In our absorbing and vitally important cover story, “What Social Science Does—and Doesn’t—Know,” Jim Manzi argues that the experimental method in the social sciences has failed to produce much in the way of predictive rules about human behavior, including a vast array of government programs often justified with this or that study. The reason: the “causal density” of human life resists controlled experimentation. Our scientific ignorance of the human condition remains deep, Manzi says, which is why we need to support trial-and-error learning and maintain skepticism about social engineers’ hubristic dreams. The application of the experimental method to the natural world, however—a legacy of the Scottish and British Enlightenment—is a main driver of modern prosperity, Joel Mokyr argues in “Enlightened and Enriched.”
Like inebriated homeowners during the now-burst housing bubble, American cities and states have taken on colossal amounts of debt in recent years—so much debt that many now face budget crises after the economic downturn’s decimation of tax revenues. Once upon a time, reports Steven Malanga in “The Muni-Bond Debt Bomb,” such state and local government borrowing financed essential infrastructure, helping economic life flourish; these days, a lot of the debt has been used to hide festering fiscal problems or to subsidize development boondoggles (examples include money-losing minor-league stadiums and convention centers and empty small-city art museums). Unless this debt bomb is defused, we’re all at risk, Malanga warns—and concludes his piece with instructions on how to do it.
The financial and economic crisis is now two years old, and with U.S. unemployment stuck at 10 percent and private-sector lending still anemic, it’s clear that we’re not safe yet, despite some improved indicators. Over the past year, hundreds of books have tried to explain what happened and how to keep it from happening again. In “Surveying the Wreckage,” Nicole Gelinas—whose own book on the crisis, After the Fall, should be obligatory reading for policymakers—takes the measure of ten of the best, including works by Nouriel Roubini (“Doctor Doom”), MIT economist Simon Johnson, and journalist Michael Lewis. As Gelinas argues, the mainstream narrative—that the financial crisis was a free-market failure—gets it wrong. The true story was just the opposite: over the two decades leading up to 2008, financial markets became increasingly unfree, with government bailouts of big or complex firms encouraging excessive, and eventually catastrophic, risk. Worse, Gelinas observes, Congress’s efforts to reform finance threaten future distortion and disaster. What we need is straightforward: across-the-board borrowing limits for all financial companies and much greater transparency.
A related piece in this issue, Guy Sorman’s “The Free-Marketeers Strike Back,”, sketches the outline of a counter-narrative of the crisis, based on the latest thinking of leading free-market economists. Among their findings: the recession, caused by skyrocketing energy costs and starting as early as 2007, helped trigger the financial crisis, rather than the reverse; loose monetary policy during the Alan Greenspan era at the Federal Reserve expanded a massive credit bubble; and economics needs to embrace a broader intellectual approach, so as to bring together more of what we know about the complex interaction of markets.
Everyone is familiar with articles about the supposedly gloomy prospects of classical music; we hear that orchestras are struggling, that recording sales are dwindling, and that young people have zero interest. Heather Mac Donald dismisses the declinists as lacking historical perspective and celebrates “Classical Music’s New Golden Age.” A period-music movement that has brought long-forgotten masterpieces to life again; widespread virtuosity that would have astounded earlier ages; more listeners than ever before; an influx of youthful talent from around the globe—Mac Donald’s essay captures the continued vitality of one of the West’s greatest art forms. And David Watkin reports on the revival of another in “Something to Love Among the Ruins,” a description of three British architects’ battle to design and build in the classical tradition.
—Brian C. Anderson
