The corruption of a science

Ryan Grim shows how the Federal Reserve has bought the academic economists:

The Huffington Post reviewed the mastheads of the American Journal of Economics, the Journal of Economic Perspectives, Journal of Economic Literature, the American Economic Journal: Applied Economics, American Economic Journal: Economic Policy, the Journal of Political Economy and the Journal of Monetary Economics.

HuffPost interns Googled around looking for resumes and otherwise searched for Fed connections for the 190 people on those mastheads. Of the 84 that were affiliated with the Federal Reserve at one point in their careers, 21 were on the Fed payroll even as they served as gatekeepers at prominent journals. At the Journal of Monetary Economics, every single member of the editorial board is or has been affiliated with the Fed and 14 of the 26 board members are presently on the Fed payroll.

It’s no secret that the financial economists employed by the big banks are untrustworthy, being little more than stock market cheerleaders, but the academic economists are arguably even less reliable. This is an excellent article by the Huffington Post, the best I have ever seen published there. The best part is when Milton Friedman is quoted in a damning 1993 letter: “I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results.”

While same sort of corruption and monolithic thinking revealed in the economics profession can be seen in other scientific disciplines as well, the difference is that it is more difficult for the Federal Reserve to maintain control of the field despite its massive finances because economic events so easily overwhelm the intellectual edifice that the Fed has constructed.

Alan Greenspan himself has said that the whole intellectual edifice of mainstream economics has collapsed. I very much agree, and further note that it is Greenspan and the organization that employed him which is largely to blame.