Thanks for the response and you've cottoned on to the idea behind my terse question. However, you've chosen a bit of a difficult one. For example, a neo-Keynesian would have little in common with a post-Keynesian. Its one of the more difficult schools to unravel.
To what extent would you argue that the economic system is unstable and government interventionism is vital? (i.e. is it just about reducing the severity of recessions?)
I certainly wouldn't get all arsey and ignore any one school of thought. Whilst there can be a level of cross-fertilisation (e.g. neoclassical labour economics "borrowing" marxist analysis), once we look at the political economy we have clear incompatibility.
I wouldn't use Becker's type of analysis as a good example for your stance. It follows, rather unflinchingly, neoclassical theory. The same economic models used to understand boring Econ 101 examples are used for subjects perhaps better suited to the more general social sciences
Economics comes originally from philosophy. In terms of the history of economic thought, modern economics (as taught by the good wife) is only a minor aspect of political economy. Politics and economics cannot be separated and we should celebrate that.
That sounds too much like data mining!
The great thinkers of economics weren't the people who just focused on fields of thought. Keynes was a revolutionary because he sought to make models that conformed to reality even when most of the field of economics had a hard time explaining the economic phenomena of the time without running into preconceived notions of how the economy works (Say's Law, excessive focus on the long-term, AS only mattering). Friedman (before he became more of a "champion of free markets" went against the overly interventionist tendencies of economists during his time through his long-term income consumption function, work on monetary history, and other analysis as well. Friedman, like Keynes, was mostly in a very small group of economists who saw that the current "fields of thought" were insufficient. Creating schools of thought and focusing too much on that makes it seem like there aren't correct and incorrect models. It's simply viewed as a different perspective. That may work in fields that do not have any empirical measures, but economics needs to be driven by a willingness to compare models to fact, and using real insight to help shape models. Focusing too much on schools of thought distracts one from the search from economic truth. I have nothing against simplifying models into more verbal terms, but becoming too general can greatly distort the quality of economic analysis.
I can't quite agree with that. Keynes influence reflects a realisation of the weaknesses of the orthodox position and failure to appreciate the consequences of uncertainty on economic modeling. That does not make him revolutionary, particularly with the neo-Keynesians able to twist the analysis to bring the key assumptions of neoclassicism back into play. The revolutionary nature of Keynesianism only comes into play where schools of thought are compared: e.g. the combined use of post-Keynesianism and Marxism to understand crisis theory and capitalism's inherent instability.
There is certainly nothing radical about Friedman. His analysis also falls into the trap of the schools of thought. We have the corruption of Keynes via the likes of IS/LM and the Phillips Curve. This ensured that it was straight forward (when these orthodox constructs failed) for Keynesianism to dribble towards neoliberalism. Friedman just became a means to support that process. That is not to say it wasn't useful: it at least provided a means to advertise to the Econ 101 student the variation in Keynesian thought.
The problem with economics is that it has evolved to ensure assumptions and predictions are easily confused. Consider the likes of neoclassical economics and innovators like Becker. Is there any real debate over core assumptions? Nope! Instead, the evolution of economics becomes about tweaking the model (providing a exaggerated role for the technician) to ensure that known behaviour can be predicted. The School of Thought is not questioned, with neoclassical economics becoming a means to hide from the integration of the social sciences.
Are we honestly going to assert that Friedman and Keynes (Keynes more so) didn't significantly affect the field of economics? Can you find any professor, even a European professor who would agree with that? Keynes helped us focus on the value of nominal variables and their impact on the overall economy (among other things). He helped economists see that the short-term was important in analysis rather than just abiding to long-term analysis (which is where certain predictions of models deemed "neoclassical" tend to be mostly accurate). Friedman help move economics away from the naive belief that government could solve most economic problems (which is something Keynes never proposed). His long-term income consumption function helped move away from an overly simplistic consumption function (although a similar function was developed by others, simultaneously). He helped focus economists on the effects of monetary institutions (that is not to say he wasn't occasionally wrong on the matter). He made the prediction that the Philip's curve would fall apart when government attempted to manipulate inflation to curve unemployment (which he was correct on, and showed that workers aren't pushovers). It's an extraordinary statement to say that these thinkers didn't have a revolutionary impact on economics (along with Marx, even if many of his ideas are a bit grandiose, and many others).
That's why identifying with schools of thought are a poor decision. If you say you believe in this field you're going to be less willing to accept empirical evidence that asserts that one of the school's big assumptions is incorrect.
Keynes is certainly an important figure. However, neo-Keynesianism was not a radical change in economics. Whilst it is clearly a bastardisation of Keynes' analysis, it represented nothing more than a method to maintain the key assumptions of neoclassicism. I'd certainly support the premise that post-Keynesianism, as a School, is awfully important if one is to have any understanding of capitalism.
Much of Friedman was an attack on neo-Keynesianism. Given the weakness of that stuff, it is not surprising that the subsequent analysis- such as monetarism- has been lost in the wilderness and only tolerated by Econ 101 students that require simple stuff like IS/LM and the Phillips Curve as an introduction to macro modeling
Very few Schools hide from self-criticism. It is perhaps only neoclassicism that is so precious of its core assumptions. This partially reflects how it has enabled the technician to dominate its development. Copy and paste of equations dominates the publications, with the successful economist only a merchant that tweaks and experiments with additional greek letters.
