Georges Michell, gathering storm
That economists tend to optimism whilst political economists tend to pessimism is something of a truism, albeit one that often goes unacknowledged. The reason for this bifurcation in psycho-analytic temperament is simple. Economists tend to think in equilibrium terms because most of the time the world appears, on the surface at least, to exhibit equilibrium tendencies. They comfort themselves with the following thoughts: (i) that, although disequilibrium scenarios exist, they are inherently difficult to understand; (ii) that there are a relatively small numbers of cases and such cases as one can find are sui generis (in that they probably need to be understood in their own terms anyway); (iii) that, as such, these exceptional events do not avail themselves readily of mainstream economic modes of analysis; and, (iv) given that they are rare anyway and that one has to concentrate on something, having a good appreciation of the 99.9 per cent of the time when things are stable provides at least decent compensation for blanking the difficult 0.1 per cent that remains. Appropriately reassured, they turn a blind eye to disequilibrium even whilst they acknowledge its possibility. In short, they model the world as if it were in a natural and benign condition of equilibrium not 99.9 per cent of the time, but all of the time.
By contrast, political economists are almost naturally suspicious of equilibrium and no less naturally fascinated by disequilibrium – the moment, indeed the moments, when it all goes wrong. They justify their suspicion and their fascination very differently from their economist counterparts. Yet they typically also appeal to four factors in so doing: (i) crises, though rare, are (or tend to be) genuinely transformatory and cannot simply be dismissed as complicating aberrations; (ii) impressions of equilibrium are typically misleading in that the seeds of crisis, if one is of a mindset to look for them, are invariably present even in contexts which might appear superficially placid and benign; (iii) it is almost impossible, without the benefit of hindsight, to differentiate between self-equilibrating processes and cumulatively destabilising processes (such as the inflation of an asset-price bubble) – and it is naïve and dangerous, to mistake the latter for the former; and, consequently, (iv) one should always be on the lookout for disequilibrating tendencies even in ostensibly equilibrium scenarios.
