SYNOPSIS: Krugman's first article on the economic culture wars: economists versus literati

Late in the summer of 1992 I received the page proofs of an article I had written for a liberal intellectual American magazine. I phoned in a few corrections; only one of them was really important. Editors always change your title - and the new title was snappier than my own pedestrian proposal. But the editor had added a subtitle that horrified me. It was, I thought, utterly inappropriate for a plainly written article that was distinctly populist in its implications. I pleaded with him to drop the subtitle, but when the article came out there it was: 'The rich, the right, and the facts: deconstructing the income distribution controversy'.

'Deconstructing'? Why would an editor (who, incidentally, regarded himself as a champion of ordinary working Americans) insist on using a buzzword that means nothing to most people and alienates most of the rest? Was he not gratuitously playing into the hands of his (and my) political opponents? I was baffled. But I now think I understand his motives - and I believe that this seemingly trivial incident offers an insight into a hidden conflict that lies behind many of the confusions that bedevil the public discussion of economics. Every economist who ventures beyond the confines of the academic world gets used to facing a certain amount of hostility. Some of that hostility comes from people who hold strong political views and do not want them challenged; some of it comes from people who want more from economists than they can deliver - easy answers to hard problems, accurate predictions of the inherently unpredictable. What I have gradually come to realise, however, is that there is an extra reason why certain people, namely literary intellectuals, are hostile to economists. Their hostility is not so much political as cultural.

My point is a familiar one: that our society remains divided between C. P. Snow's two cultures; or perhaps to put it differently, there is a continuing struggle between two ideas of what it means to be an intellectual. One culture is humanist and literary; the other mathematical and scientific. The editor of my article, I now believe, was perhaps unconsciously using the language of critical theory as a way of declaring his allegiance in that struggle; he was saying: 'I may write about quantitative stuff like GDP and real wages, but my sensibility is literary.'

In this particular case, the harm done by the culture war was minor: the audience for my article was probably reduced only marginally. But I have become convinced that the divide between two kinds of intellectuals - those who feel comfortable with a more or less mathematical approach to the world and those who do not - is a hidden but powerful force confusing and garbling the public discussion of many issues.

In a way, economics can be regarded as one of the humanities. Like history or sociology, it is concerned with human beings and what they do. And it is therefore a subject in which many humanist intellectuals are interested. But, as a discipline, economics is firmly on the mathematical side of the great divide. It is, indeed, a field in which ideas are mainly expressed in the form of mathematical models. This means that humanist intellectuals, even when they are deeply interested in economic affairs, generally find what mainstream economists have to say repellent if not incomprehensible. And because such intellectuals are uncomfortable with the way economists think, they systematically favour economic thinkers and ideas that most economists, with good reason, regard as unworthy of serious attention.

The result is that the wider public debate about economics, a debate that is largely filtered through publications edited by people who are or would like to be literary intellectuals, is deeply distorted: facts and concepts that research has established beyond a reasonable doubt are rejected or ignored, while views that are flatly wrong but that appeal to a literary imagination remain stubbornly in circulation. And these misguided views directly shape debates over real economic policy.

Consider The Atlantic Monthly - one of America's most influential intellectual magazines, and one with more coverage of economic affairs than most of its rivals. I recently did a quick review of The Atlantic's articles from mid-1993 to date. Over that period, there were by my count 16 articles dealing mainly with economics, about one every other month. Eight dealt with international trade (a surprisingly high proportion for the United States, where imports are only 13 per cent of national income); every one of those articles, and most of the others, expressed views that no serious researcher would support, and explicitly denigrated the economics profession as a whole. Admittedly, this record is at least partly a reflection of the personal preferences of The Atlantic's editors. Still, a similar hostility to economics may be found in many other publications.

