Episode Ninety Seven

Introduction

0:00Welcome to Smith and Mark's Walk into a Bar, a History of Economics podcast. I'm Jennifer Jun, one of your co-hosts today. I'm very sick, which is why I sound terrible. But nonetheless, I'm here. I'm also joined by Francois Alisson, who I am very envious is in Rome right now. Exactly, Jennifer. I'm in Rome teaching in a module about pluralism and economic ideas.

0:37But the weather is so terrible in Rome. So much water in the street. You cannot walk. It's like a swimming pool. But nevertheless, it is Rome, the eternal city. And it's nice. We win some, we lose some. And I'm very excited for our guest today. I did want to make a note that we are down a host today. Jinla, we miss you. Jinla will be coming back on a future episode. So don't worry, everyone. She's still around. And for today,

1:09I'm very excited to introduce to you Dr. Verena Hausmeier, who is university assistant in the Department of History at the University of Vienna. Verena, you and I met nearly a decade ago at a History of Economics summer camp in Montreal. We were such babies back then. You're right. It's almost a decade. Yes, that's shocking. That's shocking. It's good to see you anyways here. I'll see you, Francois. Good to see you too. Thank you for joining us on the show.

1:40Thanks so much for having me. So let's get to it. I'm in Vienna. The weather is nice. We had some sunshine after a December with only seven hours of sunshine for the whole month. That's pretty nice now. Oh, goodness. Well, it's like we had a whole bunch of ice over here in Durham. So my neighborhood street was like a hockey rink for the last few days. Yeah. Yeah. School had to close and everything because we're not equipped for this sort of problem. But we were all here. So let's get to

2:17it. Verena, we've got some questions for you. I'm going to start off with a question about a book that you published last year with Cambridge University Press titled Managing Growth in Miniature, Solow's Model as an Artifact, which tracks the development of Robert Solow's famous growth model, which is one of the central models in post-war economics. And Solow won the Nobel Prize for it in 1987. This book that you that you published received the best book award last year from the European Society for the History of Economic Thought. So many congratulations on that.

Background on Solo's Model

2:52Thank you.

Background on Solo's Model

2:53Now, before we get to the book itself, I'm going to ask you for a little bit of background about the Solow model. Like, what, what is it? What does it model? And, you know, where, when, why did Solow development, you know, what were, what was going on that time that necessitated such an artifact?

3:17So, I don't know, probably some, many listeners of this podcast will be familiar with the model to a certain extent. So I think I just will be very brief on this. Like, so the book I in the title, I say it's about Solow's model. It's also known as the Solow model or the Solow Swan model or the neoclassical growth model. So as is often the case in the history of science, there were several

3:48simultaneous and earlier constructions. For instance, a very similar formulation had been published in 1935 by the Dutch economist Jantin Bergen in a German journal. And also in 1956, there were two publications that presented more or less the same model. So one by the New Zealand economist Trevor Swan and the one by Robert Solow, which appeared in the Quarterly Journal of Economics. So one of the most prestigious journals of economics, even at that time.

4:21Well, Robert Solow back then was still a relatively young economist at MIT, which was not yet the powerhouse of the economics profession that it would become in the following decade. And the model, the building of the model and the success of the model went hand in hand with the postwar, the postwar, you might call it messianism of growth, or postwar politics of growth. And this golden age,

Post-War Economics

4:54where growth was the main aim and vehicle of, of politics, as historians of growth called it. So in this model, like in a nutshell, it presented a simple model, as Solow called it in his publication, it was an equilibrium growth rate expressed as a linear differential equation. So this was a state of growth determined only by output and saving in which both capital and labor were fully employed. And this

5:30also meant that population growth or capital investment were not enough to increase this growth rate, capital would flexibly adapt to changes in population. So instead, it could only be permanently changed, changed through additional factors, which were not part of the model. So technologically change. So this is basically what Solow's model is is famous for. And maybe a few words on, on what this what kind of world this model presented. Of course, it's the new classical growth model. So it's a world of perfect

