Contemporary economics is dominated by a hegemonic neoliberal theory that leaves little room for alternative approaches, even though it was unable to predict, among other things, the 2008 crisis. How can the survival of this unsuitable and dangerous theory be explained? ? Is this the proof that economic ideas are only discourses legitimizing the domination of one class over another? Or can we imagine that all the promoters of this paradigm are stubborn in their errors, against and against all the empirical data? Jacques Généreux, economist and lecturer at Sciences Po Paris, invites serious consideration of the stupidity hypothesis in his latest book, When economic bullshit takes power (Seuil, October 2021). Interview conducted by Lisandru Laban-Giuliani.

LVSL – Throughout your essays, one of your guidelines has been to patiently and methodically argue against the neoclassical and neoliberal theories that dominate academia and public policy. For what reasons can these theories be very seriously qualified as bullshit, nonsense or even economic bullshit?

JG – To put it simply: all the fundamental postulates of neoclassical economics, then neoliberal, taught in the major economics departments are false. Social and cognitive psychology as well as behavioral economics have demonstrated this, there is no longer any doubt about it. People are not rational calculators as these mainstream theories claim, but social beings with subjective interactions. However, human emotions do not exist in neoclassical microeconomics.

Since the starting assumptions are false, the conclusions are necessarily flawed. All the economic policies inspired by it, around the idea of ​​a self-regulated market, do not work. And for good reason: these markets do not even exist. In the real economy, there is no “market” where supply and demand meet to establish an equilibrium price every second. Such a functioning only exists on the financial markets. But, unfortunately for the theory of efficient markets, it turns out that where financial markets operate freely, disasters ensue. Self-regulation is a permanent automatic imbalance. The problem is that the logic of this financial market has colonized for thirty years a whole series of goods which were not financialized in the past. In this financial jungle, you can speculate on the future value of a grain silo, and thus starve people by storing it rather than putting it on the market. It is madness.

The theory is false, its postulates are false, its conclusions are contradicted each time by reality. We've known that for a long time. At this level, we can speak of bullshit to designate stubborn stupidity. Anyone can make a mistake, have a wrong model and take time to realize it. But when all the evidence is there...

LVSL – So your objective with this new essay, When economic bullshit takes power, was to understand why these theories remain in force despite having demonstrated their inadequacy?

JG – Indeed. I first want to clarify that there is no vulgarity in this book, even if the title might suggest it. Bullshit is a serious subject, more and more studied in social sciences [1]. sheer stupidity. Economic bullshit has two meanings: both this stupidity of mainstream economics and the colonization of economic logic in all social spheres, a logic of competition that makes us idiots. This book does not deal directly with economic theory or economics. political, even if it is a question of them as instruments of analysis. It is rather a book of sociology, anthropology, social and political psychology, bearing on the belief in economic theories.

My first goal is to show the importance of questions of intelligence and bullshit. My second is to understand how a whole generation of political, media, intellectual elites, graduates of the best universities, sometimes aggregated, sometimes even Nobel Prize winners, can believe in theories which we know scientifically and rigorously are false. There is a real mystery here.

The easy response of a certain part of critical thought was to deny the irrationality of the elites, saying that they did not believe in nonsense but in their interests. In this approach, these elites would be ready to defend their theories, knowing that they are false, to maintain the domination of their class. This is no doubt true for a number of selfish cynics who don't care about the community, the nation, the people, the world. But you can't follow the assumption that everyone is a bastard. Psychology and anthropology teach us that, as a rule, people are not bastards. People believe in what they are doing, they genuinely adhere to the ideas of their political parties. You can really believe in nonsense. This is the subject of my analysis.

LVSL – You expose a series of cognitive biases at the origin of our propensity for stupidity. When psychology is mobilized to shed light on social phenomena, such as beliefs in erroneous economic theories, there is a risk of thereby evacuating the historical determinants and social power relations that are hidden behind the said phenomenon. Are psychological and historical explanations compatible?

JG – They are absolutely compatible. Based on the work of psychology, I show how our intellectual functioning is not made to move spontaneously towards rationality and truth. We have an inclination towards stupidity. But my goal is not to say that everything can be explained by cognitive biases! This would erase historical and social phenomena. Quite the contrary. To integrate dynamic social forces into historical analysis, one must not have the same conception of the human being as the neoliberals who reduce people to rational machines! We must assume to open the black box of the brain. Neoclassical theories ignore psychology and anthropology. It would be ludicrous to reproduce their error. Critical thinking cannot content itself with making a history of material dynamic forces, forgetting that these material forces include human intelligences whose functioning and dysfunctions must be known. Moreover, those who invoke Marx to despise the role of ideas in history are mistaken. In the writings of Marx and Engels, ideas are part of material human reality and must be taken seriously.

