From Episteme to Institution: An Interview with Philip Mirowski

Introduction

The following interview with Philip Mirowski was undertaken from the end of 2011 through the beginning months of 2012. It was origi-nally supposed to be published on the popular Naked Capitalism web-site. Why it was not, I do not remember. Reading over it now a year and a half later, however, gives me a certain advantage in introducing it as I can approach it with fresh eyes.The interview gives an extremely comprehensive overview of Mirowski’s work and, I think, provokes answers that may not be found in any of his previously published books or journal articles. As the reader will soon appreciate his work is remarkably diverse and almost appears to lack structure. To think this, however, is to be mistaken. There is a very discernible structure in the trajectory of Mirowski’s work. Indeed, it seems to be an identical structure that is found in the trajectory of the work of the philosopher who most closely resembles Mirowski. I have in mind, of course, Michel Foucault.Like Foucault, Mirowski’s earlier work is focused on uncovering ‘epistemes’ – that is, dominant metaphors that structure discourses at any given moment in history. It is these dominant metaphors that Foucault too tries to uncover in his famous work The Order of Things. Unfortunately, despite being, as Mirowski says in the interview, “a

From Episteme to Institution: An Interview with Philip Mirowski

Entrevistas

Filosofía de la Economía ISSN 2314-3592 (Impreso)/ISSN 2314-3606 (En línea)

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Filosofía de la EconomíaVol. 1, Nro. 2, Diciembre 2013, 109-133

Philip Pilkington

Kingston University [email protected]

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highly suggestive thinker”, Foucault ultimately gets it wrong because he looks in the wrong place. Rather than looking to the Port Royal grammarians and philosophers as Foucault did, Mirowski in his More Heat Than Light focuses on 19th century energy physics. He shows that ideas taken from energy phys-ics were integrated directly into the then nascent neoclassical eco-nomics1. If one moves beyond the bounds of economics it quickly becomes evident that energy physics metaphors were completely pervasive at the turn of the 19th century. Even such a thinker as Freud, who is usually (and rightly) thought of as breaking from crude sci-entism in psychology, builds his psychoanalytical doctrines on energy metaphors borrowed from the physician and physicist Hermann von Helmholtz (Powell 2002). In tapping into the connection between economics and physics in the late-19th century Mirowski does no less than unearth the dominant episteme of the age.Mirowski does this once again in his Machine Dreams. In that book he uncovers the computational metaphors that underlie the contem-porary economics of information (think here of the efficient mar-kets hypothesis, to give a familiar example). Once again, however, Mirowski’s particular inquiry into the connection between econom-ics and the hard sciences yields more general results: the computer metaphor, on closer inspection, seems to be the dominant episteme in the post-World War II age.After this Mirowski takes what might be called an ‘institutional turn’, as did Foucault in his later works such as Discipline and Punish and The History of Sexuality: Volume I. In The Road From Mont Pelerin – a joint venture to which he contributed– Mirowski shows how the politi-cal movement that we today term ‘neoliberalism’ began as a thought collective called the Mont Pelerin Society that was funded and but-tressed by a wide variety of right-wing sister organizations. While in Science-Mart Mirowski shows how neoliberal discourse is channeled into the structure of scientific research itself. After the fall of the mili-tary Keynesianism that provided science with funding in the post-war era, scientific research was opened up to the market. Monetary in-centives soon became pervasive and sometimes all-encroaching.

1 Given that Mirowski and I used the term ‘neoclassical’ to delineate a school of thought throughout the interview I will continue to use this term in this introduction. It should be noted, however, that recent work by Tony Lawson has called into serious question the use of the term to designate what should probably more accurately be referred to as ‘marginal-ism’ (Lawson 2013).

P. Pilkington - From episteme to institution 337

How are we to approach such a wide variety of work? I would sug-gest that we can tease an underlying structure to Mirowski’s work – which is an identical structure to that found in Foucault’s. At the very heart of his work are the epistemes; the structuring metaphors of the discourse of an age. These metaphors give structure to a discourse that at once delineates what can and what cannot be articulated. Such epistemes provide both the positive and negative foundation for all thought in that epoch. For example, in the 19th century marginalism was articulated in and through energy physics metaphors. Not only did these metaphors allow the marginalist doctrines to be articulated, but they also limited what could be said about the object of the dis-course; thus, for example, economies had to be thought to be tending toward a sort of teleological equilibrium position for the discourse of marginalism to be coherent.Thus it is that epistemes provide structuring principles for the dis-course of an age, but it is the institution that is required to allow this discourse to metastasize and exercise power in society. The institu-tion turns the epistemes into a political project; a principle or set of principles that humans then use to organize their societies. What are these institutions?Institutions should not be thought of as homogenous. As Mirowski notes in the interview, the Mont Pelerin Society had an enormous diversity of thought in that monetarists could be found next to Aus-trians who could be found next to hard-core neoclassicals. But the discourse this institution produced – that is, neoliberalism – was fairly consistent. The institution allows for a dissemination of a wide variety of epistemes to different groups with similar political motiva-tions. Thus, the Mont Pelerin Society at once disseminates neoclassi-cal ideas to the universities, monetarist ideas to the central banks, and Austrian ideas to an underground libertarian movement that rears its head publicly from time to time – in the speeches of Margaret Thatcher or in the trouble-making of the Tea Party, for example. In-deed, we could probably find a different combination and constella-tion of metaphors at the heart of each different theory, but through the institution they are all made to sing with a single voice; in the case of Mont Pelerin, one that promotes the so-called ‘free market’.These dominant political narratives, cobbled together from a smor-gasbord of epistemic metaphors, then turn back on the source of these metaphors and begin to exercise an influence of their own. So,

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the idea of a free market is applied to the institutions in which sci-ences grow and develop and science itself then begins to more and more resemble this notion of a free market. Thus we come full circle. The epistemic metaphors generate discourses that are then appropri-ated by institutions which fashion out of them dominant political nar-ratives which then in turn come to shape the sources from which the epistemic metaphors arise.What is unfortunate about Mirowski’s work is that it is not more widely known. Because Foucault’s research program ultimately re-sulted in a dead-end his ideas were watered down and turned into crude justifications for a highly moralistic movement known as ‘iden-tity politics’. Meanwhile, using effectively the same methodology but digging in more fertile soil Mirowski has uncovered what can only properly be called the organizing principles of our age. Yet who today is studying his work? A few economists interested in epistemology and the history of ideas? A small bunch of obscure science scholars? I do not say this to belittle their work, because it is so important and so path-breaking. Rather I say it to highlight the fact that they are desperately in need of an institution through which their ideas can spread. An institution, in short, that can provide the ground in which a theory that deconstructs institutions can grow. One would be for-given for thinking that this is some sort of philosophical paradox or puzzle to be solved. If it is then one can only hope that it can be solved sooner rather than later.