6:06competition where fully the fully flexible functioning of markets ensured equilibrium, there were no failures of coordination, no overproduction or underproduction. And in addition, there was the assumption of perfect foresight, and this established that future developments of prices and interest rates were already known in the present. So there was no uncertainty, no risk. And this mathematical economy only changed in scale, not in

6:37composition. And all kinds of historical dynamics and contingencies were excluded. Moreover, and this depends on how familiar people are with economics. So the model depicted the relationship between capital and labor, but it was not about questions of power between social formations. There were no non augmentable things such as energy or land, there was no environmental depletion. And there was no money. So the question

7:09that I raised, my question was that, what made this so utterly frictionless world, so appealing to economists? So it's very basic questions in a way, and soon after to other academics, policymakers and professionals. And what struck what struck me, right at the beginning was that in the eyes of contemporary economists, what set the model apart was not so much a novel idea. Because the notion that growth was not entirely

7:43dependent on capital accumulation, that had already been theorized before, in various ways. But what made this model so compelling was a compelling was its specific format. And this is what I then deal with in the book.

8:02Thank you very much, Verona, for this answer. So in the end, why was Solow's model so successful? And what did success tell us about the history of models in economics? Yeah, so it was indeed a very successful model, like in the depends on what you mean, right, in the sense that it was widely cited, extended, reformulated, it was used as the basis for various other kinds of modeling projects. And yeah, it was called an engine of analysis and the organizing structure

8:39of a variety of subfields of economics, and eventually became the basic framework for thinking about growth. So, and this, so when it comes to the history of models in economics, this ties in with, of course, I think that this was what you were thinking about developments between the 30s and the 1960s, that historians of economics have described this, the time of processes of mathematization and formalizations that the discipline, the academic discipline of economics underwent. And I would say

9:13that Solow's model was one of the agents of this development. And, and ultimately, it has also been described as a model of what it means to think like an economist. Yeah. But at the same time, of course, and this speaks to the success, it was also confronted with the most fundamental criticism. I think I put this in the introduction, as well, like, for the utter unrealism of its assumption, for tautological knowledge, for providing an ideological feeling of capitalist destruction,

9:49and so on and so forth. So it also, at the same time, became an exemplar of economist disinterest in the economic world. So this, I don't know that it's not a success, but in the sense that it was received very widely also on the side of its critics. Yeah.

10:09Okay, great. And your approach in the book is not to follow a person solo, but rather to tell the story of what you called a knowledge artifact. Can you explain us what do you mean by this term, and what does the concept of an artifact bring to your analysis? Mm-hmm. I think I would like to, to go the other way around. Like, so I started off with this

10:43observation, then that economists thought it was not so attractive because of a specific idea that the model presented, but because of its specific format. So I tried to find out what it meant that economists talked about the model in terms of being very, a simple, a beautiful, that it has had a beautiful simplicity to it, or that it was extremely useful for tackling the problem of growth.

11:14Um, so what I did was in the book, uh, to construct various trajectories where I, um, linked and compared solo's model with other forms of economic knowledge about growth and the economy that were around at the time. Um, and I tried to figure out, uh, what new kind of knowledge brought the model about and how it compared to these other forms of knowledge. And, uh, what, what I found out or

11:47seemed to me that, um, economists appreciated the model for fulfilling several instrumental and also pedagogical functions. So for one, it was a small scale working object, and this ties very much in with the idea of artifacts in the literature. And I will say something about that in, in a minute. Um, but like a working object to investigate and to experiment with. So, um, this was more about a, a, a tool for theorizing. Now, this is what solo called, uh, the model himself. Like it was the art

12:21of theorizing to construct something and then try things out with it and to be playful about it. Um, but also then it was used as an instrument of measurement, um, which means that it formatted data in a way that economists deemed productive for further inquiry inquiry. Um, so this is also something that solo himself did a year after the publication of the model in 1957, where he estimated that technically change was responsible for almost 90% of growth since the turn of the century. So

