The politics of economics consensus

Posted: 28 November 2011 in Uncategorized
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Right-wing economists are giving the rest of us a bad name. They’re also creating a nostalgia for the kind of economics that got us into this mess in the first place.

Bill Keller correctly calls out the economists who are willing to associate their names with the kinds of misguided analyses and policies that are regularly provided by the Republican Party and right-wing think tanks. They’re giving the rest of us who work in and around economics a bad name.

But then Keller waxes nostalgic for the days when, in his view, “the public debate about economics pretty much stayed within the boundaries of accepted science.” What he’s referring to is the kind of discussion that took place in the 1970s between Milton Friedman and Paul Samuelson, who shared the same basic assumptions (based on the neoclassical synthesis) and then debated the details of the model (e.g., the slopes of the IS and LM curves).

What Keller seems not to understand is, it was precisely the kind of economics that “stayed within the boundaries of accepted science” (otherwise known as the Inside Job) that got us into this mess in the first place. The successors in the 1990s and 2000s to Friedman and Samuelson, the new classicals and the new Keynesians, were the ones who celebrated the new forms of capitalism based on deregulation, free markets, and globalization—the new set of shared assumptions—and who failed to even consider the possibility that a crisis might occur.

Why would we want to return to that “consensus”? Better to acknowledge its failure and occupy economics with a radical alternative.

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