Throughout history, there has been a tendency of elites – moneyed elites, intellectual elites, dynastic elites, religious elites – to regard themselves as fundamentally different from the rest of humanity. All fields of human endeavour develop elites, which are the brightest and best in those fields: so, for example, Olympic athletes are “elite” physical sportsmen and women, whose sporting prowess far exceeds the capability of ordinary mortals. But in many fields, once elites have developed they have a vested interest in maintaining themselves, whether or not they still have genuine excellence. And they create barriers to admission of people who are not “one of them” but who possess genuine ability. They use special language that is not known to ordinary people. They require particular social connections: in the most extreme form elite membership is restricted to members of the same family (dynastic elitism), but more commonly it is restricted to people who move in particular social circles (class-based elitism: the “old boys’ network”). In this last form, “who you know” defines whether or not you are part of an elite, not “what can you do”: this skews human endeavour away from developing excellence towards developing connections, and therefore further dilutes the actual ability of the elite, which forces them to become even more protective of their privilege. They may also prevent people who are the wrong sex, the wrong colour or who lack particular physical attributes which are not actually required for excellence in that field from becoming part of the elite. All of these are ways of defending their privileges.
So far, I haven’t said anything extraordinary. Elitism is a well-understood phenomenon and one which makes a lot of people very angry. But there is a necessity to the arrogance of elites, and it is not simply self-preservation. Individual members of the elite may lack genuine ability – they may simply have gained membership through their connections. But the body of knowledge and understanding that the elite AS A WHOLE has, however divorced it may seem to be from the understanding of ordinary people, nevertheless contributes to the development of human culture. And the defences that they put in place to protect their privileges enable them to maintain and develop unpopular and even apparently worthless practices that may in the future bring real value to humanity.
This will not be obvious to many people, so I will use a musical example. In the 20th century, so-called “serious” music went down what appeared to be blind alleys. It departed from any attempt to appeal to ordinary people, and became the province of musical academics, who enjoyed it for its structural challenge rather than its appeal to human emotion. You could say that it became completely divorced from reality. Milton Babbitt, in his famous essay “Who cares if you listen?” argued that ordinary people couldn’t really be expected to understand serious music, any more than they could understand theoretical physics, and so it didn’t matter if ordinary people didn’t want to listen to it. The fact that many talented and skilled musicians didn’t really enjoy listening to it either appears to have been lost on him. He even seems rather proud of the fact that music that no-one wants to listen to is commercially dead: but despite his claim that "serious" composers were self-funding, in reality he could only reject popular appeal because state and philanthropic funding of “serious” music made commercial viability unnecessary. “Serious” musicians at this period were rent-seekers, relying on their connections with the rich and powerful to secure the funding they needed to produce music of little popular appeal or commercial value.
Perhaps the darkest of the blind alleys was the mathematical approach of the post-Schoenberg serialist school. The most famous exponent of extreme serialism, Pierre Boulez, was severely criticised by fellow composers for his “dry, ascetic” approach and eventually dropped it in favour of something slightly less rigorous. In the end, music cannot simply be a mathematical system – it must appeal to human emotions or it loses its purpose.
Meanwhile, ordinary people with ability – barred from the elite, or even rejecting it outright - were developing new forms of music. The major musical developments of the 20th century were in popular music culture, starting with jazz and blues and moving on into the rediscovery of simple theatrical music in the American musical, the creation of rock&roll in the 1950s and 60s, and the development of contemporary popular music from indigenous musical forms. Deprived of state and, often, philanthropic funding, popular music forms and develops through the free market: music that is not popular with at least a significant proportion of people does not survive. Because of this, some forms of popular music have become “tribal” in nature: they are associated with particular groups of, especially, young people for whom the music they listen to is a part of their group identity, and its quality as music is of secondary importance. Anyone watching the reality TV shows will be aware that participants often seem to inhabit particular cultural silos, and their followers are the people who self-identify with that silo: the winner may not be the person with the most musical talent, but the one whose cultural silo is the most dominant. In popular music, “survival of the fittest” is the name of the game, but “fittest” doesn’t necessarily mean musical excellence.
