the emergence of Keynes and his remedies to classical thinking. To say Laissez Faire is dead was intellectual blasphemy. Who was ready to even question the enlightenment and see freedom as a political philosophy it has always been that economics science. Capitalists and liberals thought he wasn't one of them. His knowledge of economics became debatable. But interestingly it took less than twenty years before everyone admitted he was right, and his new ideas dominated the new mainstream thinking. And there was hardly anything anyone can do about it.

And that's the phenomenon with dynamism; when it says the transition is here, it doesn't matter who's ready to migrate. The migration will just take place.

And it was such migration that gave birth to take the popular Karl Polanyi and his incisive, nerve-touching, pro-Keynesian takes as intelligibly delivered in "The Great Transformation". And the master of all, Samuelson. Society's knowledge of history was undoubted. But society's acknowledgment of the downward or upward possibilities of change in the new order is overrated. Perhaps a lot of people had been living a truth that has now become a lie, which perhaps they have seen with their own eyes but can't seem to persuade themselves to admit. There were lies that most probably have seen guidance and converted into truth, which also are hardly convincing at the beginning until they become rude as to start rubbing themselves on deniers' faces. Such were the spoils of Socialism, Keynesianism, and later even libertarianism after Friedrich Hayek and his mentor Von Misses made it to the ears of Ronald Reagan and Margaret Thatcher. Now you have a pattern in the resurgence of the new order that has no problem challenging the status quo no matter how ridiculous it sounds.

For better or worse, it can't be denied how there's evidence proving the slight infiltration of cognitive dissonance in the activities of veteran intellectuals, ones that dominated the old order and aren't ready to migrate to the new one. And despite that, I'm sure a lot of ideas profounded by most thinkers, or the ones they backed, had they lived long as Samuelson did, would've gone through a rethink, for no other reason but the experience. He witnessed as correct theories prove incorrect, not because of anything but the test of time. We witness as history gets defied, not because there's an error in the models of the prediction but simply because of the dynamic of time that in itself never stops evolving. The most important thing is to identify the upward or downward possibilities and brace oneself up.

It must've been rudely awakening, I thought, to realize that in 1700, there was no such a thing as Classical Economics, only the pamphlets of the scholars from the enlightenment, at least not in the developed form we revisit currently. But the century didn't close until it was flowing in full swings. Just like there was no such thing as Marxism in 1800, nonetheless, Communism became such a phenomenon before the century closed. The same could be about Keynesianism before the 1930s, which became the conventional wisdom before the new order was designed. The same about Schumpeterianism, libertarianism, and all the generation of scholars it inspired.

Let that be an attempt of someone who's infatuated with the economic thought, but one thing it teaches is that at the end of the day, ideas as spices and energy sources of social organization start as aliens, then evolve to developing, then dominating, then incorporating, then consolidating, then as declining, then getting replaced by the emergence of another order. That has been the pattern, so much like the cyclical analysis of Ibn Khaldun, now somehow relevant to the history of thought.

Muhada102@gmail.com