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Much Ado About Ideas: The Cognitive Factor in Economic Policy

Published online by Cambridge University Press:  13 June 2011

John Kurt Jacobsen
Affiliation:
University of Chicago
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Abstract

This article examines recent works that investigate how ideas acquire influence over economic policy choice. The revival of interest in the “material power of ideas” stems from discontent with the inability of rational interest-based models to explain particular policy outcomes, except by resorting to auxiliary assumptions. The works under review primarily apply “ideas approaches” as supplementary analytical devices to clarify the dynamics of policy choices. These studies succeed in illuminating the interpenetration of interests and ideas in order to plumb the problematic variability of interest formation and the degree of public influence over economic policy parameters. The bolder thesis that ideas have a force of their own (independent of all interests) is, however, misconceived and unproved.

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Review Articles
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Copyright © Trustees of Princeton University 1995

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References

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14 These beliefs form an “economic culture,” that is, a “definitive set of agreed-upon assumptions about how social economics functions and which social outcomes are desirable”; Rohrlich (fn. 8), 68–69. Furner and Supple (fn. 8) define “economic knowledge” as “those things that people 'know' in the essence of believing them,” including “theories or assumptions about the ways in which different types of economic structures promote or hamper civic progress, equality, and welfare; the relations between economic expansion and individual liberty (and indeed the very nature of liberty) and the links that unite particular forms of government and prosperity” (p. 24).

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16 Furner and Supple (fn. 8), 34. Likewise, Sikkink notes that the Reagan administration, despite a deep aversion to getting involved in such matters, could not entirely abandon a concern with human rights. See Sikkink, “The Power of Principled Ideas: Human Rights Policies in the United States and Western Europe,” in Goldstein and Keohane, 166.

17 As a special assistant in Washington, Daniel Ellsberg witnessed “a whole dimension of policy consideration that is often discussed but almost never written down for fear of leaks both within government and to the public.” See Ellsberg, , Papers on the War (New York: Simon and Schuster, 1972), 7778Google Scholar.

18 William Drake and Kalypso Nicolaidis hold that “the issue is not where community members sit but what they say”; Drake and Nikolaidis, “Ideas, Interests, and Institutionalization: 'Trade in Services' and the Uruguay Round,” in Haas, IO, 39. It must be noted there are usually “many Pareto-optimal alternatives open to a society” and that it is a “value judgment” that a Pareto-optimal situation is superior to any number of suboptimal ones. Barry, Brian and Hardin, Russell, eds., Rational Man and Irrational Society? (New York: Sage, 1982), 141Google Scholar.

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20 See the pertinent essays in American Prospect 16 (Winter 1994Google Scholar); and Stewart, Michael, Keynes in the 1990s (London: Penguin, 1993Google Scholar).

21 Wendt (fn. 4), 393.

22 Geoffrey Garret and Barry R. Weingast take a different position from the others in arguing that “the central concern of reflectivists—the social and institutional bases of shared beliefs—holds the key to overcoming the deficiencies of functional logic.” See Garret and Weingast, “Ideas, Institutions and Interests: Constructing the European Community's Internal Market,” in Goldstein and Keohane, 176.

23 See also Elster, Jon, ed., Rational Choice (New York: New York University Press, 1986), 127Google Scholar; and idem, “Further Thoughts on Marxism, Functionalism and Game Theory,” in Roemer, John, ed., Analytical Marxism (Cambridge: Cambridge University Press, 1986Google Scholar).

24 Peter Haas and Emanuel Adler, “Conclusion: Epistemic Communities, World Order, and the Creation of a Reflective Program,” in Haas, IO.

25 An anonymous referee raises this objection.

26 Dryzek, John, “How Far Is It from Virginia and Rochester to Frankfurt? Public Choice as Critical Theory,” British Journal of Political Science 22 (October 1992), 407–8CrossRefGoogle Scholar. He discusses the work of Viktor Vanberg and James Buchanan.

