Climate change and Keynesianism

Back in December 2004 the magazine Science published science historian Naomi Oreskes’ summary of an analysis of the abstracts of the peer-reviewed scientific studies dealing with climate change that had been published between 1993 and 2003. In the article, Oreskes reported that, of the 928 abstracts analyzed, fully 75 percent endorsed or accepted the hypothesis of anthropogenic — i.e. man-made — global warming while 25 percent dealt with methodological issues but took no position on the hypothesis itself Significantly, she said, none of the studies disputed the hypothesis.

This article was the origin of the oft-repeated assertion that there is a scientific “consensus” that global warming is caused by the activities of humans. It figured prominently in Al Gore’s fear-mongering propaganda film An Inconvenient Truth, and it was no doubt what was behind then President-elect Barack Obama’s bald assertion at last November’s global warming summit that “the science is beyond dispute”.

Oreskes’ finding begs credulity. Are we really to believe that, of 928 peer-reviewed studies, none — not even one — challenged the claim that global warming is caused by human activity? Such unanimity, if it exists, should set off alarm bells — not about global warming, but about what passes for scientific inquiry these days.

Science is not about “consensus”. It is about the rigorous, disinterested pursuit of truth. It is about forming hypotheses and testing them, either against actual observations or in controlled experiments. It is about vigorous debate among scientists and giving the skeptics among them the chance to publicly challenge conclusions reached by their peers.

There is no such thing as “settled” science. Much of the science we accept today as settled was at one time considered heretical, and some ideas considered heretical today one day will overthrow the existing consensus.

The peer-review process is supposed to protect the disinterested pursuit of scientific truth, but it can easily be — and often is — perverted and turned into a weapon to enforce orthodoxy. Whether an article is accepted for publication or not is often a function of how closely its conclusions adhere to the prejudices of the reviewer. If the reviewer disagrees with a study’s conclusions, he or she often will just assume the study’s methodology is faulty.

Back in the ’70s, the late Michael J. Mahoney, then a psychology professor at Pennsylvania State University, tested the peer-review process by preparing two versions of a study for 75 reviewers. Both versions used the same data and employed the same methodology, but one presented conclusions that tended to support reviewers’ prejudices, while the other challenged them. Predictably, reviewers tended to praise the research methods used in the versions that validated their own views and harshly criticized the methodology of the studies that supported an opposite conclusion.

Actually, reviewers for the scientific journals aren’t likely to see too many submissions that contradict their prejudices. Unorthodox scientific views are screened out before the articles are even written. It costs money to do research, and the primary sources of funding for basic research (i.e., research without a direct commercial application) are government agencies. The chances of obtaining funding are much greater when the researcher submits a grant proposal that conforms to the prejudices of the grant review committee — which, naturally, is made of people whose views are consonant with those of the bureaucrats who run the agency.

The enforcement of orthodoxy by journal editors and reviewers and grant administrators virtually insures enforcement in the universities as well. In the academic world, tenure and promotion — in fact, even getting hired in the first place — depend on one’s demonstrated ability to bring in grants and get published. A scientist whose views don’t conform with those of his peers may soon find himself unemployable.

In the climate sciences, this clearly has been the case. Three years ago, Richard Lindzen, Alfred P. Sloan Professor of Atmospheric Science at MIT wrote in The Wall Street Journal that dissenters from the anthropogenic global warming hypothesis

…have seen their grant funds disappear, their work derided, and themselves libeled as industry stooges, scientific hacks or worse…And then there are the peculiar standards in place in scientific journals for articles submitted by those who raise questions about accepted climate wisdom. At Science and Nature, such papers are commonly refused without review as being without interest.

“Consequently”, writes Lindzen, “lies about climate change gain credence even when they fly in the face of the science that supposedly is their basis”.

There is something familiar about all this, or, as Yogi Berra put it, “it’s like déjà vu all over again.”.

In 1936, John Maynard Keynes published The General Theory of Employment, Interest, and Money, an attempt to explain how a modern, unregulated capitalist economy could get stuck in an equilibrium in which there were idle factories and widespread, permanent unemployment. Appearing, as it did, in the midst of the 1930s global depression, the book caught the attention of economists, many of whom were at a loss to explain the why the economy could not seem correct itself.

Essentially, Keynes argued that a deficiency in aggregate demand — which consists of personal consumption expenditures, investment spending, net exports and government spending — is responsible for the persistence of a depression, and that, for various reasons, the usual automatic adjustment mechanisms could not be relied upon to restore full employment. The only solution, he argued, was massive government spending.

The Keynesian revolution swept through the economics profession like a tornado through a trailer park. By the end of the 1930s, virtually all of the economics journals and university economics departments in the United States and other western countries were dominated by Keynesians. (Government agencies, which in the U. S. are also major employers of economists, were “Keynesian” even before Keynes published his General Theory.)

Seldom in the history of any of the sciences has a new orthodoxy supplanted an old one with such blinding speed. Even economists who knew better — or who should have known better — were caught up in the Keynesian rapture.

There were dissenters, of course, but they were largely shoved aside and ignored. Perhaps the most notable of these was Ludwig von Mises.

One of a number of Jewish intellectuals forced to flee Nazi-dominated Europe, Mises had been one of the Old World’s most eminent economists and had held chairs at the University of Vienna and at Geneva’s prestigious Graduate Institute of International Studies. He was well-known as a severe critic of government intervention in the economy and thus, despite his eminence, he did not find the welcome mat rolled out when he arrived in the United States in 1940.

