Home > The Economics Profession > “New” economic thinking

“New” economic thinking

April 9, 2010 Leave a comment Go to comments

from David Ruccio

Given the lineup of speakers and topics, it’s not clear there’s going to be a lot of new economic thinking going on at “The Economic Crisis and the Crisis in Economics” conference this weekend. 

What concerns George Soros is that existing economic models were not useful for predicting the current crises. So, he wants better models.

What the rest of us want is an opening up of the discipline itself. Until that happens, all the new economic thinking taking place—which it has been and is, around the world—won’t get a hearing in classrooms, journals, and the mass media.

But, as Nick Krafft points out, even such a timid inclusion of heterodox views is no longer permitted at the University of Notre Dame.

About these ads
Categories: The Economics Profession
  1. Danny L. McDaniel
    April 9, 2010 at 6:10 pm | #1
    Reply | Quote

    Models?! All the signs were there that a major economic downturn was inevitible. In fact, more lay people with little or no economic education sensed that the economy was starting its downward spiral than highly educated know-it-all economist. Create the ultimate “model” and watch it sit on a shelf. It is not models but mentalities that must change and that is looking less likely ever passing day.

    Danny L. McDaniel
    Lafayette, Indiana

  2. Peter Radford
    April 9, 2010 at 8:54 pm | #2
    Reply | Quote

    David: My view is that a search for better models puts the cart before the horse: it presumes we know what to model. This is why I agree with the insistence that the conversation be widened to include more voices. The rush to find better models will fail if the people doing the modeling are still drawn from the same intellectual pool. Right now it seems that the ‘crisis’ in economics is confined to a particular part of economics, albeit the mainstream part, where the sudden failure of their entire construct apparently mystifies them. This is despite the ongoing critique of other economists. Meanwhile, other parts of economics are healthy and replete with useful ideas and insights that are just as ‘economic’ as the mainstream, but are largely sidelined by bureaucracies like that of Notre Dame.

    The reduction of the discussion to such a specific, bureaucratically sanctioned, group of participants has impoverished everything they do, and undermines its chances of producing anything other than a ‘re-do’ of old ideas.

    I would have a great deal more confidence if some of the architects of orthodoxy had acknowledged their apparent failure. That would be honest, and display an openness to ongoing learning.

    To me it is a question of questions. Are we asking the right ones?

  3. Michael
    April 9, 2010 at 9:38 pm | #3
    Reply | Quote

    Um, yeah. Every model in existence which had to do with finances or bubbles predicted this collapse fairly trivially.

  4. s h a r o n
    April 11, 2010 at 10:25 pm | #4
    Reply | Quote

    I apologize in advance if this book has been noted/reviewed/discussed here on PAE. (I mean, RealWorldEconomics). I would have no better source for reactions/reviews/opinions about this book than this group.

    Raj Patel. The Value of Nothing: How to reshape market society and redefine democracy. (c) 2010 Picador Paperback Original

    The emphasis seems to be on an alternative to capitalism, drawing on the early history of Commons. While I appreciate the ridiculous non-likelihood of any such paradigm shift getting a foothold in America, I am always eager to hear reasoned arguments–even if philosophical, pie-in-the-sky type.

    That said, the issue/historical importance of the commons was finally made clear to me in this book, in spite of the fact that I sat in Garret Hardin’s class in the early 1960s. Patel all but summarily dismisses Hardin’s stance. Patel notes that Hardin coined the term “tragedy of the commons”, and who suggests that the culprit is “homo economicus: “When faced with a shared resource, people will be overrun by their own selfish desires to consume it, even if they know that they’re destroying it in the process (p. 92-93)).” In summary, Patel says that in this “tragic” model, “People are, for whatever reason, prepared to override their own better judgment in service of their selfish natures (p. 93)”.

    Is this why we cannot have a more socialistic/commons type economy, and need capitalism, supported by “democracy”?

    Above and beyond this particular issue, although related to it, I believe, is the fact that the earth/globe/global economy must be carved up into “nations”…but I’m willing to leave that one for another day.

    Thanks for helping me work this out…

    S

  5. purple
    April 16, 2010 at 12:37 am | #5
    Reply | Quote

    I’m not sure George Soros has the same vision for a successful economy as a coal miner in West Virginia. Start the conversation there.

  6. rushcocoa
    April 22, 2010 at 7:03 pm | #6
    Reply | Quote

    what about the technology/internet factor, that speeds up certain parts of the process—been wondering about this in respect to things like the mortgages themselves, as the internet was able to advertise the loans & industry jobs to more people? what role is there for time or for huge increase in communication in the models?

  7. rushcocoa
    April 22, 2010 at 7:05 pm | #7
    Reply | Quote

    the conference site has presentations & video up:
    http://ineteconomics.org/initiatives/conferences/kings-college

Leave a Reply

Fill in your details below or click an icon to log in:

Gravatar
WordPress.com Logo

You are commenting using your WordPress.com account. ( Log Out / Change )

Twitter picture

You are commenting using your Twitter account. ( Log Out / Change )

Facebook photo

You are commenting using your Facebook account. ( Log Out / Change )

Cancel

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 1,285 other followers