12:53technically change here was just the label for the, uh, residual. Um, we can, maybe we can talk about this later, uh, yet another function of the model was that it was used as a, some kind of a prototype. So it was seen as laying the foundation for, um, building larger scale models, but also for integrating more factors into the small world, which meant that there was a lot of things that had to be brought in the format of the model to be able to be integrated. Um, but also as a teaching device,

13:26it served as an entry point to the practice of modeling and to becoming an economist. And also, and I think this is quite important as well, that it provided this little mechanism that could serve as a starting point for all kinds of stories about growth. Um, economists at the time, like Samuels, no sorrow spoke about fables or parables about growth. Um, so, and this is a collection of, of, of how models or how this model was used in practice. Um, and then what helped me enormously,

13:58and I don't know what came first, like it all went hand in hand, um, was a literature from the history and philosophy of science that focuses on research practices and the role of knowledge artifacts and knowledge infrastructures. And this literature provided me with, with a lens and, and with a vocabulary, um, to historicize, situate, and in a sense, concretize, um, economists abstractions. Um,

14:28yeah, so I already mentioned it. So more specifically with regard to the history of economics, that would be the work of Mary Morgan or Marcel Baumann's, uh, Taya Knutela as well, Margaret Morrison, who all worked on models as artifacts. Um, so, yeah, so this was for me, a way to focus on the practices of modeling, how economists, um, maybe that's, that's what I emphasize, maybe in comparison to that literature, like that, um, this is how economists, like this

15:01is the practices of economists, but it involves their way of talking about their practice. So it is both about the work they do and the performance, uh, of economists as modelers. So, um, it is about the practice of modeling, but also about the way of economists talking about their work as building and manipulating a mathematical model. Yeah. And I think that also in comparison to that literature, that, uh, it was not so much for me to, to pick various, um, models from the history of economics

15:38as case studies to think about modeling as a practice, um, like to focus on the philosophy of, uh, scientific modeling, for instance, as a practice, but more to think about the historicity of a model. Um, like if you put it on different trajectories and if you follow it, follow forms of knowledge around, um, so not only to understand modeling as a practice, but also as a specific historically situated practices, uh, practice. Yeah.

Correspondence with Amartya Sen

16:14So in this book, it starts off with a correspondence between Solo and Amartya Sen. Um, and, um, and this correspondence is about the 1956 version of this, of this solo growth model. And I was wondering if you could say a little bit about this interaction, which I thought was really endearing, to be honest. So, you know, Sen writes and he's puzzled about, about something related to his model. Um, could you tell us like, what, what was he so puzzled about? And what does this for you, for you as a, as a philosopher of modeling, this was maybe too basic.

16:48No, not at all. No, not at all. I always, I, I found it really, really endearing. Um, I don't know if that's a peculiar reaction to have, but, um, could you tell us like, what was Sen so puzzled about and why, what does this correspondence tell us about, um, why modeling is important in, in economics? Hmm. Um, so, so I stumbled across this correspondence a really long time ago and I completely had forgotten about it. Um, and then when I wrote the introduction to the book,

17:21I was really unhappy with it and it didn't work at all. And then I, I was like desperate. Uh, and then I remembered, uh, that correspondence and, and then I thought, ah, it's quite useful, like to have this sort of vignette or anecdote, uh, to motivate the introduction. Um, yeah. And, and this anecdote is that, uh, Amatya Sen, he edited an anthology of selected readings in growth economics. That was the title of the anthology, uh, which was published in 1970 with Penguin Books.

17:54Um, and when he wrote the introduction, he also seemed to struggle a bit. Uh, so he, he offered some kind of survey of the field of growth economics of the state of the art. And, uh, he wrote a letter to, to Solo at the beginning of 1970 when he was about to finish that introduction. And he asked about the proper interpretation of Solo's model. And, uh, he said, and I, I will, I will quote, right. Uh, is it a description of how capitalist economies actually work or of the consequences

18:30of maintaining full employment? There is some ambiguity in the way you put it in 1956. So, um, what I thought is that this inquiry, uh, touched on the very status of the mathematical model as a, a model. So, um, um, yeah, so Sen believed it could be interpreted in two ways as a representation of actual workings of capitalist economies and as a sketch of an imaginary future world that could be achieved through governmental action. And in his reply, Solo denied that the model's properties were