Of course, one might argue that this hostility is a mark, not of the prejudices of intellectuals, but of their perceptiveness. Maybe economics really is a 'failed profession', and literary intellectuals just happen to be clever enough to realise it. But this explanation does not survive a close inspection: whenever one looks at an issue on which the views of mainstream economists and those of the economic thinkers favoured by the literati diverge, one finds that the opposition to economic orthodoxy rests not on a reasoned critique but on a failure to understand basic concepts.

Nowhere is this more apparent than in the discussion of international trade. Free trade is an idea intellectuals love to hate. As I said earlier, The Atlantic has devoted half of its economics articles in recent years to international trade - a far higher proportion than the intrinsic importance of the subject can justify. And without exception these articles conclude that the economists' case for free trade is all wrong. Similar attacks on conventional views of trade have appeared in virtually every intellectual magazine in the English-speaking world.

What is it about mainstream economic views on international trade in particular that inspires such hostility? It cannot be that these views are particularly stupid: the modern theory of international trade is nothing if not subtle, and its distinguished lineage includes some pretty impressive intellectuals (David Hume, John Stuart Mill).

It also cannot be that conventional trade theory is excessively dogmatic: on the contrary, economists have long recognised a variety of qualifications and exceptions to the classical case for free trade. So why not emphasise these qualifications, rather than attack the whole intellectual structure built up over the past two centuries?

The answer, I would argue, is that what literary intellectuals dislike about the conventional economic analysis of trade is that it is necessarily expressed in a language they do not understand or want to understand. For someone who is comfortable with even low-level mathematical thinking, the classical analysis of international trade as John Stuart Mill developed it can seem trivially simple. But to get that analysis across without the maths - to explain the basic story entirely in plain English - is, as seven generations of economists can attest, nearly impossible.

Simple as they are, the basic concepts of conventional international trade theory turn out to be as inaccessible to the anti-mathematical intellectual as those of quantum mechanics. And so the same ideas that seem clear, beautiful and compelling to most economists seem like obscure mumbo-jumbo to many highly intelligent people.

Conversely, ideas that seem evidently absurd to mainstream economists can seem plausible to many other intellectuals. For example, any economist who picked up Sir James Goldsmith's manifesto The Trap, which has received attention in several magazines and newspapers, quickly realised that Goldsmith's ideas about the world economy were not merely open to question, but the very same classic confusions that have been the source of exam questions on a thousand undergraduate midterms.

And now we come to my final point: the peculiar way in which the hostility of humanist intellectuals to mainstream economics has ended up giving aid and comfort to some rightwing politicians. For Goldsmith is not just a billionaire author; he is also a leading voice in a political movement that has recently begun to flex its muscles on both sides of the Atlantic. There is a new kind of rightwinger abroad in the land, one who mixes harsh social conservatism with protectionism and nativism. Where does this ideology come from? A few months ago, when the initial electoral successes of Patrick Buchanan had stunned America's political commentators, The Wall Street Journal asked the candidate about the sources of his ideas. Given the belligerent populism of his campaign, one might have expected Buchanan to disclaim any intellectual influence, to insist that he was simply preaching native common sense. But instead he offered an extensive intellectual pedigree for his ideas, citing not only modern authors like Goldsmith but 19th-century predecessors. In particular, he cited the protectionist doctrines of Friedrich List.

How did a late 20th-century American populist become a disciple of a confused early 19th-century German economist? Well, Buchanan did not discover List on his own: he was led there by the books and articles of James Fallows, the Washington editor of, yes, The Atlantic, who has in recent years attempted to promote List as an iconic figure, a sort of anti-Adam Smith. In short, here is a case in which the hostility of a literary intellectual to conventional economics has helped to provide an intellectual gloss to ideas that every educated citizen should instantly recognise as nonsense.

It would be silly to suppose that we can bring the war between the two cultures to an end. After all, that conflict has raged for at least two centuries. But it is possible for the educated individual to become aware of what is going on; to recognise that the negative things intellectuals say about economics may have less to do with content than with culture and style.

Originally published, 5.10.96