References

Foucault, Michel. (1994). The Order of Things: An Archaeology of the Human Sciences. Vintage Books.

Foucault, Michel. (1990). The History of Sexuality: Volume I. Vintage Books.

Foucault, Michel. (1995). Discipline and Punish: The Birth of the Prison. Vintage Books.

Lawson, Tony. (2013). What is This ‘School’ Called Neoclassical?. Cambridge Journal of Eco-nomics. Advanced access: http://cje.oxfordjournals.org/content/early/2013/06/19/cje.bet027.short

Mirowski, Philip. (1989). More Heat Than Light: Economics as Social Physics, Physics as Nature’s Economics. Cambridge University Press.

Mirowski, Philip. (2002). Machine Dreams: Economics Becomes a Cyborg Science. Cambridge University Press.

Mirowski, Philip. (2011). Science-Mart: Privatizing American Science. Harvard University


Press.

Mirowski, Philip & Plehwe, Dieter. (2009). The Road From Mont Pelerin: The Making of the Neoliberal thought Collective. Harvard University Press.

Powell, Craig. (2002) Freud and the Helmhotz School. Psychoanalysis Downunder: The On-line Journal of the Australian Psychoanalytical Society. Issue 2. Available at: http://www.psychoanalysisdownunder.com.au/downunder/backissues/issue2/313/freud_helmholtz

Interview Philip Pilkington: In your earlier work – specifically your book More Light than Heat – you make the argument that contemporary mainstream economics took over many of its formal arguments from 19th century physics. This is an important argument and we will come back to it in a moment, but first could you talk a little about what came before economics as social physics?

Philip Mirowski: The ongoing relationship between what later be-came ‘economics’ and what later became ‘science’ (earlier designated as ‘natural philosophy’) dates back very far, farther back than Adam Smith’s History of Astronomy and History of the Ancient Physics, even far-ther back than William Petty. Although such meditations predate the formal disciplines, the fascination had been over the extent to paint market relations as ‘Natural’, and thus more explicitly, to what extent the very same forms of inquiry are applicable to both nature and mar-kets, constituting a very old trope in Western thought. The Aristotelian option to portray certain market relations as unnatu-ral tended to dominate in moral philosophy up until the Renaissance, at which point it was gradually superseded by the presumption that one set of techniques were equally valid for natural laws and laws of society. It is symptomatic that alchemy sought to circumvent the seeming natural identity of material essence and the seeming natural identity of money through pursuit of a single esoteric set of doctrines.In More Heat than Light I discuss one important precursor to the ex-plicit social physics one observes at the origins of the neoclassical school of economics in the 1870s, and that is the prevalent idea in Europe that true value is intrinsic to the commodity, much like a spectral ‘substance’ that inhabits all things of social significance. This is clearly related to early theories of ‘substance’ in natural philosophy,

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such as the notion of vis viva in the early theory of mechanics, the notion of phlogiston in the theory of heat, or the notion of electri-cal fluid in early galvanic studies. In nascent political economy, this is mirrored by theories of ‘stock’, ‘corn models’, and the embod-ied labor theory of value as constituting the foundations of ‘natural price’. When substance theories decline in natural philosophy cum physics, then substance theories also suffer eclipse in classical politi-cal economy.Theories of Nature and theories of the Economy have always been intimately conjoined in the intellectual history of the West.

PP: So, you’re saying that the ‘substance’ theory of value – which was, in essence, the labour theory of value – was that which ‘ground-ed’ classical economics and prevented it from turning into a ‘social physics’? Perhaps you could then talk about what happened when the substance theories were eclipsed by more relational theories such as the marginal theory of value.

PM: Perhaps a better way of putting it is that a formal physics tradi-tion first had to solidify around the energy concept before there could be a fixed target for a self-conscious social physics to emulate. It is generally conceded that the energy concept grows out of analytical mechanics, coupled with the postulate of the conservation of energy and the elaboration of thermodynamics in the mid-19th century. The timing matters, because it helps explain the otherwise inexplicable near-simultaneity of the genesis of neoclassical economic theory in the 1870s in England, Switzerland, and to a lesser degree the Ger-man-speaking countries. Neoclassical microeconomics was not ‘dis-covered’ so much as it was copied from 19th century physics.The halting attempts to appropriate the mathematics of energy phys-ics are covered in More Heat than Light. The translation was never per-fect for various technical reasons – the neoclassicals actually tended to either neglect or avoid the centrality of conservation principles and subtleties of field theory in physics, but they were enamored of the calculus and the use of extremum principles (maximization subject to constraints) that were standard in energy physics; and for both mathematical and metaphorical reasons identified potential functions with so-called ‘utility’ and physical space with commodity


space. They were convinced this bald appropriation by itself qualified their endeavors as intrinsically ‘scientific’, even though the empirical complement tended to be absent back then. Thus began the endless fascination with a certain construction of ‘equilibrium’ in neoclas-sical economics which persists down to the present. The epithet of ‘marginalism’ was due to a fixation upon the expression of equilib-rium conditions employing the calculus, and a tortured rhetoric of ‘the marginal increment’ (or, marginal cost or marginal revenue) was deployed to further mystify those students innocent of the physical mathematics.The appropriation of this ‘social physics’ was significant as much for what was unconsciously and inadvertently freighted in as for what was explicitly achieved. Economics became an intently mathematical pursuit, structured around maximum principles and elusive utility functions; but it also dispensed with older notions of social classes, the central role of monetary phenomena, the portrait of uneven de-velopment of multiple market forms, the intrinsic functions of other institutions such as law and language, the persistence of systemic in-stability, and much else besides. ‘Psychology’, although often evoked, was almost never actually consulted. Earlier thinkers were consigned to oblivion. Economics turned inward to sunder its earlier connec-tions to philosophy and the other social sciences.

