I’ll paraphrase something I contributed to an economics discussion today.
One must go outside the economics profession to understand clearly what is wrong with it. Matt Taibbi has been reporting on the incestuous relations between schools of economics and financial firms for years now. He has been reporting on the influence peddling and de facto bribery that the finance sector has used to buy the USA’s congress and the office of the president of the United States.
The criminal finance sector has bought protection against being prosecuted for massive felonies. They have done everything from deliberately defrauding customers on a massive scale (because it was profitable) to massive forgery of documents (e.g. robosigning). This president has exerted himself mightily to see to it that no investigation seriously starts. He has control of that directly at the federal Department of Justice through Mr. Holder. He developed an agreement with the states to coerce them into stopping prosecution efforts by state attorney’s general. That $25 billion package (de facto bribe) to states when the states were starving for cash worked. That is how the USA introduced banana republic law to protect the wealthiest criminals with the power of the highest office while holding ordinary people to the letter of the law. The USA is no longer a rule of law nation. That is the fact of what the United States has become. One law for fantastically wealthy criminals. Another law for everyone else.
It is not so much that restriction of publication in top econ journals to the elite schools is tolerated as that going to the “right school” and pleasing the right professor(s) can set a person up to become fabulously wealthy. Those schools that populate the top of financial firms in New York and London then reap the rewards back in the form of support from their alumni, and the circle is complete.
That incestuous circle is why publishing in a top economics journal today has absolutely nothing to do with being correct. That fact is no more clearly shown than in the rampant criminality of the finance sector today, particularly in the USA. That is why we see the zombie ideas of disproven economics continuing to be taught. That is why we see those rubbish ideas that have been proven false still written in the top journals as if they were respectable. That is why we see people like Steve Keen unable to publish in the high impact journals. It is because the rubbish spewed out by those at the elite schools justifies policies that keep the financial criminals in power, despite the fact that they are sending the globe down the road to war by destabilizing the financial sector.
In the long-term this situation may correct itself. I certainly hope so. But it won’t be by accident. I fear that history tells us it will be war on a global scale that settles this matter. We in the USA tend to think that the good guys always win. Things like this have happened in other fields. For instance, Mandelbrot was unable to publish in the top journals of mathematics. His seminal work was, therefore, published in what were then minor journals. Mandelbrot was still bitter about it when I had lunch with him in 2004. But those lesser journals did get a bump as a result.
Unfortunately, economics has far greater impact on the world than Mandelbrot’s mathematics. (Except in an indirect way through chaos theory perhaps.) I no longer think of economics as the “dismal science”. First, it is not a science, it is a grab bag of methods of interpreting the world. Mathematics, computing, psychology and sociology are not sciences either. But, I could let that pass since nobody seems to care.
Second, there is no more dismal science than epidemiology, which accounts for almost everything in terms of deaths. Instead, today I think of economics as the “criminalized science”. There are honest and bright economists, yes. But a hard core of the profession has been taken over to justify the rapacious actions of criminals. The profession has been invaded by a generation of fakes who adhere to the economic pornography of Ayn Rand’s sociopathic raving. Those fakes take the sociopathic Ayn Rand rant position first, then they find a way to justify supporting what is necessary to implement it.
We see the results. Greenspan has been the most influential of them in a direct sense.