19:04features of an, uh, economic reality out there. And he conceded that, um, his discussion in 1956 was, was somewhat ambiguous. And he says then for the simple reason that it wasn't clear to me at the time, exactly what I was doing. Um, which, which captures a lot of, of how, um, um, how, uh, how, how do you say, okay, maybe we can cut this, but how, how, how, um, witty or how jokingly Solo often

19:39talked about the practice of modeling. So you don't, you always have to take these things with a grain of salt. Um, now what, what I thought is that you can use this exchange in a variety of ways. Like you can take it as, as an endearing, uh, anecdote. Um,

20:03and the way I thought I could use it was just that there was some ambiguity with models and with modeling. And, and I thought that this, uh, inquiry and maybe even frustration on Sen's behalf, like, I don't know, this is the way I interpreted it, that it draws our attention to, to the very tricky relationships, um, of a model and the worlds beyond their narrow confined, narrow confines. So, um, I used it not so much to think about why modeling is important, but rather to say that,

20:39okay, apparently there is something that economists struggled with. So it was not very straightforward how to deal with the models, even for economists who had worked together, who shared a certain way of reasoning to a certain extent. And, and then, and then I linked it to like, this was not specific to economics, but like the struggle with, with models was a quite prominent theme in the sixties. Um, also in, in other side, in, in other fields, uh, of sciences, engineering and the arts. Um, yeah,

21:15so this is the way how I use the, the exchange between the two of them. That's fantastic. I just thought it was so hilarious. These are these two giant intellects and one is like, what the hell? And the other one's like, I don't know, what the hell? Yeah, it's kind of a recipe. Um, but given, given, uh, given the answer and pointing to this kind of ambiguous status that models have, one thing, um, that your work does is it complicates and interrogates

21:45the standard image of the relationship between a model and the world. Um, you argue throughout the book itself that economists typically refrain from committing to their models, either as possessing explanatory power or as representing the real. So how, I mean, how are they engaging with their own models if, if, if not in those ways? Yeah. So, so, uh, the thing is, if you focus on one model in particular and then look at all the things that you can find in archives and, and in publications,

22:20uh, that you can go, that you can find a variety of, uh, model talk, like of how economists talk about the model and, and how they talk about this way of, of modeling and it makes things quite, uh, tricky and, and messy. Um, so I, I, I mentioned it before. So the different functions that a model, um, that the model took, uh, fulfilled in a way. Um, and I think one of my main takeaways was that, um,

22:58you, you can see how solo and other models, like it's not only the person of solo, but, but various modelers and economists, how they link this model to national income accounts, to different kinds of productivity measurements at the time, uh, also to, to input output models. Um, you can see how, how this model is really inscribed into an already existing infrastructure of knowledge, uh, where models and data mutually reinforced and stabilized, uh, one another. So this was one, like how that this model,

23:32you know, builds on a broad infrastructure of knowledge about, um, the economy and growth. Um, at the same time, it brings something new to the table in the sense that due to its small and very efficient form in a way, it equipped a vocabulary of growth development and productivity with this image, um, of a manageable mechanism, like one that led towards, like that could principally lead towards an ever more prosperous future. So this growth growth was indeed limitless in principle

24:07through the power of technological progress. Um, and also it worked entirely without paying attention to the distribution of income and wealth, for instance. Um, and so, so the one thing is how it built on knowledge that was there. And at the same time, it laid the foundations for future engagements with growth and over the years. And we talked a little about this before it demonstrated a quite, quite remarkable, uh, stimulative, uh, stimulative character. Yeah. Um, yeah, I think this is one thing, one thing that really

24:47struck me as well was how modelers who used the model, like how solo in various publications, but also modelers who came after how all of them presented the model as something tentative and as, as always in the, um, to the luminary. Um, because it was too sketchy, it was too simple. One should not take it too seriously. Um, it was in need of further work. Um, so we could, we could say that in a way, the work of modeling is rarely finished which which also means that you can always say well it's just not