PP: I do want to move on, but just one more thing on the evolution of marginal utility, as it’s something I’ve always found fascinating – not to mention, ignored – about the theory and you seem to have touched on it here. The theory’s predecessor, the labour theory of value was, as you’ve said, essentially a ‘substance’ theory of value. In it there is a ‘thing’ – labour power – that is assumed to transfer itself into value. Although I think the theory is outmoded it is intuitively conceivable that a mea-surable ‘thing’ is being transferred from worker to product.Now, the marginal theory of value ostensibly doesn’t assume a ‘thing’ underneath the value relation. It simply designates a supposed psy-chological tendency in humans to ‘maximize their utility’. But if you really think about it, this theory is still assuming a quantifiable ‘thing’ – I’m talking about that mysterious quasi-entity called ‘utility’. Yes, this ‘thing’ is essentially subjective, but it is still assumed to exist –

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it is, so far as I can see, a sort of fixed or innate tendency in every individual that demands satiation and it is assumed to be quantifi-able in ordinal terms. I’ve called this – channeling Bishop Berkeley’s criticism of differential calculus – a ‘ghost of a departed quantity’, because while it is a ‘thing’ insofar as it is measurable, it seems to exist in almost spectral form.You’ve studied the history of the development of this theory; I’d re-ally love to hear your thoughts on the ontological status of this spooky quantity economists call ‘utility’.

PM: You raise the ontology of something which has a tangled history and a massive literature. My response will necessarily be sketchy. First, while there are many ‘precursors’ of the concept from Bernoulli to Bentham, I think the major thing to keep in mind is that none of them correspond to the shape of utility subsequently found within neoclas-sical economics. Second, the supposed quiddity of neoclassical utility comes from the formal notion of the ‘field’ in 19th century physics, which is a virtual field of energy suffusing a commodity space, rooted in the (unspoken) identity of the otherwise ill-specified individual agent. It is frequently overlooked that this format of ‘utility’ is merely a synecdoche for the larger set of psychological attributes of the indi-vidual—the conflation of utility with psychology tout court is one of the persistent bad habits of the neoclassical tradition, that is, when it is not denying any allegiance to psychology whatsoever. The fact that neoclassical economists have never been seriously committed to any real historical school of psychological theory (and that includes the modern so-called ‘behavioralist’ variant) should signal that endless ar-guments over the veracity of ‘economic man’ have functioned as little more than a red herring throughout the history. Third, there was the contingent historical phenomenon that numerous people (especially prior to World War II, and in the context of arguments over ‘welfare’) tended to conflate ‘utility’ with earlier substance theories of value: in other words, they approached utility as something you could add up, both over people and over time, to arrive at some aggregate notion of growth or progress. This has been a confusion which has never en-tirely been banished from economics, probably because the simpler ‘substance’ concept is much easier to convey in popularizations and in political debates.


PP: Let’s move on to neoclassical theory more generally. In More Light than Heat you show how contemporary neoclassical economics basi-cally just took over the conceptual apparatus of 19th century physics – and pretty much took it over directly. From reading the book it seems to me that the most important idea taken over was from energetics. This was the idea that there is a conceptual field across which forces of varying quanta are distributed. Many of us are familiar with this idea in physics, could you outline very broadly how it was applied to economic theory?

PM: To a greater or lesser extent, the first three generations of neo-classical economists took their own understanding of the received model of the energy field and changed the names of the variables to turn it into a theory of price. As one might suspect, the earliest imita-tors such as Jevons, Walras, Pareto and the like were comparatively deficient in their understanding of the fine points of the physics and the mathematics, so they made a number of gaffes which tended to further confuse the issue down the line. I think the best neoclassicals of the third generation of the 1930s, such as Harold Hotelling and Henry Schultz, produced the superior concordance, as I have sought to demonstrate in my joint papers with Wade Hands. There they trans-lated spatial dimensions into commodity space, potential energy into utility, forces as prices, points as commodity bundles, motion in space as the analogue of trade, and (the tricky part) kinetic energy into the budget. The imposition of the conservation of energy does not translate so well into the economy, however; and as Hotelling dem-onstrated, the full translation only really works for the special case of a fully income-compensated version of demand theory. Nevertheless, the history shows that motives other than faithfulness to the model originally dominated the mimicry, since the point-by-point plausibil-ity of the ‘correct’ translation took over seventy years to become sta-bilized amongst the neoclassicals. In other words, no one had started out in the 1870s by remarking how astoundingly serendipitous was the correspondence between energy physics and a utility theory of prices; rather, they started out with the conviction that the imitation of physics would provide the deliverance of political economy into scientific economics, and left the messy implications to later genera-tions to clean up.

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I have often had orthodox economists say to me about this is history: who cares where the early neoclassical economists got their original mathematical inspiration from? Even if it really was physics, it rap-idly got turned into dedicated economics, such that the genealogy from physics no longer mattered. My response is at least two-fold: First, far from making things immediately clear and transparent in the 1870s, it took four generations of increasingly sophisticated people trained in physics and then recruited into economics to clarify all the implications of treating trade like motion through commodity space, and discovering (for instance) how notions of ‘dynamics’ had been severely constrained by the original appropriations. Physics thus still served as the Rosetta Stone which continuously governed the intel-lectual trajectory of the neoclassical school. Secondly, by the time we arrive at the mid-20th century, the new recruits were struck concern-ing the extent to which neoclassical economics seemed mired in ‘old-fashioned’ physics. John von Neumann, after reading Paul Samuelson, sneered that neoclassical price theory was the sort of mathematics that had been cutting-edge at the time of Newton. This invidious comparison resulted in further waves of influence from the natural sciences, which is the subject of some of my later books and papers. It is hard to think that this love/hate relationship with the natural sciences would have persisted so long without the original primitive appropriation of the energy model.Economists love to preach bygones are bygones; but they can only persevere in their faith because they have banished intellectual history from their academic bailiwick.

