Edward Lopez did me the great honor of organizing an 'author meets his critic' session at the recent APEE meetings on my Living Economics (2012).* David Colander was the chosen critic. David is in many ways the perfect person for this task due to his intellectual temperament, his wide ranging interests in the history of political economy, and the very simple fact that Living Economics is influenced in at least 2 significant ways by the work of Colander: (1) his work with Barkley Rosser and Ric Holt on the changing nature of the neoclassical mainstream very much fits with my own distinction between mainline and mainstream economics, and (2) his book, The Stories Economists Tell, was the role model for my own book at the earlier stages of its conception. Though influenced in direct and indirect ways by his work, Living Economics also departs in signficant ways from Colander's own narrative about the history and practice of contemporary economics.
Colander is a very challenging critic precisely because he has a slightly different take on the "mainline" of economic and political economy thought than I do. We have much that we agree on, but also enough differences to make his challenges difficult (and intriguing ones) for me. We have interpretative differences in theory, judgment differences about the state of play methodologically and analytically in contemporary economics and we have different priors with respect to the "art of political economy". Let me focus for this post, on this last point of difference. His latest work tends to link the complexity of economic relations with a concentration on the meta-institutional framework and the piecemeal interventions that are introduced by governments to address social ills. The critical points are: (a) government and market co-evolve, (b) there is public and private entrepreneurship, (c) that bottom-up reforms do not violate the principles of classical liberalism, and do not necessarily confront the same problems that have been identified in the political economy literature with top-down government planning and interventions. There is, indeed, Colander argues scope for laissez-faire activism. This argument has now been published in his new book, Complexity and the Art of Public Policy: Solving Society's Problems from the Bottom-Up (with Roland Kupers).
In my judgment, Colander's argument should be widely discussed among political economists --- especially those with classical liberal priors. In its own way, Colander's position pushes the limits of Hayek's distinction between the statesman as an engineer versus the statesman as a good gardener, and it also relates to Popper's piecemeal engineering position as opposed to rigid laissez-faire as well as dogmatic socialism. What does a 'good gardener' do in cultivating a vibrant economy? How do we engage in piecemeal engineering in the policy space? Bright lines in the sand type arguments simply might not fit into that description of the political economy of a free people. And if that is true, what, if any, stopping argument do we as positive political economists have to the scale and scope of government intervention? Colander's work raises these, and many other questions in my mind and should be discussed in depth.
Here is Colander discussing his thesis last summer:
*Living Economics has been translated into Spanish (2013) and Romanian (2013), and there has been discussion concerning translations into Chinese and Persian languages as well.