25:20yet there uh you can extend it it can be it can be better so this could be one of the openness

25:28this points to the openness of models um but of course at the same time uh the model provided rules for how subsequent models that built on it how they worked so it was adaptable and extendable uh and as i said before like it did allow for instance for the accommodation of a variety of other factors but only if they were formatted in a way that they fit into the model so so it is

26:00preliminary but also quite um binding um in the literature sometimes like in the broader literature on models and modeling in the sciences and the arts models are described as suggestive or having this active potential to draw modelers or people who engage with them into the kind of reasoning they allow and i think this would be one example of that yeah okay so a kind of past dependency um yeah so and this relation between the world and the model evokes to me political issues and in the

26:42book you discuss several political issues related to the practice of modeling in economics and you present solo's model not solo solo's model as emblematic of neoliberal thinking on the grounds of its its assumption of the pervasiveness and efficiency of markets and you're right that solo's model was not intended to serve as a policy tool but that the neoclassical synthesis with which both solo's model

27:14and the mit economics department were associated to did have a distinctly political character can you a bit elaborate on this um so i did try to better understand the different politics a model can have so which is both the ways it is it is used to argue for different policies but also the kind of things that a model um includes and the kinds of things that a model excludes so the type of reasoning it allows on a very basic

27:50level um so so what you refer refer to it's it's um not so much me uh who presented the model as emblematic of neoliberal thinking but it is an attribute that the model uh received in the course of the decades like one one or yeah one example that i bring in the book is by melis and avi the former ethiopian president uh who described the solar model as the basic neoliberal model of growth because of

28:23its assumptions um of the pervasiveness and efficiency of markets so this is a quote that refers to the use of the model in the realm of so-called development um on which i did not work and like i did not do work on on this myself which is something that i would have loved to do and i hope that i will be able at some point um the point here for me is i think to refer back to this openness of models and

28:54and also to the ambiguity that that sen pointed out in this exchange like the model could be interpreted in different ways and in fact not all of those who worked with the model shared the idea that this model described not a work of fully functioning uh flexible uh pervasive efficient markets uh but it was more like the an imaginary world in the future so um i think this points us to how a model uh can

29:27develop a life of its own um independent of the intentions uh of its modeler and so in some quarters of economic theory the growth equilibrium actually turned into something existing in the world which irritated solo who bemoaned that economists took the construct for a model of actual capitalist um dynamics so this was his critique of of how the field of macroeconomics and growth developed in the decades after his publication um so for him and and this is something that i found out over time so at

30:07several um in several publications but also already in 1956 maybe not that clear as sen pointed out but so the model did visualize indeed a future world that could be realized and that could be reached if government took the right steps so in the context of the council of economic advisors it was about you know rational management uh government was supposed to to shape the right environment for private businesses to increase productivity and to foster the development of technology

30:42um and and within this ensemble of tools like because you said it was not directly uh thought of as a policy tool and i think um it still had had this more elusive elusive function within the realm of policy making um it's like it didn't include anything on the short uh on the short run and the way it like to me it seemed that um

31:14in combination with other techniques that analyze the effects of short-run policies and investigated this aggregated data this model depicted this possible economic state that could be achieved through the implementation of short-run policies so so um that the the economist at the council of economic advice is what they had in the back of the mind this is like where they wanted to go from the from the history of model perspective we could then say so this model called for the realization of a full potential growth

31:48even though it did not provide any guidance uh on the policies required to achieve such an equilibrium vision um so you could say that this model actually visualized the bright promises uh of a politics that was centered on growth and affluence um yeah but but i think but i think like you could right you could take that as as a as a starting point maybe for a history of market thinking that involves um

32:20american keynesianism um in a history of neoliberalism and the history of market thinking um but but i think that solo and and his colleagues like the fact that the model portrayed a world of free markets neither implied that real world markets would work best without government regulations or union action nor that such model could not be integrated for instance in various socialist frameworks