As the late Murray N. Rothbard, who would become one of Mises’ most prominent American disciples, wrote indignantly,

A refugee deprived of his academic or social base in Europe, Mises emigrated to the United States at the mercy of his new-found environment. But while, in the climate of the day, the leftist and socialist refugees from Europe were cultivated, feted, and given prestigious academic posts, a different fate was meted out to a man who embodied a methodological and political individualism that was anathema to American academia. Indeed, the fact that a man of Mises’ eminence was not offered a single regular academic post and that he was never able to teach in a prestigious graduate department in this country is one of the most shameful blots on the none too illustrious history of American higher education.

Rothbard himself would experience the same ostracism. Although his academic credentials were virtually identical — undergraduate mathematics major; Ph. D. in economics from Columbia — to those of the future Nobel laureates Milton Friedman and Kenneth J. Arrow, Rothbard was unable to obtain a suitable academic post after he completed his doctorate in 1956.

The story was much the same for other economists who failed to toe the Keynesian line. Access to research grants, the professional journals and the universities was effectively denied to many of them.

Perhaps the most outrageous example of the suppression of dissent from the Keynesian/interventionist orthodoxy was the “Virginia purge” of the 1960s.

Largely because of the work of faculty members like G. Warren Nutter, Ronald Coase, James Buchanan and Gordon Tullock, the University of Virginia was becoming known as a center of skepticism of the then-prevailing wisdom that government always knows best. Nutter challenged the then-fashionable notion that unregulated capitalist economies tend toward increasing concentration. Coase argued that many problems that seem to call for government regulation, such as pollution and the allocation of broadcast frequencies, could be solved by an appropriate definition of property rights. Buchanan and Tullock had developed a whole new field of study — public choice — that challenged the idea that governments could be disinterested entities whose actions were always in the public interest.

One would think that a university would take pride in being the academic base of innovators such as these. Not the University of Virginia: Tullock was denied tenure and Buchanan and Coase were forced out. (As it turned out, the last laugh was on them — Buchanan and Coase were later honored with Nobel Prizes, and Tullock went on to a distinguished career and has been mentioned as a possible future Nobel laureate himself.)

The one apparent exception to the suppression of dissent was Milton Friedman of the University of Chicago, but this was mostly a case of the exception proving the rule. Friedman’s heresy was his rediscovery of the quantity theory of money. His research on monetary economics — and the research of the legion of future economists who passed through his money and banking seminar — challenged and eventually helped undo the Keynesian consensus.

But Friedman was a Keynesian when he was hired to teach at Chicago. His epiphany came after joining the faculty. And he and his students were able to get through the peer-review process at least partly because one of the most prestigious economics journals, the Journal of Political Economy, was published by the University of Chicago Press.

Eventually, Keynesianism unraveled in the economic reality of the post-World War II era. Its explanatory power proved to be deficient, and the theory was challenged additionally by such inconvenient notions as wealth effects, crowding out and rational expectations. By the 1970s even neo-Keynesians were admitting that Keynesianism was, in reality, a disequilibrium theory.

But Keynesianism never lost its appeal to those who believe the government can manage people better than they can manage themselves. Even today, politicians and the news media, without thinking much about it, seem to just assume that an increase in government spending — any increase — is good for the economy.

Like Keynesianism, the idea of anthropogenic global warming appeals mostly to those who want a bigger role for government in our lives. It is not surprising that those who believe that only massive government intervention can get an economy out of a slump also believe that drastic government action is necessary to avert a climate disaster. Of 219 member of the House of Representatives who voted for the Waxman-Markey global warming bill, 203 had also voted for the $787 billion stimulus package earlier this year.*

It’s not about the science. It never was.

It’s about the conclusions, and whether they support a particular political agenda. The so-called “consensus” on global warming is a myth. That the earth is experiencing a long-term warming trend is not in dispute, just as there was no dispute in 1936 about whether the world was in the midst of a global economic depression. But there were and are differing views about the causes, degree, and consequences.

Paul Reiter, chief of the infectious diseases unit at the Pasteur Institute (and a former member of the Intergovernmental Panel on Climate Change), told a U. S. Senate committee that

…such consensus is the stuff of politics, not of science. Science proceeds by observation, hypothesis and experiment. The complexity of this process, and the uncertainties involved, are a major obstacle to meaningful understanding of scientific issues by non-scientists. In reality, a genuine concern for mankind and the environment demands the inquiry, accuracy and scepticism that are intrinsic to authentic science. A public that is unaware of this is vulnerable to abuse.

While I cannot speak as authoritatively on climate science as I can on economics, I can recognize when an issue is not settled. That’s when the proponents of a position insist that it is. If their position is as rock-solid as they say it is, then they should have no fear of debate. When they refuse to engage their opponents in honest debate, they have abandoned the world of science for the realm of politics.

*And here’s a bit of irony for you. Ronald Coase, one of the economists purged from the University of Virginia in the 1960s, was also the unwitting father of cap-and-trade. In his seminal article, “The Problem of Social Cost”, Coase proposed internalizing external costs, such as pollution, by appropriately defining property rights to pollute, which could then be bought and sold. This, he showed, is a more socially efficient way of dealing with external costs than regulating or directly taxing the activities that generate them.

From Nolan Chart.