In summary, I seek in this book to understand how changes in social relations, structures, economic systems, have more or less a tendency to favor intelligence or its opposite.

LVSL – So what are the social and historical conditions that have made this “economic bullshit” possible since the 1980s?

JG – Since the planetary generalization of an ultra-liberal capitalist logic, several transformations have destroyed the elements that favor intelligence. The logic of competition extended to all areas of social life is the cause of this epidemic of stupidity.

Social psychology shows us that our brain is made spontaneously to seek survival, success in social competition, to reason to show others that we are always right. So many cognitive biases that incline us to think the wrong way. But these flaws can become useful in certain social settings. Discussion between individuals holding contradictory ideas can lead to collective discoveries of a common truth and interest. This comes from the fact that we are very good at discovering the mistakes of others. Peaceful discussions between people who do not have a power rivalry between them can lead to collective intelligence. As soon as we are in a situation of rivalry, competition, the primitive brain takes over: we act like threatened prey, we are in the immediate and emotional reaction. In a word, rivalry makes you stupid.

In terms of social power relations, shareholders took over with the generalization of unbridled shareholder capitalism from the 1980s. From then on, they had full power to organize society according to their views and to impose the logic of competition, between individuals, between regions, between countries. There is the evil. Economic bullshit didn't take over because of human brain failure. It took power from an evolution in the balance of power in the 1980s, when those who had an interest in re-establishing the power of capital, which had been undermined for thirty years, succeeded in doing so. They impose that everything that was sheltered from the competition returns to the market, supposedly effective. Public services are subject to competition, health is propelled into a competitive logic, hospitals must follow the managerial model of private companies… Competition infiltrates everywhere and everywhere it produces stupidity.

LVSL – Paradoxically, the scientific field, which should be able to circumvent what you call the “meta-egocentric” bias by confronting the various theses with critical peer review, is not spared by this epidemic. How do you explain it?

JG – Precisely because of this competition for positions which has invaded the academic world to the detriment of scientific research. The logic of publish or perish which forces researchers to publish a certain number of articles each year is completely absurd. Einstein only wrote three or four important articles. This system does not value the quality of research and teaching at all. Researchers are evaluated on the number of articles published per year and the quality of reviews. However, in economics, the good journals that bring a lot of “points” are major American or Anglo-Saxon journals, all mainstream. These journals are closed to any kind of thought that would dare to criticize the foundations of the orthodox theoretical model.

LVSL – One of the central theses of your essay is that the slogan “president of the rich” does not suit Emmanuel Macron. You believe that he sincerely seeks to do the good of society as a whole, even if his policies ultimately serve the most advantaged. How do you arrive at this diagnosis? Why isn't he the “president of the rich” but the “king of the fools”?

JG – When I say that Macron is not the president of the rich, that does not mean that he does not have a pro-rich policy. No need to come back to this, it's obvious. Emmanuel Macron's policy is a caricature of pro-rich policy. "President of the rich" can be a slogan to denounce his policy. But if it is an analysis, if the thesis is to say that he deliberately pursues politics in the service of his class from which he draws his power, then this expression is incorrect. It would imply that he was elected by these rich people and that he is consciously working for their interests. However, the sociology of his electorate shows that he is not elected by the rich [2]. The majority of its electorate comes from a middle or even popular class and from intermediate professions. Senior executives, who earn more than €3,000 a month, vote preferentially for the right-wing candidate. He is not the preferred candidate of the rich, he was not elected by them. From then on, we can reflect on the reasons for his policy. I don't believe in motives. It is stupid to attribute to Emmanuel Macron a fundamentally malevolent intention vis-à-vis the poorest. You have to look at what he said. I became interested in his published writings before entering politics.

His course has never changed, despite his speeches during the first confinement. He is fundamentally convinced of the merits of what is called the policy of supply: there would be too many obstacles to individual initiative, to private investment, too much assistance which would harm the incentive to work, too many sectors where competition is insufficient… He never deviated from this neoliberal doctrine, despite the short-term changes to save the economy when everything was at a standstill. We know very well that these policies do not work: even the OECD and the IMF recognize that the reduction in employers' contributions, the liberalization of layoffs, among others, have no effect on unemployment and growth. If Emmanuel Macron was a malicious cynical who wanted to stay in power at all costs, he would have accepted the balance of power, rather than ideological stubbornness! An opportunist has no ideology. But he refused all power relations. Nothing makes him give in! At the Yellow Vests, he dropped crumbs, so that we do not question his logic and his ideology. If he only wanted to make sure he was re-elected, he might agree to make reforms that would be more pleasant for the people.