32:52you also sent us a paper which was the introduction to a special issue of science and context that you co-edited with eric hoonshell titled historicizing interventionist social knowledge 1950s to 1990s and i was wondering if you would tell us a bit about this project in the introduction you seem to be reacting a kind of against a you seem to be reacting against a particular kind of academic attitude that's prevalent in the literature about this area era and what is it that you're rejecting here what are

33:25it seems like you're you're worried that there are historical frameworks that are getting imposed on that period but aren't actually appropriate to it does that sound right uh yes yes yes it does right um also here like the specialist she has quite a long history um the starting point was was a double session at the hes in 2021 um and eric council who works on the history of the social sciences and i we were interested in the role of social scientific knowledge in interventionist action after the second

34:00world war so in the from the 50s to the 90s basically um so this is also this interest in the tools and devices of social science but in this case not only economists but also psychologists and anthropologists so it was again um like an attempt to get away from being centered on ideas while not casting them aside entirely either um and so and and one of the things that the contributors to the special issues and we discussed

34:35at an author's workshop we organized was if we focus on this level of interventionist knowledge and the related practices how does that relate to common storylines for the social sciences in the second half of the 20th century such a decisive neoliberal turn or or narratives about the end of planning and the end of interventionism in the early 70s or around the early 70s um so so so yeah in a way all of us pondered

35:06um what to do um what to do with narrative devices such as ideological or intellectual consistency when we look at these tools and um and devices in practice yeah because often like so we collected a set of of very um close studies of interventionist tools and what most of the contributions stumbled across were many continuities across the decades um but also a lot of ironies they elicited so the ways

35:45um in which interventionist knowledge was used in different ways than intended it led to different outcomes than it expected or also that it was simply ignored so all kinds of different twists and turns in fabricating and using interventionist knowledge so we were interested in these stories and then we asked ourselves how they compared um to to larger narratives um

36:15about the 60s 70s 80s

36:20so what were the sorts of stories just to give us an idea what kinds of stories uh do you have cataloged in this edited volume and what if anything unifies them there were if i recall three main themes that you identify in your introduction um what were you trying to express with those themes and how do they serve to complicate the narratives that are usually told about this era okay yeah um so so what unifies them is really the specific interest and a specific lens and an interest in really diving into the archival material and and dealing with the

36:59nuts and bolts of of interventionist um knowledge um so overall i think we brought together quite heterogeneous uh studies um i would just give two examples because i think it's too much if i if i mention all of them um like um mary morgan for instance she writes about um uh wolfgang stolper in who was planning the economy in post-colonial nigeria basically to keep it safe for for the free market um under scare quotes of

37:31capitalism um and she focuses on the informal networking and the personal engagements of this international international expert um another example is uh nikki rina a colleague from from the etha zurich now in berlin uh who worked on anthropological field work that informed the french eco-musee as a tool of regional development so you can see it's a very broad understanding of of interventionist tools but so we all asked um the same questions and had this focus on uh what happens on the ground and in which

38:11ways did things not go as um as intended and um what we found out was um so the one thing i think that picks up on before like so we didn't try to find a new overarching narrative or this is how you should think about the history of interventionism um but it's really more about you know having the set of smaller case studies um and to have stories about the terms set by interventionist tools themselves

38:48rather than charting more or less state intervention or sorting interventions into political ideological camps um and and rather to see okay how if you look at this level of interventionist tools how does it relate to grand political or intellectual ruptures and and i think three themes that we we found in each of the cases was on the one hand the various forms that interventionist knowledge can take in the course of

39:19intervention so it's very much i mean for historians of economics and historians of science that might be not too surprising maybe but uh so but it is something that we learn in our fields and that i think is interesting for the if you're interested in history of policy making that makes it makes sense to to have this in mind at least so that you have rather blurred boundaries between the quantitative and the qualitative between the numerical and the verbal between the scholarly and the political and between

