↳ Economics

March 19th, 2019

↳ Economics

Ideology in AP Economics

When the media talks about ideological indoctrination in education, it is usually assumed to refer to liberal arts professors pushing their liberal agenda. Less discussed is the very different strain of ideology found in economics. The normative import is harder to spot here, as economics presents itself as a science: it provides an empirical study of the economy, just as mechanical engineering provides an empirical study of certain physical structures. When economists offer advice on matters of policy, it’s taken to be normatively neutral expert testimony, on a par with the advice of engineers on bridge construction. However, tools from the philosophy of explanation, in particular the work of Alan Garfinkel, show how explanations that appear purely empirical can in fact carry significant normative assumptions.1 With this, we will uncover the ideology embedded in economics.

More specifically, we’ll look at the ideology embedded in the foundations of traditional economics—as found in a typical introductory micro-economics class. Economics as a whole is diverse and sprawling, such that no single ideology could possibly be attributed to the entire discipline, and many specialized fields avoid many of the criticisms I make here. Despite this, if there are ideological assumptions in standard introductory course, this is of great significance.

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November 9th, 2018

Banking with Imprecision

​In 1596, Spanish troops under the leadership of the Duke of Medina-Sidonia set fire to their own ships in the waters near Cadiz. The sinking of these thirty-two vessels was a tactical necessity: a joint Anglo-Dutch navy had annihilated the slapdash defenses of the city, driving the Spanish ships off to nearby Puerto Real. The Spanish had preferred to see their ships sunk rather than captured by the enemy. Cadiz itself was occupied and sacked, and its most prominent civilians were held for ransom. War, as the Spanish were acutely aware, was very costly. Later that very year, Philip II, King of Spain, would declare bankruptcy. 1

Though he was one of the most powerful monarchs of the era, it is difficult to sympathize with the sheer magnitude of the work with which King Philip II of Spain had to contend. Not only did he have to protect his Iberian possessions, but he also had to prosecute a war against the recalcitrant Dutch in the Low Countries, outmaneuver the Protestants in France, and maintain a bulwark against the Turks in the Mediterranean. 2

In their book, Lending to the Borrower from Hell, Drelichman and Voth have done a remarkable job of illuminating Spanish finance in the 16th century.Notably, the fiscal machinery underpinning imperial operations was managed mostly by a tight-knit cartel of Genoese bankers. Sovereign lending, astonishingly, allowed for a plethora of state actions in a time before instant communication. The foundations of empire rested on a relatively simple model: control certain streams of income and then borrow against them. The institutional origins of our modern sovereign lending come from this tradition. Dealing with uncertainty is an inherent part of this model – now as it was then. What is of use to modern scholars is how the same problem was conceived of and partly surmounted by our institutional forebears.

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