It would be all too easy to conclude that the “serious” music of the 20th century was simply the death rattle of an obsolete art form. But that would be far from the truth. As serious music became ever more divorced from commercial reality, becoming the province of academics and no longer requiring mass popularity for its survival, it became more experimental. It was in serious music that the possibilities of electronics for creating different musical forms and textures were first explored, and it was also in serious music that the sounds of nature were appreciated as music in their own right and incorporated into musical creations. And it was in serious music that forgotten parts of Western musical culture were rediscovered and transformed into contemporary musical forms. Yes, many – perhaps most – of these experimental musical creations will not survive the test of time. But their value lies in the groundwork they provide for contemporary musical developments. Today we are seeing the important developments in popular music coalescing with the equally important developments in serious music to create new, vibrant, exciting and challenging music for the 21st century. Had “serious” music not been protected as it was, and enabled to flourish in its academic hothouse, it would probably have died – and we would be the poorer for it. The arrogance of the musical elite, and its connections to those with financial power, enabled this tender plant to survive the turbulence of the 20th century musical melting pot.
I would argue that the same is true in economics. In fact if anything, economics has become even more “hothouse”, and even more divorced from reality, than “serious” music. Economics has become dependent on elegant mathematical models whose relationship to the real world is questionable: it is a standing joke that in economics, if the evidence doesn’t agree with the findings of the model, you change the evidence. In some cases – notably in models of the financial system, which are the foundation of monetarist economics - the models are founded on a wrong understanding of how the world actually works. When the foundation is wrong, so is everything built upon it: but the arrogance of the economic elite makes them unwilling to accept that they may have got some things wrong, so they silence people who point this out and put up academic barriers preventing funded research into anything that questions the foundations on which they have built their models of the world.
And as with “serious” music, when economics becomes so divorced from reality that it fails adequately to explain the real world in which people live, people reject it. People rightly ask why academic economists failed either to predict or adequately explain the financial crisis, whereas heterodox economists working in the real economy – many of them untrained in formal economics – not only predicted it but correctly identified the causes. There is a real danger that the anger people feel over what they see as the failure of mainstream economics leads to rejection of mainstream economics in its entirety and, importantly, withdrawal of funding for academic economic research. This, I feel, would be a mistake.
We may not see the relevance of dynamic stochastic general equilibrium models in a world which manifestly is not in equilibrium. But that doesn’t mean that these, and other mathematical models, have nothing to contribute. The redefinition of the foundations of economics that is currently being done by heterodox economists will inevitably result in many of the models beloved of academic economists becoming obsolete: as with much of the experimental serious” music of the 20th century, they will not survive the test of time. But there will be models that remain relevant, and there will be others that appear obsolete but that will in due course be redeveloped and find new life in the new economic paradigm. If we allow them to disappear, our economic understanding in the future will be poorer.
The academic economic elite is fiercely protective of its privileges, which is a matter of some annoyance to those who understand that it is dependent on state and philanthropic support (and is therefore arguably rent-seeking). The defensiveness of academic economists is a double-edged sword. On the one hand, as I argued above, the protection they seek to maintain will ensure the survival of unpopular and even apparently worthless economic models so that they can in due course find their place in the future economic paradigm. But on the other hand, if the academic elite’s defence of its privileges extends to refusing even to admit that some of their foundations are wrong, they may find that the rich and powerful are no longer willing to support them. Yes, “serious” musicians got away with dismissing developments in popular music as unimportant, but their work did not impinge on people’s lives in the same way as economists’ work does: people can ignore music they don’t like (though they may complain about use of their taxes to fund it), but they can’t ignore wrongly-founded economic thinking when it contributes to a major financial disaster. Economists should fear the popular vote: they may not be commercially dependent on popularity themselves, but the politicians who support them are, and when funds are tight (as they are at the moment) supporting an apparently useless economic elite may be more than the popular vote is prepared to accept. Elite arrogance is necessary, but if it goes too far it can destroy the very thing it aims to preserve.