39:50the formal and the informal so these these all intersect and get quite blurry in the course of interventionist practice a second theme that we found was the adaptability of different types of interveners so um this was about specific skills kinds of knowledge and types of authority that experts needs to be effective as interveners so for instance to just to be able to sometimes spontaneously handle everything

40:25that departs from assumptions and that does not fit the expectations um so for instance that planners uh use their uh use their information networks not only to find out about regionally specific economic preferences but also to build relationships that promise local buy-in to the plan or um the way uh uh experts know how like for instance andres guillot isaac uh he traced the life of the colombian 10 year

40:57plan and uh he looked into how this was used as a kind of security for international lenders so also the the many um tricky things that make invent interventionist knowledge very um have different roles than the ones that we might expect uh from the start and also that experts have very different uh things to do and very different skills to have to um to really intervene in policy making processes yeah um and the

41:33third theme that we found was the overall relativity of expertise um so how for instance specific tools of interventionist knowledge they were just uh sidelined or rendered irrelevant or how they might just miss their moment if a specific political context has shifted um or how uh specific tools that originally belong to an overturned theoretically disciplinary paradigm how they might persist

42:06in interventionist practice so one example um zoe evra who worked on belgium uh economic planning uh he she she uh she uh showed how how so-called keynesian modeling um remained in place in policy making practices which is something that that our colleagues have also studied in in other realms um and how how these models were repurposed with uh within the belgium planning bureau which was only established in 1970 so

42:43so rather late um so so in the end the thing is that so these are not simply stories of influence and and success which is mostly when when we think about economists and policy making i think we're interested in these cases um but also this is not simply about failure so this space in between like if interventionist tools gets applied uh what happens then how does change the dynamics of policy making practices and what happens on the way in in different fields and um with different types of

43:17knowledge thank you verena and now it's time to move to a third piece of work that you sent us

Historicizing Interventionist Knowledge

43:27one that as you know is of greater interest for me um it is a paper recently accepted in the german language journal uh historische anthropologie and among the topics uh there is this one alternative planning what do you mean by alternative planning yeah so um this is the first paper i published of a project um about economic

43:58knowledge beyond the academic economics profession which i would like to keep on working um and here alternative planning is actually an actor's term so it is a term used by historical actors in this specific case um so the paper is about the so-called lucas plan which is an uh was an alternative company plan so this is how they call this an alternative to the management's plan uh of the management of lucas aerospace which

44:33was a british multinational and this alternative plan was organized by a combine by the lucas combined that represented 13 000 workers so 4 000 were were um fired the years the year before and this plan suggested a restructuring of production from defense related production to socially useful so this is also what they called it socially useful production embedded in broader suggestions for economic reorganizations

45:04a reorganization um yeah and the initiative went from 1976 to 1982 and so i was interested in what kind of knowledge goes into such an alternative plan what are the ways of making knowledge what are the instruments of planning here how are they used which role do they have so in this sense uh what is alternative planning uh so it's it's very similar questions that that we asked in this uh in this uh special issue and

45:40also that motivated my book basically um so yeah but but addressing different actors

45:50i am especially happy to hear you about the the lucas plan because as our listeners may not know i invited you to to to make a speech about the lucas plan in my class last december but due to a strike at the university of lausanne uh we had to cancel uh this lecture and somehow this was a pity it was a pity indeed um and um i would still like to know how the whole story of the lucas plan uh is linked to the more general story of economic planning and

46:25especially as the title of your papers mentions to the critique of political economy

46:34yeah so this is not a very straightforward connection to make um also like if if people heard of the lucas planet is like it has a very lively afterlife especially in the past 10 years they has there has been some what of a historical revival of the lucas plan um in particular when it comes to debates about ecological and democratic planning and mostly it is received for its approaches to participatory design

47:06and participatory planning um and this is because what the plan like at the center it was it was uh three wall volumes i think with with 200 200 pages each so it was a huge uh volume this plan when it was first published because it basically it it the main part presented socially useful products that um the workforce could um produce with the material and the skills that they had so uh these goods involved for

