Paul Krugman is beside himself these days, and he isn't alone. For all the economists, policy-makers, politicians and sideline observers who have been alternately skeptical and incredulous about the policies of "austerity economics" our moment seems to have arrived. In practice and in theory the rationales for austerity economics today lie in ruins.
Austerity economics European-style have dragged the economy of the region back into recession -- yay! -- and a growing number of reports argue that the American version of austerity (specifically the lack of more public spending and the "sequestration" cuts) are putting a significant drag on our recovery.
And, as has been widely reported, some of the foundational research for these policies has been revealed to be faulty, its conclusions about the relationship between national debt and economic growth to be significantly flawed. Score: UMass economists 1, Harvard economists 0.
However, despite the disgrace in which the case for austerity economics now resides, it is unlikely that politicians and policy-makers, either in Europe or in the GOP-controlled House of Representatives, will change course anytime soon. To understand the reason for the intransigence of austerity economics, it is worth going back to the late 19th century when the field of economics first took shape.
Modern economics, like all the so-called social "sciences," emerged in the wake of the Darwinian revolution. People had been thinking and writing about the forces of the economy long before then -- Adam Smith published The Wealth of Nations in 1776, for example. But in the 18th and early 19th centuries economics was regarded as a branch of moral philosophy.
After Darwin -- and after similarly transformative advances in a variety of hard sciences -- some economists began to experience physics-envy. They wanted the legitimacy and authority that came with being a real science. They began to replace philosophical speculation with the formulation of "theory," never mind that those theories could never be tested, the experiments ever replicated, the variables controlled like they are in the real sciences.
Above all they believed that the social world -- especially the economy -- was controlled by the same kinds of immutable laws that governed the natural world. Unable, really, to duplicate the methods of science, they started using its language: They began to talk about economic "laws" in an attempt to make the relationship, say, between supply and demand equivalent somehow to the laws of thermodynamics.
In the context of the laissez faire late 19th century, these new "scientists" of the social world looked around at the Gilded Age and pronounced it not merely "good" but inevitable, simply the results of natural forces at work. The phrase "survival of the fittest," remember, was not coined by Darwin but by Herbert Spencer, one of the pioneers of the new social science, and he used the phrase to apply Darwinian biology to the Dickensian world of English industrialism. Thus was born the oxymoron "social Darwinism."
In the United States, Spencer's social scientific assertion that only the fit survive was enthusiastically embraced by Yale University professor William Graham Sumner, America's first professor of the new social science. Sumner was embarrassingly unapologetic in his application of Darwinian science to contemporary society, writing famously in one essay: "Before the tribunal of nature a man has no more right to life than a rattlesnake; he has no more right to liberty than any wild beast; his right to pursuit of happiness is nothing but a license to maintain the struggle for existence..."
Sumner not only defended the results of Gilded Age capitalism but he condemned any attempts to alleviate their worst abuses. These were laws of nature, after all, and governments could not or should not make any attempt to alter them.
"We have seen," Sumner wrote in 1881, "that if we should try by any measures to relieve the victims of social pressure from the calamity of their position we should only offer premiums to folly and vice and extend them further.... The only two things which really tell on the welfare of man on earth are hard work and self-denial." Except for its eloquence, that sentence could have been uttered by any member of the GOP leadership yesterday.
Read today, it is easy to see Sumner's work for what it was: a defense of the Gilded Age status quo dressed up in the trappings of hard science, a set of apologetics in the guise of cold, hard, fact. In fact, Gilded Age Free Market Fundamentalism, of which austerity economics is a current incarnation, is now what it was over a century ago: a set of moral propositions -- about wealth and poverty, about individualism and the social contract -- masquerading as hard science.
In real science, when hypotheses are disproven by experiment and observation, scientists reformulate the theories and try again. Moral propositions, on the other hand, are held as unwavering principles. If you view economic policy as a tool-bag with which to tweak the economy, you can change economic course in the face of new and changing data.
If you view it as the expression of unyielding principles, however, admitting that you were wrong means the whole edifice comes crashing down. Which is why we may be stuck with austerity economics for the foreseeable future.
Steven Conn teaches history at Ohio State University. His more recent book is To Promote the General Welfare: The Case for Big Government (Oxford University Press).