27 See Schattschneider, E. E., The Semi-Sovereign People (New York: Holt, Rinehart and Winston, 1960Google Scholar); and Habermas, Jurgen, Knowledge and Human Interests (Boston: Beacon Press, 1973Google Scholar).

28 On Britain, see Gilmour, Ian, Dancing with Dogma (London: Simon and Schuster, 1992Google Scholar); on the U.S., see Stockman, David A., The Triumph of Politics (New York: Harper and Row, 1986Google Scholar).

29 Kurth, James A., “The Political Consequences of the Product Cycle,” International Organization 33 (Winter 1979CrossRefGoogle Scholar); Gourevitch, Peter, Politics in Hard Times (Ithaca, N.Y.: Cornell University Press, 1986Google Scholar); Ferguson, Thomas, “From Normalcy to New Deal: Industrial Structure, Party Competition, and American Public Policy in the Great Depression,” International Organization 38 (Winter 1984CrossRefGoogle Scholar).

30 Policy entrepreneurs do not descend from Mount Olympus; they are usually interested actors who benefit when their ideas are adopted. Indeed, Sikkink refers to Premiers Frondizi in Argentina and Kubitscek in Brazil as policy entrepreneurs. See Sikkink, Ideas and Institutions, 245.

31 Note Albert Hirschman on the dangers of currozione “by which [Macchiavelli] meant … the loss of public spirit.” Hirschmann, “How the Keynesian Revolution Was Exported from the United States and Other Comments,” in Hall (fn. 8), 357, 354.

32 “He who determines what politics is about runs the country, because the definition of the alternatives is the choice of conflicts, and the choice of conflicts allocates power.” Schattschneider (fn. 27), 66.

33 “Epistemologically, the world and our representations of it are not isomorphic; our concept of reality is mediated by prior assumptions, expectations, and experiences. There is no such thing as the direct and true apprehension of reality itself,” writes Haas, IO, 21. This is the litany across the hermaneutic fields. As Robert Wallerstein writes, “The realities with which psychoanalysis concerns itself… are created, evolved and constructed realities…. The psychological impact of reality on the individual varies according to what a human being makes of it, consciously or unconsciously. There is no objective reality per se that carries psychological weight of its own.” See Wallerstein, , “Psychoanalytic Perspectives on the Problem of Reality,” Journal of American Psychiatric Association 21 (Spring 1973), 7Google Scholar.

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36 Kuhn, Thomas, The Structure of Scientific Revolutions (Chicago: University of Chicago Press, 1962Google Scholar). See Peter Euban's essay on Kuhn's impact on political science, in Green and Levinson (fn. 2).

37 Paul Feyerabend makes this case; Feyerabend, Against Method (London: Verso, 1975Google Scholar). On political implications, see Jacobsen, J. K. and Gilman, Roger, “The Dialectical Character of Paul Feyer-abend's Philosophy of Science,” Nature, Society and Thought 4 (January—April 1991Google Scholar).

38 See Oyrzanowski, Bronislaw and Palecny-Zapp, Magda, “From One Economic Ideology to Another: Poland's Transition from Socialism to Capitalism,” InternationalJournal of Politics, Culture and Society 7, no. 1 (1993Google Scholar).

39 On ideologies as “maps of problematic social realties” that “so construe [these realities] as to make it possible to act purposefully within them,” see Geertz, Clifford, “Ideology as a Cultural System,” in The Interpretation of Cultures (New York: Basic Books, 1973), 220Google Scholar.

40 Robert H. Jackson, “The Weight of Ideas in Decolonization: Normative Change in International Relations”; Sikkink, 9; Haas (fn. 8), 2; Goldstein, 3.

