Keynesianism in the Great Recession

|Peter Boettke|

Over at Crooked Timber, Henry Farrell links to a paper of his (and John Quiggin) on fall and then rise of Keynesianism in the context of the recent global financial crisis.  The paper is well worth reading and thinking seriously about.

One of the things I find fascinating about the last decade is how much of the theory-practice divide is bridged in the blogosphere (broadly defined to include also online postings of abridged working papers).

 

 

Comments

[Xerographica]

As I mentioned on David Friedman's blog...
http://daviddfriedman.blogspot.com/2012/03/better-way-of-learning.html
I firmly believe that all libertarians should RSS subscribe to the Crooked Timber Liberal blog. Because the second we think that we have a monopoly on truth is the second we lose. In this regard...this post of yours indicates that you understand this concept a lot better than Henry Farrell does...

http://pragmatarianism.blogspot.com/2011/11/economic-fairytales.html

[austrian away]

Yes, I am convinced that the blogosphere is the future of academia. In fact, I just read a story in the newspaper this morning that the Brittanica encyclopedia (30+ volumes) is now being discontinued and will only be accessible online. This, I think, is just a prelude of what is to come. Hardbound journals and books will become increasingly rare, and academics will gradually move into the world of blog. I have been out of the "economics" loop for a while, but I can speak to the "law" context. Most Professors in law schools are more renowned for their blogs than they are for individual journal articles. One example: Professor David Crouch at my law school is recognized as one of the country's leading experts on Patent Law. This is seen not by his actual publication list, but rather from his blog -- Patently O, which is frequently cited by judicial opinions!!!

So, yes, blogs are the future. Let me also say that I think this is a good thing. Anyone can write a blog, while journals typically only publish faculty professors. In the blogosphere, Robert Vieanneau, an independent scholar, is no different from Dr. Boettke, a tenured Professor at a prestigious univeristy. That, I repeat, is a good thing.

[McKinney]

I’m not clear as to what the authors’ conclusions were about the history, but the history is fascinating! My own conclusions are the following:

Very little change happens without crises. Crises don’t propose solutions but merely dethrone dominant paradigms.

Communicating with the public is important. The Keynesians like Krugman and Stiglitz had political power because they were known to the educated public, Krugman through his column and Stiglitz through his books. Neo-classicals had little political power because they were unknown to the public.

If Austrians want to change policy, they need to communicate better with the public, as Ron Paul has done, and less with mainstream economists.

Politicians respond to pressure from the public. Economists do little more than provide academic cover for what politicians have already decided to do as a result of public pressure.

Neo-classicals were mute during the debate because the failure of their theory that monetary policy was sufficient had embarrassed them.

The fact that Krugman and Stiglitz still cling to paleo-Keynes after the disaster of the 1970’s and the failure of stimuli in the recent crisis, proves that their ideology is impervious to any kind of assault. They have effectively removed it from any possibility of proving it wrong. The same can be said for the neo-classicals, too, after the recent crisis.

The fact that no Keynesians or neo-classicals have converted to Austrian econ, even though some neo-classicals became paleo-Keynesians for a while, proves that no amount of empirical evidence can shake their faith.

[McKinney]

Austrian away, it is a good thing in that it diminishes the appeal to authority.

[J Oxman]

Blogs will not replace journal articles and careful research. Getting articles into journals is hard and requires a lot of dedicated effort. Being published is a signal of ability as a researcher. Having a blog is not. Having a popular blog is not. Blogs generally are not areas of deep thought and sustained conversations. That's why so many of us post a few points about something and then offer working papers or journal articles for those who want a deeper discussion of the issue at hand.

Whining about the inability to get publications in journals is just that: whining. I'm sympathetic to non-mainstream authors who have difficulty getting articles into the mainstream journals. But there are other options: have multiple streams of research (my method); focus on the area of overlap between non-mainstream and mainstream so you can publish in the broader journals (a good idea); focus on the non-mainstream journals. This last option has gotten a lot more feasible in the past few years, as the number of journals has increased and the focus of each has narrowed.

[Peter Boettke]

I am in agreement with J Oxman --- this is the no whine zone, and blogs will NOT substitute for scientific journals, just as devoted websites will NOT replace scholarly tomes.

Blogs and website are cool, but they are what they are. Just as correspondence college is cool and gives educational opportunity to non-traditional students. But the online university is NOT a substitute for campus education in terms of the quality of education delivered.

[austrian away]

J Oxman, I disagree. There is no reason why blogs should produce inferior output vis-a-vis academic journals. Perhaps you are right that journals require more formality --- such as, e.g., extensive footnoting. But that is only indicative of research ability --- it doesn't actually address the NOVELTY of the argument. In fact, after having read thousands of jounral articles in my lifetime, I can say this: about 85% of a journal article consists of just repeating and/or summarizing what has already been published in the literature. Most articles spend most of the time summarizing the debate, and then there is a short paragraph or two adding something new to the discussion. What is great about blogs is that you can skip having to summarize -- and footnoting -- the literature. You can get straight to the point.

And blogs also facilitate discussion. Imagine the great debates in the Austrian context. I am thinking of the Hill-Horwitz debate in Critical Review and the Boettke-Caplan debate on socialism in Critical Review. Imagine how much more productive these debates would be if, instead of each writing a journal article of 20 pages, they exchanged several posts in a blog. I think that sort of debate would be much more interesting than -- article -- response -- rejoinder -- end.

And, not to mention: Nearly every academic scholar I follow has a blog now, anyway. But, here is the rub: some are more substantive than others. And that, in my mind, is what makes for a good academic blog: substantive content.

[J Oxman]

Austrian Away,

I see your argument as being analogous to one which would posit that journal articles will replace books and the preferred medium of intellectual exchange. This has not happened because each medium serves a separate purpose.

Also, I think we must read different journal articles. My branch of economics, finance, is characterized by lengthy articles rich in data analysis. We make an effort to minimize summarization of previous arguments, since one can expect readers to be able to do their own homework. Essentially, you put in enough lit review to contextualize your study and then have at it with your new stuff.

[Xerographica]

McKinney, you're so darn right that communicating with the public is essential...

http://www.debatepolitics.com/general-political-discussion/121258-stefan-molyneux-bryan-caplan-understanding-economics.html

...I wish I was better at it.

We really need to start a movement! Let's start a Magna Carta movement! It was progressive to shift the power of the purse from a king to parliament and it would be even more progressive to shift the power of the purse from parliament to taxpayers.

"It follows, then, that a less centralized society has the advantage of a greater diversification of its performance across a larger number of preceptors. This is because diversification here dilutes the impact of the ability, or the lack thereof, of each preceptor on the aggregate societal performance." - Raaj K. Sah, Fallibility in Human Organizations and Political Systems

http://pragmatarianism.blogspot.com/2012/02/tax-choice-strategy-for-occupy-movement.html

A Magna Carta movement sounds good doesn't it? We can steal the motto from Britney Spears..."Oops, I did it again"...to emphasize fallibilism and highlight the importance of not putting all our eggs in one basket. It would also work with the whole idea of it being the second Magna Carta.

[keylogger]

Thank you so much in putting together this post, so much appreciated because it has helped me in my research.