PP: My guess is that many readers are going to be shocked to hear that neoclassical economics began by essentially copying 19th century energy physics. I think many people are calling into question the sci-entificity of neoclassical economics these days, but I don’t think that many outside of a very small sliver of economists are aware of these origins.After reading your More Heat than Light I began the slow process of trying to understand what the implications of this theoretical borrow-ing were. I’ll be honest, after reading the book, I began to see the old energy theories everywhere – in psychology, most especially Freud; in philosophy, I suppose Nietzsche was a major figure in this regard; and so on. What I concluded was that this energy framework was, in


fact, the major ‘episteme’ of the age – that is, the main organizing principle of all knowledge since around the mid-to-late 19th century.So, what I want to ask you is this: what implications do you think your findings have for economics in general and neoclassical economics in particular? Do your findings call into question certain aspects of the discipline?

PM: Your question about ‘epistemes’ indirectly invokes Foucault, so let me begin there. However much I now think that Foucault was at best an indifferent historian, and his accounts of philology, natural history and political economy in Les Mots et Les Choses were somewhat strained, nevertheless, he was an amazingly suggestive thinker. (That goes as well for his late lectures in The Birth of Biopolitics on Neolib-eralism.) His early ‘structuralist’ phase still holds great resonance for my work, in that I concur one can unearth deep metaphors/exem-plars throughout intellectual history that transcend parochial disci-plinary histories but span certain delimited chronological eras. Often they underpin notions of the natural and the social simultaneously – think of ‘energy’ in the late 19th/early 20th century; stochastic ran-domness from the 1860s to the late 20th century; and ‘the computer’ from World War II down to the present. Frequently they exist simultaneously as concrete things and abstract concepts; in the old phrase, they are “good to think with”. One thing that stands out from the history of the sciences is that cultural enthu-siasm often wanes for them after a pronounced period of intellectual fructification, but they never entirely die out or get openly repudi-ated. I tend to think of them as going into remission, hard cysts em-bedded in the musculature of our intellectual heritage. So even the oft-derided ‘stage theory’ approach to history doesn’t fully capture what goes on here.I would like to suggest that these deep structures really do exist, and are not convenient jury-rigged hooks upon which to hang some post hoc idiosyncratic periodization of intellectual history, say, like ‘Ameri-can exceptionalism’ in Dorothy Ross’ Origins of American Social Sci-ence, or ‘fragmentation’ in Daniel Rogers’ Age of Fracture. In the case of these serious epistemes, you can witness critical thinkers using the complex metaphor in diverse and fruitful ways: trying out novel implementations of mathematics, or exploring utterly unprecedent-

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ed formats of empiricism, or finding unity of approach in aspects of their subject never previously suspected, stumbling upon inspiration in far flung separate traditions. In this sense, C.P. Snow had it precise-ly backwards: these epistemes demonstrate why the ‘two cultures’ mantra often falls short of the mark.The tougher question is what we should make of these epoch-making trans-disciplinary events. Clearly they are often so Protean and per-vasive that it is hard to write them off as ‘correct’ or ‘wrong’ in ret-rospect. Moreover, I doubt we could renounce all recourse to such subterranean figures of thought, even if we tried. So, to circle back to your concrete question, the mere fact that early neoclassicals got their inspiration from the energetics bandwagon in the 1870s can-not itself stand as an indictment of the school. That would commit the genetic fallacy, and falsely presume that economics could have operated otherwise, hermetically sealed off from the larger culture. My opposition to modern neoclassical economics derives rather from what they have subsequently done with this inheritance, as indicated in my previous answers; and from the observation that subsequent generations refuse to acknowledge a long tradition of critical inquiry into the flaws of the metaphor, its attendant mathematics, its empiri-cal archive, and the ongoing changing outlines of what means to en-gage in scientific inquiry. In many cases (I think here of Robert Lucas, for instance, but also Paul Samuelson) all historical sophistication has been suppressed in favor of a fairy-tale that the mathematics by itself dictates all conceptual innovation in the school, that markets are on-tologically identical throughout human history, or that recourse to maximization has been handed down from the Mount inscribed on indelible stone tablets. When the only defense of clinging to one of these epistemes is rank obscurantism, then something is rotten in the state of Cathexis.

PP: So, do you think this seriously undermines the discipline of eco-nomics generally? After reading the book I came to think that pretty much all microeconomics was probably bunk. I’d seen all the em-pirical falsifications before, but after reading the book I came to see neoclassical economics as a truly arbitrary logical construction. Only macroeconomics – because it studies such broad and simple mecha-nisms – seems to me to make any sense, and even then its theoretical limitations seem immense. How did you come to view economics as


a discipline after you’d made these discoveries? Do you think most of it is just intellectualized waffle?