I try to show in this book that he is a real ideologue who believes he is invested with a mission: to succeed in implementing neoliberal reforms to make the country prosperous. He wants to be recognized for having had the courage to carry out his unpopular reforms which he considers salutary. He is not the president of the rich but the representative of a neoliberal ideology that sincerely believes in being in the public interest. We must also understand that we are not president alone, we do not govern alone. There are many people who support him by genuinely believing in this supply-side policy. We cannot assume that all the elected representatives of La République en Marche support this ideology out of individual interest. Besides, there are very few big bosses among these elected officials. The same is true of journalists and commentators favorable to his policy: they believe in its merits. We must take seriously the fact that most professors of economics, most journalists, activists, fundamentally believe in this supply-side policy. So they believe in nonsense. Hence the importance of studying stupidity.

LVSL – In terms of the ideological fight, how can the cultural battle be waged effectively when the adversaries have cognitive blinders such as you describe them?

JG – I don't have ready-made recipes. My approach is very Gramscian, to a certain extent. Like Gramsci, I feel at this moment in history where there is every reason to be pessimistic, given all the systemic pitfalls that are holding our society in one direction. We are not deprived of resources. The problem is that of managing abundance. Despite the fact that the means are available and known, there are social, cultural and political obstacles that prevent the implementation of these solutions. At the very level of the political struggle which should allow the conquest of a power to change, things are blocked. Unfortunately, I don't have an example in mind of a society that is blocked or at an impasse that would have gotten out of it through deliberation, rational discussion. It is only on the occasion of a great crisis, a catastrophe, a war, that sufficiently radical changes of direction can take place, for the worse or for the better. The situation is Gramscian in the sense that we clearly see the blocking elements while the solution is there. We know how to make the ecological transition. We know how to find work for everyone. We don't need to abolish economic freedoms, to plan everything. We can keep freedom, and even the essence of economic freedom. Not only is this known, but it is also wanted by most people.

This blocking situation is obvious. However, do not despair in action. This does not prevent denouncing and fighting. That's why I got involved in politics for a long time. The work of the intellectual is not only to make the diagnosis of this blockage. My methodological position, and not a political one!, is no longer to ask what we are going to do now, but to ask the question of past failures: why, after shocks that produced the beginnings of change, did we not continue on this path? Why these shifts that plunge us back into impasses from which only a shock can pull us out? In my opinion, when that moment comes, when the historical circumstances are met, two fundamental problems will have to be dealt with to prevent the repetition of past errors: institutions and stupidity.

On the institutional level, it will have to be admitted that the collective deliberation of citizens is much more effective than competition between parties. Faced with a given problem, citizens understand that it is necessary to arbitrate, to find ways of distributing the costs, to reconcile seemingly incompatible interests... I quote the results of citizens' conferences which have been consulted for thirty years in Europe, in which people of very different classes, ages and political preferences spend time together inquiring, informing, debating and offering sound opinions, in an almost consensual way. We basically have the ability to access this form of collective intelligence when we are in this social setting where the only competition is a common emulation to find the truth. The goal is not to beat the other, since there is nothing to gain, but to cooperate to reach a truth. Such a democracy would no doubt have flaws. But never as much as our current system which leads to confinement for 40 years in absurd policies, inaction and in anti-political sentiment nourishing stupidity.

Deliberative democracy was never seen as a priority during the crises that resulted from economic transformations, such as after the Second World War. On the left, too, the importance of institutions in preserving good policies has been too largely ignored. This sometimes stems from a misreading of Marx, which brings everything back to the class struggle. There has long been a sort of contempt for institutional thinking. Yet it is a fundamental priority. We must take advantage of revolutionary moments to establish sustainable and intelligent institutions.

However, even with a system that puts collective deliberation back at the heart of the decision-making system, we are not immune to economic bullshit. You have to teach people to debate, to discuss. For citizens to deliberate, they need to understand politics, economics, human psychology, society. They must have learned very early to discuss, to listen to the other, to argue intelligently. They must have been made aware of their cognitive biases. This is how we form a citizen people. The taste for truth and reasoned discussion are priorities. Concentrating on these two priorities is the only way to guarantee that after a transition to a more virtuous economic model, a new generation does not destroy all the previous achievements.

Notes:

[1] See for example Marmion, J. et al. (2018). Psychology of bullshit. Humanities Editions.

[2] Martial Foucault, “An exploded class vote”, The French electoral survey: understanding 2017. Sciences Po-Cevipof. March 2017. Or: Ipsos, “1er tour. Sociology of electorates and profile of abstentionists”. April 2017.