41 Hall, “The Politics of Keynesian Ideas,” in Hall (fn. 8), 369.

42 Ibid., 370.

43 Peter Gourevitch, “Keynesian Politics: The Political Sources of Economic Policy Choices,” in Hall (fn. 8), 73. See also Weir, Margaret, “Ideas and The Politics of Bounded Innovation,” in Steinmo, Sven, Thelan, Kathleen, and Longstreth, Frank, eds., Structuring Politics: Historical Institutionalism in Comparative Analysis (Cambridge: Cambridge University Press, 1992Google Scholar). Bounded innovation characterizes “institutions whose existence channelled the flow of ideas, created incentives for political actors, and helped to determine the political meaning of policy choices” (p. 189). An earlier formulation appears in Claus Offe,”The Theory of the Capitalist State and the Problem of Policy Formation,” in Lindberg, Leon et al., eds., Stress and Contradiction in Modern Capitalism (Lexington, Mass.: D. C. Heath, 1975Google Scholar). Weir suggests that “economic coalition arguments overlook the more independent role that new ideas can play in causing existing groups to rethink their interests and form alliances” (p.190). The point is worth exploring although we lack any examples of this occurring in the absence of the uptake of similar (potentially threatening) ideas by competitors.

44 “Policy ideas matter because they provide opportunities for elites to pursue their interests in more effective ways. This may be the most profound way in which ideas matter.” G. John Ikenberry, “Creating Yesterday's New World Order: Keynesian 'New Thinking' and the Anglo-American Postwar Settlement,” in Goldstein and Keohane, 84.

45 A very good recent example is Verdier, Daniel, “The Politics of Preference Formation: The United States from the Civil War to the New Deal,” Politics and Society 21 (December 1993CrossRefGoogle Scholar).

46 Ellis S. Krause and Simon Reich argue that the nature and competitiveness of a particular sector influences both the extent and the exact form of aid that the executive will extend. They find that the U.S. “free but fair” trade fluctuations in policy make perfect sense for everyone but labor. Krause, and Reich, , “Ideology, Interests and the American Exports: Toward a Theory of Foreign Competition and Manufacturing Trade Policy,” International Organization 46 (Summer 1992Google Scholar).

47 Polanyi, Karl, The Great Transformation (Boston: Beacon Press, 1957Google Scholar); and Hobsbawm, Eric J., Industry and Empire (London: Penguin, 1971Google Scholar).

48 See the case studies in Rodgers, Daniel T., Contested Truths: Keywords in American Politics since Independence (New York: Basic Books, 1987Google Scholar).

49 Maier (fn. 35), 45; Kasson, John, Civilising the Machine (New York: Vintage, 1981Google Scholar); and Noble, David F., Forces of Production (New York: Knopf, 1984Google Scholar).

50 Paul Goodman's comment remains apposite: the average citizen may not be equipped to “judge the substantive issues relevant to the vast sums for research and development; medicine, space exploration, and technical training; but it would be helpful if he understood the interests and politics involved.” Goodman, , People or Personnel and Like a Conquered Province (New York: Vintage, 1969), 315Google ScholarPubMed; emphasis added.

51 For an example regarding nonproliferation, see Jacobsen, J. K. and Hofhansel, Claus, “Safeguards and Profits: Civilian Nuclear Exports, Neo-Marxism and the Statist Approach,” International Studies Quarterly 26 (March 1984Google Scholar).

52 The most glaring example of the triumph of ideology over economic sense was the Nazi holocaust; from a purely cold-blooded economic view, it was inherently wasteful and diverted valuable resources from the war effort. However, this was a ghastly victory of racial ideology, not of one economic idea over another, which is the concern of this essay.

53 On rationales used to justify central direction as a means of achieving the official goal of worker rule, see Bailes, Kendall, Technology and Society under Lenin and Stalin, 1917–1941 (Princeton: Princeton University Press, 1978Google Scholar).

54 See Graham, Loren, Science and Philosophy in the Soviet Union (New York: Vintage, 1974Google Scholar); Fisher, George, ed., Science and Society in Soviet Society (New York: Atherton Press, 1967Google Scholar): Joravsky, David, Soviet Marxism and Natural Science (London: Routledge and Kegan, 1961Google Scholar); and Baylis, Thomas, The Technical Intelligentsia and the East German Elite: Legitimacy and Social Change under Mature Communism (Berkeley: University of California Press, 1974Google Scholar).