47:38for example electric and hybrid drives or wind turbines um solar collectors and heat pumps um but also devices for the field of medical care such as i think portable dialysis machines um so just to give you a few examples of what this was about and um at the time the plan was quite widely received in particularly when it came to its critique of science and technology um so it and this is basically the

48:11line of of reception until today so it was appealing to environmentalists um because they saw it as a model for a green economy without job losses but also to the peace movement um and it was also celebrated which i only discovered uh later uh by uh by a literature in science and technology studies uh in the mid 1980s and all of these and and it very much for this reception focused very much on this idea of participatory knowledge and collective uh knowledge and um so when i started to study that i i thought that i wanted to

48:47focus and what on what kind of economic knowledge uh was did this science from the workers perspective as they called it what kind of economic knowledge uh did it involve um so and then i started to read the the plan and and there was a plan mark two and the plan mark three so over the course of six years um and and i studied other documents around the plan and it was like the academic economic knowledge appeared primarily as the main thing that the plan repudiated so the plan criticized

49:21both uh the technocratic economics of the fabians and also the economic policies of labor uh in the 19 um it was a critique of of uh the common structure of the unions and like maybe i should i should have said that before that the combine was organized across i don't know 15 unions or something and across different sites uh

49:51of production so it was the the combine consisted primarily i think of of grassroots um activists within the company um so but back to the economic knowledge did present uh and it took me some time to really see that uh figures from from so-called social audits um and these were more or less input output studies that involved the entire chain of social costs that had to be considered in the event of factory closures

50:27so one such audit for instance was co-authored by the economist and peace activist mary calder the daughter of the calder you might be familiar with um and they examined how the closure of one plan would lead to a reduction of work in other companies so it was about the sectorial interactions about the effects on other industries and and in this way the study calculated the public costs of unemployment

50:59unemployment benefits but also the costs of retraining the rising health costs psychological costs and so on and so forth and based on these social audits the plan argued that the alternative plan was the better economic choice as well because ultimately it would require less public money than the management's approach um so and i think the point here is that this because you asked about uh economic planning and and political economy so the point here is that

51:29this economic argument was essential to the plan as much as public investment was essential for lucas aerospace i mean lucas aerospace was already a key industry like most more than 70 percent of its contracts were already coming from the public sector um and this made it quite obvious to argue that rather than allowing a multinational corporation to use public funds to basically create unemployment uh that this alternative plan was the better national strategy so it was the argument did work on the

52:03level of a national economy or had to work on this level as well um so indeed uh also yeah the plan did receive significant support from tony ben a prominent figure on the left wing of the labor party uh and and it also uh fit into the labor party's 1974 program that included plans to socialize about half of britain's industries and also to establish consumer organizations to produce according to social needs so it was very

52:37much that the lucas plan seemed to me it seems um to provide a model case uh of how such type of economic planning could look like um so yeah in this sense this plan was not just about participatory design or alternative use of technology um but it was indeed about a transformation of property relations involving the state um and consequently also a question about the relative about the relevant uh economic knowledge

53:11um yeah and so i'm i'm still not so as i said i i basically just started with this so um i would like as far as i know the the lucas plan turned into a model case for instance uh for attempts to introduce something like it was called popular planning on the level of a cities industry so for instance in the case of the greater london council which was the the highest um the highest level of administration of the city of

53:51london um when they tried to introduce popular planning some of the figures that were active in the lucas plan they were also active within uh the the um brought their expertise in in the economic expertise of the greater london council and so i think that here the question of economic planning and of economic knowledge becomes even more important like if you if you look at the greater scale of the city and the city's industry so i just think that this might be a quite interesting and fruitful place to look for

54:27um economic knowledge outside um economics departments even though i suspect there was some uh interactions but this is something that i still have to find out

54:41ah damn it i guess this means i have to go and learn some german so i can read this article

54:48thank you so much for stopping by the show and for entertaining our questions it's so nice to to have you finally here thank you so much for inviting me it is a very odd thing i have to say to talk about research in in such a format but i tried thank you so much

55:11join us again next month for another episode of smiths and mark's walk into a bar a history of economics economics podcast you you