PM: I start from the pragmatist position that science is a set of poli-cies and procedures, and not a catechism engraved on ancient tablets handed down from sainted progenitors. Conducting dangerous liai-sons with strained natural science metaphors certainly can give one qualms, but that by itself is insufficient to write off an entire research program. After all, the natural sciences have intermittently appro-priated economic metaphors as well. I advocate intellectual history and science studies precisely because one needs to look carefully at what various programs do with the cultural epistemes with which they are saddled in a particular historical era, ranging from taking internal criticism seriously to weighing the consequences for empiri-cism, scope, research stratification, behavior towards rival programs, ontological resonance with the other sciences, and so forth. Evalua-tion requires taking the long view.I have to confess that, on those grounds, I have come to regard mod-ern neoclassical microeconomics as hopelessly confused and corrupt-ed. Of course, no school ever enjoys immaculate conception. As an episteme plays out, you expect serious adherents to eventually search for logical inconsistencies and empirical embarrassments, and to dal-ly with immunizing stratagems, and that has indeed happened in the neoclassical project. It started out almost immediately in the 1880s as a nagging question concerning whether so-called “utility” was real and measurable, and therefore the appropriate construct upon which to base the theory. There have been two distinct eras of definitive disproof of the field conception of utility—the first grounded in econometric estimation in the 1930s-50s, and the second grounded in later controlled psychological experiment. The response of neo-classical economists to each has been to simply wish them away—the first with the later 20th century doctrine (passing under the rubric of ‘revealed preference’) that neoclassical economics could simply alto-gether dispense with the utility concept it had previously embraced, and the second, in the guise of more recent appeal to ‘behavioral eco-nomics,’ as if the theory had ever been seriously based upon orthodox psychology. I think the real Gotterdammerung for neoclassical micro came in the 1970s, when the Sonnenschein/ Mantel/Debreu theo-rems demonstrated there was no logical connection between Wal-

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rasian general equilibrium and what is conventionally taught as the “theory of demand”. (I might add that Wade Hands and I have traced this latter debacle directly to the peccadilloes of the original phys-ics model.) This leaves aside numerous lesser refutations of crucial component parts of neoclassical micro, such as the ‘empty economic boxes’ controversies of the 1920s, the collapse of plausible dynam-ics in the Walrasian tradition in the 1960s/70s, or the Cambridge Capital controversies of the 1960s, or the utter failure of the Nash equilibrium refinements project of the late 20th century, the Gode/Sunder results of the 1990s, or the no-trade theorems of the 1980s. I decline to comment on the train wreck of 20th century neoclassical macroeconomics, which is nothing other than a prolonged walk of shame. In every single case, the orthodox discipline chose to avert its eyes (and, as a corollary, banish all intellectual history) in the inter-ests of dogged persistence in promotion of their theory as the most thoroughly tested and logically sound artifact in the entire history of the social sciences. It seems to me that the profession has come to mistake mimicry of ‘science’ in its most superficial aspects (use of mathematics, ceremo-nial appeals to ‘test’ with a wink and a nudge, denial of normativity, spurious generality, exclusion of the lay public) to the detriment of the ways that more serious sciences fearlessly confront their most thorny deep-set problems and inconsistencies. A parade of refugees from the natural sciences passing through the profession has said much the same thing; I have come to agree with them. A century and a half track record seems sufficient to demonstrate that neoclassical economics will never change in this regard; it is hopelessly addicted to the most superficial scientism.

PP: But what is it about neoclassical economics that gives it this abil-ity to deflect criticism so easily? I mean, right now we’re seeing ex-periments calling into question the whole premise behind modern physics and while most physicists are a little nonplussed about the whole debacle, they’ve certainly pricked their ears up. Neoclassi-cal economists, on the other hand, have this remarkable aptitude for intellectual repression. Why do you think that is? And what do you think it says about the research program itself?


PM: This ability of neoclassical economics to resist criticism inter-nally and externally, and to displace other schools of thought, has been one of the standout phenomena which has driven my intellec-tual career, and I have never felt I have settled upon a really satisfying comprehensive answer. The continuous expansion over a century and a half implies that conditions which come into play in one era have probably been supplanted by different defense mechanisms in a subse-quent era. The imitation of physics that we have discussed was clearly important in the earliest phases of the history; but other factors in-tervene after World War II. And then there is the question du jour of why the neoclassical orthodoxy has apparently emerged unscathed from the current crisis. I have returned to these thorny questions once more in a book I am working on now, and so I will unceremoni-ously make a list, with full awareness that there is no space here to supply documentation to underwrite these bald assertions. When the project is not resorting to unabashed tautology a la Stigler/Becker in order to deflect intellectual criticism—everyone is maximizing some wispy imaginary something we just made up, no matter how much the evidence points in a different direction – then I think we must look to larger structural and cultural reasons for the unreasonable resilience of neoclassical theory.Here I think World War II was a major watershed, since it marked the divide where neoclassical economics initially defeated its rivals for dominance, first in the US, and then in Europe. (The British case is an outlier, and can’t be covered here.) What accounts for this phased victory? In Machine Dreams I explore the thesis that it was the wider transformation of the funding and organization of science by the military, and then a diffusion of that system to Europe through the postwar reconstruction of Europe, NATO, and so forth. Phys-ics became king, so a social physics held a special cachet. One fac-tion of neoclassical theory, the Walrasian variant, became intimately bound up with the novel postwar discipline of operations research (aka systems analysis). I do not say this was the only factor, but it ex-plains an astounding amount of the intellectual evolution, including the belief that Walrasian general equilibrium serves as the Bourbakist core of the whole project, the impact of the computer upon visions of the economy, the rise of game theory, and much more. The Cold War mindset turns out to have been a subsidiary to this larger trend, in that it elevated neoclassical economics as the preferred riposte to Marxism, and shut down certain forms of internal critique. Military