55 Checkel, Jeff, “Ideas, Institutions, and the Gorbachev Foreign Policy Revolution,” World Politics 45 (January 1993), 273CrossRefGoogle Scholar.

56 Ibid., 275. See Halliday, Fred, The Making of the Second Cold War (London: Verso, 1985), 11Google Scholar. Mikhail Gorbachev interestingly invokes Lenin as a shrewd interpreter of trends and one capable of adjusting as needed. Gorbachev, , Perestroika (New York: Harper and Row, 1987Google Scholar). For an internal view of Soviet flip-flops on foreign policy, see Shevchenko, Arkady N., Breaking with Moscow (New York: Ballantine, 1985), 7779Google Scholar, 108–9, 120.

57 Thomas Risse-Kappen makes an argument similar to Checkel's about how transnational elites influence one another across the iron curtain regarding arms control, and he likewise does not pin down a causal influence upon policy. See Kappen, Risse, “Ideas Do Not Float Freely: Transnational Coalitions, Domestic Structures, and the End of the Cold War,” International Organization 48 (Spring 1994Google Scholar).

58 Halpern does observe such flexibility in China, where there were “distinct limits to the ideological reformulations that have been permitted, for example, the debate must still revolve around the proper combination of plan and market, the proper role of the law of value, and new forms of management rather than ownership”; in Goldstein and Keohane, 104.

59 Maier (fn. 35), 16.

60 Marx, Karl and Engels, Frederick, The German Ideology (New York: International Publishers, 1957), 120Google Scholar.

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62 Ibid., 502.

63 Haas and Adler's “limited constructivist view” is that although “no description can exist independently of the social circumstances under which that description is made,” some consensus is possible; hence, “correct beliefs may evolve over time, as progressively more accurate characterizations of the world are consensually formulated.” This stance parallels that of Charles Sanders Peirce. See Haber-mas's pertinent critique (fn. 27), 91–141.

64 Ruggie, John Gerard, “International Responses to Technology,” International Organization 29 (Summer 1975CrossRefGoogle Scholar).

65 Ott, Melvin, “Shaking up the CIA,” Foreign Policy 93 (Winter 19931994), 42Google Scholar. See Hans Morgan-thau's prescient article on the dangerous adaptation of intelligence to preconceptions; Morganthau, , “Vietnam and the National Interest,” in Gettleman, Marvin E., ed., Vietnam: History, Documents and Opinions (Greenwich, Conn.: Fawcett, 1965), 374Google Scholar.

66 Gourevitch, in Hall (fn. 8), 89.

67 Ethan Barnaby Kapstein, “Between Power and Purpose: Central Bankers and the Politics of Regulatory Convergence,” in Haas, IO.

68 See Broad, William J., Teller's War (New York: Simon and Schuster, 1992Google Scholar).

69 See Cole, Leonard A., Politics and the Restraint of Science (Totowa, N.J.: Rowman and Allanheld, 1983Google Scholar); Perrin, Charles, The Fail-Safe Society (Berkeley: University of California Press, 1991)Google Scholar; and Schrecker, Ellen W., No Ivory Tower: McCarthyism and the Universities (New York: Oxford University Press, 1986Google Scholar).

70 Haas recognizes that “choices remain highly political in their allocative consequences,” especially “where scientific evidence is ambiguous and the experts themselves are split into contending factions”; in Haas, IO, 11. But what is rare in policy debates is scientific unanimity, not divided opinions.

71 Peter Haas distinguishes his “internally defined validity test” from Ernst Haass requirement that an epistemic community “professes beliefs in extracommunity reality tests”; in Haas, IO, 17 n. 39.