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subvention, government contracts, plus the expansion of the postwar university provided a shot of steroids to neoclassical economics.However, that effect has become pretty circumscribed as we get closer to the present. The Cold War has ended, and the military has more or less withdrawn from science funding and management. Its place has been taken by what I think of as the neoliberal transforma-tion of knowledge production, and the economy in general: priva-tization, commercialization, outsourcing and Wikification. These are the topics of my most recent books, The Road from Mont Pèlerin and ScienceMart™. While there is nothing inherent in the original neoclas-sical model which dictates a neoliberal politics, the economics pro-fession has itself become noticeably more neoliberal since 1980, and this constitutes another bulwark against its critics. To a great extent, neoclassical economists have become the avatars and prophets of the newly rationalized, privatized and reconstructed modern university; turfing the economists out now would mean repudiation of the mod-ern university as the putative engine of economic growth. There is also a sense in which the financialization of the economy has fortified the neoclassical orthodoxy, since they were intimately involved in its conceptual foundations, inventing CAPM and Black-Scholes, for in-stance. Neoclassicals have never been bashful about currying favor with the rising hegemon as new lavish patron; it helps that they are also the first resort for intellectual justification of the modern neolib-eral era where finance displaces manufacturing.Here I am sure my detractors will object that I am treating orthodox economists as far too monolithic and lockstep a thought collective; indeed, there is a literature (John Davis, Diane Coyle) which suggests that it has become more capacious and intellectually adventurous of late. (I don’t buy that, by the way.) I concede I am dealing in broad-brush generalizations for the purposes of this interview, even though I have argued in the past that the neoclassical tradition itself often has maintained parallel ‘sub-schools’ of varied contradictory doctrinal content as a way to run rings around their rivals. (In the Cold War era, that would have been Chicago, Cowles and MIT.) I also concede that one must examine the cultural situation on the ground to be more precise about who qualifies as an ‘economist’: Marion Four-cade’s Economists and Societies is a key work that demonstrates how a British neoclassical diverges from an American neoclassical and a French neoclassical economist. She even explains how national disci-


plinary fragmentation opens up more space for heterodoxy in France vs. America, even though the opportunities for employment of econ-omists are more varied in the US. These are all caveats one would register in a serious response to the question.And then there is the current crisis, with the apparent ability of the neoclassical profession to shrug off a tsunami of contempt rolling in from the larger public. People have begun to take note of some of the worst conjunctions of barefaced hubris and crass venality. The movie Inside Job was just one harbinger of a much more pervasive phenom-enon. If one takes the simplest possible proposition – say, that the raising of the debt ceiling by an August 2011 deadline would serve to stave off a disastrous financial crisis and employment contraction pursuant to a technical default of the US Treasury on part of its debt – then it was a snap to get 162 economists including two Nobel winners to sign a statement denying that proposition.2

If this continues, this looming travesty will be the most significant phenomenon requiring careful explanation in the whole history of economic thought. Neoclassical economists in the 1930s also initially dug in (Irving Fisher’s antics were famous), but were less able to resist scorn back then because they were less central to economic struc-tures, and were provided less cover by well-heeled institutional sup-port. If orthodox economists come through this crisis smelling like roses, under the Robert Barro theory that as long as they keep paying us we must be right, then we will have entered a new enhanced era of Doublethink.

PP: In more recent work you’ve shown how modern neoclassical economics took over many aspects of the cybernetic research pro-gram. Why did the two research programs meet and did borrowings from cybernetics buttress neoclassical economic theory at all?

PM: In the 1990s, a number of economists responded to my earlier histories by insisting that neoclassical economics had progressively shed its physics background and become something entirely different, as evidenced by the rise of game theory, the absorption of experimen-tal economics, and importation of concepts from more recent scienc-

2 See http://netrightdaily.com/2011/06/150-economists-call-for-spending-cuts-that-exceed-debt-limit-hike/ . The Nobelists were Robert Mundell and Vernon Smith. Not unexpectedly, the petition was arranged by a neoliberal think tank.

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es. Neoclassical economics had reinvented itself, they said, negating history. I took their critiques to heart, and in looking into the period of the 1940s onwards, I had to agree that there had been a massive sea change in the way that neoclassicals portrayed what a market really was and how it accomplished its magic over the course of the 20th cen-tury. The short version would be they slowly relinquished the earlier fundamental image of a market as allocating scarce things between people with given needs, restoring ‘equilibrium’, and replaced it with an image of The Market as the greatest information processor known to mankind—in other words, the heart of market operation was pos-ited as the fact it always knows more than you could ever hope to di-vine: we could only prostrate ourselves before its awesome wisdom. This shift was subtly pervasive throughout all subfields of economics, from Becker’s ‘human capital’ to the efficient markets hypothesis to rational expectations to the Nash equilibrium to the bizarre notion that there could be a neoclassical ‘economics of science,’ and beyond. Nevertheless, this transformation was also the result of stubborn imitation of the natural sciences, but only now attention had been shifted to the most consequential development of the second half of the 20th century, the (re-)invention of the digital computer and its subsequent conceptual Long March throughout the rest of the natural sciences. Economics was still mimicking Nature, but a Nature more nearly of our own design. The first part of Machine Dreams assays the ways that the history of the computer is poorly understood as merely a technological achievement; it has recast vast swathes of physics, the gene, synthetic chemistry, and much else in its wake. In a slogan, computation was the energetics of the late 20th century, an episteme so pervasive we hardly notice it. I have indicated this was intimately related to military funding and imperatives during the Cold War in a previous answer.There is another way in which this dependence upon the computer to elevate the scientific status of economics has shadowed the earlier dependence upon energetics: the conceptual innovation was incom-plete, and rife with errors. Machine Dreams shows in detail how ele-ments of the neoclassical heritage stood in conflict with the formal imperatives of computational theory: for instance, there is a litera-ture that shows optimal choice over a standard utility function is Tur-ing non-computable (a technical notion). As usual, the supposedly rigorous neoclassical economists just ignored the contradiction, and


bulled ahead with their wonky metaphors. They also became a bit con-fused where the uber-computer actually resided: was it lodged in the head of every market participant (thus the endless boring disputes over ‘ratio-nality’) or was it really a free-standing device, instantiated in the rules and algorithms of real markets. At the end of Machine Dreams, I suggest that a really thorough-going understanding of the computer metaphor could serve as the intellectual basis for a revived institutional economics, which would be more than a match for neoclassical economics on a formal ana-lytical level. I have published more on this since, using it to discuss current events like the financial crisis.Expropriation of computational science did buttress the legitimacy of neoclassical economics through mimesis, but I think the more significant consequence was that it rendered neoclassical theory more neoliberal: af-ter all, the market-as-information-processor became the major argument against the viability of socialism, starting with Hayek, but now ingrained in every economics textbook.