72 Mazur, Allan, The Dynamics of Technical Controversy (Washington D.C.: Communications Press, 1981), 8182Google Scholar. See also Latour, Bruno, Science in Action (Cambridge: Harvard University Press, 1987Google Scholar).

73 This accords with the spirit of Geertz's comment (fn. 39) that “competing ideologies are at least as important a check on ideological claims” as is scientific analysis (p. 230).

74 The Chinese went to the extreme of dispatching their unwanted “epistemic community” of market economists to a most severe reeducation, because they had failed to provide for party power-retention needs.

75 G. John Ikenberry, “A World Restored: Expert Consensus and the Anglo-American Postwar Settlement,” in Haas, IO, 294.

76 See Hirschman (fn. 31).

77 Gramsci, Antonio, The Modern Prince (New York: International Publishers, 1971), 112Google Scholar.

78 Mouffe, Chantal, “Hegemony and Ideology in Gramsci,” in Tony Bennett et al., eds., Culture, Ideology and Social Process (London: Open University, 1987), 223Google Scholar.

79 Cosmopolitan and nationalist developmentalists “agree about vertical industrialization programs promoted by vigorous state action but disagree over the role of foreign investment and the degree of state involvement in the economy.” Sikkink, Ideas and Institutions, 39.

80 On the implications of debt for Brazilian democracy, see Freeman, John R., The Politics of Indebted Growth (Denver, Colo.: Graduate School of International Studies, 1983), 20Google Scholar, 65.

81 Ibid., 157. Sikkink notes that these “rings” aided the 1964 coup (p. 151).

82 See Geertz's discussion (fn. 39) of why the claim that the Taft-Hartley Act was “a slave labor law” misfired (pp. 208–10).

83 See Jacobsen, J. K., “Peripheral Postindustrialism: Ideology, High Technology and Development,” in Caporaso, James A., ed., A Changing International Division of Labor (Boulder, Colo.: Lynn Rienner, 1987Google Scholar); and idem, “Microchips and Public Policy: The Political Economy of High Technology,” British Journal of Political Science 22 (October 1992Google Scholar).

84 See Touraine, Alaine, The Return of the Actor (Minneapolis: University of Minnesota Press, 1988), 114Google Scholar.

85 Maier (fa. 35), 268.

86 Margaret Archer reminds us of “the quintessential reflective ability of human beings to fight back against their conditioning [which] gives them the capacity to respond with originality to the present context—either by taking advantage of inconsistencies within it and generating new forms of syncretism, or by exploring novel combinations of compatible elements.” Archer, , Culture and Agency: The Place of Culture in Social Theory (Cambridge: Cambridge University Press, 1988), xxivGoogle Scholar.

87 Stuart Hall, “Cultural Studies: Two Paradigms,” in Bennett (fa. 78), 12.

88 Grossberg, Lawrence, We Gotta Get Out of This Place; Popular Conservativism and Modern Culture (London: Routledge, 1992), 54Google Scholar.

89 Ibid. See Eagleton, Terry, Ideology: An Introduction (London: Verso, 1991), 115Google Scholar, 193–220.

90 On cultural studies, see Grossberg (fn. 88); Bennett (fn. 78); Hebidge, Dick, Subculture: The Meaning of Style (London: Metheun, 1979Google Scholar); Fiske, John, Reading the Popular (Boston: Unwin, Hyman, 1986Google Scholar); and Brantlinger, Patrick, ed., Crusoe's Footprints: Cultural Studies in Britain and America (London: Routledge, 1990Google Scholar).

91 Archer (fn. 86), xiii. See Touraine (fn. 84).

92 For historical illustrations, see Salvatore, Ricardo D., “Market-Oriented Reforms and Popular Protest: Latin America from Charles III to the IMF,” Social Science History 17 (Winter 1993CrossRefGoogle Scholar).

93 Emanuel Adler, Beverly Crawford, and Jack Donnelly, “Defining and Conceptualizing Progress in International Relations,” in Adler and Crawford (fn. 8), 27.