PP: Yes, I was going to say that this all started with Hayek. To the best of my knowledge this is a strange and probably relevant ‘micro-history’. Hayek was probably the first to imagine the market as a giant information processor. And he tried to apply this model to everything around him, which seems to foreshadow the adoption of the ‘informational episteme’ of the other sciences. The most tangible example of this was Hayek’s bi-zarre attempt to form a neurological/psychological model that mirrored his economic ideas.So, modern developments in economics really had their roots in the Aus-trian School (despite their whining that they’re largely ignored). Perhaps you could say something about this.

PM: Hayek admits somewhere that his abortive Theory of Capital was pat-terned upon his earlier theory of mind as a sort of connectionist associa-tive machine, conceived when he was a student. So, perhaps contrary to what you say, for Hayek, it was his vision of the economy that mirrored his earlier inchoate ideas about the mind, rather than the other way round. It was thus a short leap to imagine a scale-free general theory of learning, which can extend from the individual mind to the transpersonal market. This permitted Hayek to propose the avant garde notion that the market was itself an information processor, predicated upon a comparison with his version of the mind. By the 1950s, Hayek realized that the early cy-

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bernetics crowd was exploring similar themes, so he reversed his earlier philosophical position that imitation of the natural sciences was dangerous for economics, and sought to appropriate their credibility for his brand of Austrian economics. It is worth remembering that not all the Austrians, nor even the majority of Mont Pèlerin members, were willing to follow him down that road.I very much doubt many leading neoclassicals were paying much attention to Hayek when he underwent this conversion on the road to Damascus (Hicks may have been the outlier here); but as the neoclassicals increas-ingly absorbed computational and cybernetic ideas, pursuing their own inveterate physics envy, conveniently waiting for them there was this neo-liberal conception of the market which had already made some inroads: at Chicago, for instance, or at the Cowles Commission, which thought it could adopt the information processor notion minus the politics. It had also caught on among some members of the cybernetic community (which is one reason Hayek is still so popular in Silicon Valley). Hence it is an interesting question whether Hayekian Austrianism should be included in the genealogy of modern neoclassical economics, or if instead, both Austrians and neoclassicals had more or less latched onto the computer in parallel as the premier icon of modern scientific research in the late 20th century. By the 1990s, it no longer mattered, because the profession’s politics had moved closer to the neoliberals as well.

PP: Which brings us neatly to the Mont Pèlerin Society, a society which you have done some work on. What was the Mont Pèlerin Society and what importance do they have in the history of economic thought?

PM: I have always been fascinated by the institutional structures which underpin and promote the relative success of various intellectual schools and their cherished ideas. There is a tendency in the history of economic thought to treat epistemology the same way neoclassicals treat market choice: it all boils down the likes and dislikes of the isolated individual, maybe mediated by innate logical inference, and the social outcome of validation is nothing more than the gross aggregation of all those inef-fable mysterious motives. It portrays the act of knowing as an unmedi-ated encounter of the pristine mind with the pure transparent idea. This accounts for the popularity of the highly over-used Keynes quote: “mad men in authority are distilling the frenzy from some academic scribbler of a few years back.” By contrast, I believe most research and most think-


ing requires a full complement of support structures simply to make an impression on sufficient numbers of people, such that they might persist long enough to become a ‘school’, not to mention a Zeitgeist. Since ideas readily succumb to intellectual entropy, serious effort is required just to pass them down in a relatively invariant format. Texts, printed or other-wise, are not enough (which is why explications des textes are poor intel-lectual history).Thus the success of neoclassicism in America has a lot to do with the state and the military, and their affiliated organizations on a smaller scale such as the Cowles Commission, the MIT economics department, the RAND corporation, and so forth. But there was a different version of neoclassi-cism, that characteristic of the postwar Chicago school, which was dis-tinctly divergent from those manifestations, and therefore required an alternative institutional account of its path to dominance. To that end, my collaborator Rob van Horn and I began looking into the post-World War II Chicago School, and were rapidly led to uncover a different story than the usual tale of pre-war continuity from Frank Knight to postwar Milton Friedman and George Stigler. To put it bluntly, in 1945 there was no ‘Chi-cago School’ that any modern would recognize, and yet by 1947, some external interventions had put the solid foundations in place.The full story can be found in The Road from Mont Pèlerin, so I will just make some bald statements here. The Mont Pèlerin Society was founded by Friedrich Hayek and others in 1947, funded by a number of corpo-rations, banks and foundations, in order to revive the style of political thought which even they called “neoliberalism” back then. It was intended to be a transnational and transdisciplinary debating society, at least at the inception. At the same time, Hayek was consulted by Henry Simons and others at Chicago to help start up a subsidiary to Mont Pèlerin called the “Free Market Project” at Chicago, which eventually involved payment of even the salaries of figures like Aaron Director and Hayek himself. The density of connections between early Mont Pèlerin and postwar Chicago are nothing less than stunning, at both the staffing and conceptual levels: this is why I say that the birth of the Chicago School should be understood as the opening of a franchise of Mont Pèlerin on the shores of Lake Michi-gan, rather than vice versa. All the major Chicago economists of that gen-eration were Mont Pèlerin members: Friedman, Stigler, Aaron Director, Allen Wallis, Gary Becker, and Richard Posner. Of course, neoliberalism should be understood as an intellectual movement initially separate and distinct from neoclassical economics -the presence of a number of key Austrian economists in Mont Pèlerin would signal that - but the marriage

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of neoliberal political doctrines and neoclassical economics now com-monly associated with the Chicago school was buttressed and facilitated by the organizational support of Mont Pèlerin. My collaborators and I have argued that, from the late 1940s to possibly the 1990s, Mont Pèlerin stood poised at the core of an elaborate thought collective that encompassed think tanks, foundations, university affiliates and vested corporate interests, all dedicated to the elaboration, promo-tion and spread of neoliberal doctrine throughout the world. Anyone seeking to understand the triumph of neoliberal notions and politics from the 1980s onwards would be sorely mistaken to ignore the import of the Mont Pèlerin Society. And to address what has become a rather trite ob-jection: this is not about conspiracy theories. Every successful economic doctrine has some sort of institutional thought collective to thank for its success. You just have to know where to look.

PP: In your recent work you’ve become interested in how economics in general and neoliberal economics in particular has come to influence the practice of science itself. Could you say something about this?

PM: Neoliberalism is much more than some desiccated caricature of “market fundamentalism”; it is a rich and textured philosophy of life. Sometimes I try to reduce it to 13 commandments; but here I will just point out that if you really believe that The Market is inherently a better information processor than any actual human being, and is just smarter than any boffin (which is why neoliberals sneer so much at intellectuals), then it follows fairly directly that you will oppose the entire inherited infrastructure of state-organized scientific research characteristic of the Cold War era. The neoliberal destruction of the most successful science base in the history of the world has been one of the great tragedies of our lifetime, and is the main topic of ScienceMart. That is why I view the mantra that America’s wonderful superiority in science and invention can save our economy from terminal decay with rueful despair.Hayek held the perceived alliance of scientists and socialists in the 1930s in great contempt, which is why he formed the ‘Society for Freedom in Science’ even before he founded Mont Pèlerin. Thus the commercializa-tion of the academy and of science is the consequence of a Long War of Attrition begun 70 years ago. It began slowly, with the rise of the neolib-eral think tank complex and the growth of the “merchants of doubt” so wonderfully documented by Naomi Oreskes and Erik Conway. It took


root with a neoclassical “economics of science”, which is predicated upon the audacious premise that economists bear any competent understand-ing whatsoever concerning how best to organize science. It gained ma-jor victories with the global strengthening of intellectual property, the passage of the Bayh-Dole Act, the Chakrabarty case opening the door to patenting of organisms, the erosion of the previous belief that the results of science should belong to everyone, and the transformation of higher education from a preparation for citizenship into a personal investment in ‘human capital’ (one of the most nefarious neoliberal concepts of the last 50 years). Milton Friedman bequeathed his fortune to a foundation dedicated to the destruction of state provision of education. Most Ameri-can corporations shed their in-house research units in the 1990s, in favor of contract research outsourced to universities and cheaper foreign units: Goodbye Bell Labs, IBM Yorktown, Xerox Parc and the whole roster of hallowed institutions. Patents have now become more important than published papers in the tenure cases of academic scientists in many fields; that is, where tenure has not yet been abolished.It is almost impossible to get most people to comprehend just how hob-bled and corrupted science has become in consequence. I shall just men-tion a few indicators, described in detail in ScienceMart. Research has been hamstrung by IP, and more by MTAs than patents. Pharmaceutical and biomedical research is so corrupt that over 40% of articles in reputable journals are ghost-written and ghost managed, with all that implies about burying research that harms the bottom line. The sector is awash in mon-ey, but fewer and fewer really novel drugs have been found nevertheless. Patents have exploded worldwide, but the OECD assets that patent qual-ity has fallen pretty much everywhere. Most biotech firms resemble Ponzi schemes, predicated upon getting bought out by Big Pharma or enjoying an IPO before they inevitably run out of money, because research by itself rarely can make money. Neoliberal think tanks fill the air with junk sci-ence concerning global warming, oil spills, fracking, GMOs and a whole host of other business-sensitive topics. The average citizen now thinks anything they want to believe deserves ‘equal time’ with the teaching of science. And, perhaps most damning, the aggregate number of scientific papers authored by Americans has been falling for two decades. There are numerous symptoms of decline, but cheerleaders of privatized science like the major journals Science and Nature and the American Academy for the Advancement of Science keep singing the Pollyanna chorus.The biggest apologists for this modern travesty have been the orthodox economists, who have written literally thousands of papers purportedly

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demonstrating how the market has quickened research, shuttled more findings into the commodity stage, revived the modern university and generally picked winning ideas with greater precision and perspicacity. During an interview with Boston Public Radio, the announcer kept say-ing: how can we accept that science is suffering, when Kendall Square is looking so prosperous? It reminds me of the ways Larry Summers used to disparage academics who warned of a financial crisis.

PP: Finally, you are currently doing research on the history of the Nobel Prize in Economics. Many of us have long known that this was a ‘fake’ prize initiated by the Swiss central bank, but I think we’re all pretty sketchy of the history. Perhaps you could enlighten us with a broad outline of what you’ve found so far?

PM: I am currently collaborating on a book with Avner Offer and Gabriel Soderberg on the Bank of Sweden Prize in economics, and I don´t want to give the game away before it hits the bookstands, so let me just suggest a few of the major findings. First off, the timing and nature of the insti-tution of the Prize has much less to do with the intellectual ascendancy of economics and much more to do with the internal politics of Sweden in the 1950s and 1960s, particularly the drive by the Bank of Sweden to assert its political independence from democratic accountability. So-derberg has done profound work on the political context. Elevating the discipline´s profile would also buttress their claims to special expertise, and therefore the ability to dictate what was “best” for their economy. Not everyone in Sweden was in favor of this ploy, including the Nobel family themselves, who didn´t appreciate the attempt to appropriate credibility from the long-standing Nobel Prizes. We also dabble in some examination of the composition of the Prize committee, and notice issues of Mont Pèlerin members there and as Prize recipients. Rather than follow the usual People Magazine ‘Beautiful Mind’ approach to the winners, we also want to explore sociological issues of the impact of the Prize: did it shift the profession in certain directions? Clearly it helped cement the domi-nance of the American neoclassical orthodoxy in Europe, and elsewhere. Offer has explored some bibliometrics to characterize various types of winners. And then, there is the curious phenomenon that journalists treat the Prize as a first class ticket to status as a ‘public intellectual’, though few winners are adequately equipped to seriously perform that role. I do think the most recent Prize was the clearest signal yet from that stratum


that the economics profession has now decided that the crisis will prompt no recantations or apologies, and that they expect things to continue as if nothing unusual has happened. The Prize thus functions as one more brick in the wall, whatever the opinions of any individual winner.

From Episteme to Institution: An Interview with Philip Mirowski

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