How many people refer to the AER, Econometrica, JET or the EJ in today's world? The divorce of the social sciences is bogus and the economist that uses maths to hide from that reality is merely attempting to hide from Economic's increasing irrelevance.
I'm happy with the use of econometrics to test hypothesis. I'm also happy with the use of mathematical modeling where warranted. I'm not happy with the attempt to hide from the craft of the discipline: political economy
I wasn't talking about the school. I was talking about the individual. He made a huge impact upon the field. Just like Albert Einstein made a massive impact on astronomy and physics. To focus on a school gives a general bias. "Oh this model is classified as neoclassical, therefore it will inherently give too much rationality to consumers." It's the kind of classification that prevents an unbiased analysis.
The weakness? Was his prediction on stagflation weak? It was dead on.
Political economy is a subfield. You cannot test a hypothesis if you don't make sure it is rather exact (which mathematics allows for). There seems to be this constant push by you to switch economics into a field of conjecture, which would lack the precise logical structure of mathematical economics. I'll agree that some individuals misuse mathematics, but on the whole it has improved economics.
He created a school.
I've already given you the following quote from Reglar (The Descent of Political Economic Theory: Keynes, Keynesian economics, from bastardised Keynesianism to Neo Liberal Hegemony), but it seems apt:
I obviously did not say Keynes had little influence. I did say the bastardised version of his analysis cheapened it
Strange thing to say when Economics is increasingly moving out of social science departments into business schools.
I'm not just talking about Joe Bloggs. The failure to refer to these journals includes specialists. The policy implications of analysis have increasingly been kicked into touch by the pursuit of the technician
Teaching quants skills, often avoided by more mundane business studies programmes, is a different issue. Of course there is value for these skills. However, we might as well close down economics and just teach econometrics.
Nope! Political Economy is what Economics should be. Neoclassical economics has dominated too much, such that the political economy analysis has been wrongly sidelined to courses such as the history of economic thought. An analysis of phenomena will require a critical comparison of alternative schools of thought.
I have no problem with using theory to justify an empirical methodology. Data mining, despite your previous suggestions otherwise, should be avoided.
I merely recognise the costs of neoclassical economics. Whilst there will always be substantial roles for the applied econometrician and the mathematician, the school has minimised cross-fertilisation between the social sciences such that models are stagnant.
Keynes created a following, who created a school. The group became entirely intoxicated with proving the value of government rather than trying to find truth. That's why they might degrade models Keynes would support. They focus too much on the world-view they associate with that school of thought.
That's why thinkers matter. Isms, and schools should not.
Perhaps because it has an application to the real world? Why would business people (who work in the real world, where their decisions determine efficiency, profitability, and the success of a company) use such an irrelevant social science?
No, political economy is too limited. Schools of thought implies there is some unsure answer to most of the questions economics poses. It's important to teach different perspectives, but research should be driven solely by empirics, and not by preconceived notions of how the world works (or at least this influence should be severely limited). Marxism is almost entirely irrelevant. The supposed policy implications of his ideas have led to a great deal of suffering more than they have helped anyone (other than to inspire haughty academics). The problem with comparing other schools is that they often decide to avoid any real models, which makes it much harder to actually test them.
There is plenty of integration with other fields. More political science programs are becoming quantitative (like economics). There is the Department of Culture and Economics at Cornell. There are very few areas where economics is not applied. If anything economics is now being used in more areas than ever before. (Not to mention it's connection to real sciences like neuro-science).
I’m afraid that is an inaccurate viewpoint. Keynesianism, as a school, remains a vibrant part of our understanding of capitalism. The Neo-Keynesianism bobbins was of course weak, but it was an invention by the orthodox and a means to avoid the repercussions of Keynes’ ideas for our understanding of economic relations
The attempt to use the Phillips Curve to attack Keynesianism is nonsense. The curve was merely a historical empirical relationship that, using the bastardised version of Keynesianism, was used to limit macroeconomic thought to an orthodox position. We then got a barrage of more orthodox analysis explaining why the previous orthodox position failed. Theory such as the vertical Phillips Curve is nothing more than these fellows chasing their tales.
Actually it makes them more important. To understand Keynes you would have to also appreciate the limitation of neo-Keynesianism.
That is inaccurate. The economic approach rarely drops the assumption of rational economic man. From human capital investment to the suicide bomber, the economist maintains the assumption of rationality. Only lip service is paid to imperfections, with some limited reference to bounded rationality where it isn’t crucial for the modelling (e.g. where conclusions are maintained, replacement of maximisation with satisficing). Economic psychology, where it is realised that this approach is unrealistic, is only a minor element of economic output. Once we move towards irrationality, the majority of economic models become worthless and we are forced to rely on the social sciencies.
Thinkers ensure schools. It is naïve to think that economists are all thinkers. The majority tinker with analysis within schools. Our task has to involve assessment of the relevance of those schools for the issues we are studying. Take labour economics and the analysis of labour demand. The neoclassical approach will of course refer to the MRPL. Analysis is, however, changed once we move to the other schools. The institutionalist will reject the notion of external market forces and focus on discretionary behaviour, leading the analysis towards issues of economic power and the consequences of management X-inefficiency. The Marxist may instead concentrate on issues of job hierarchy, referring to how technical inefficiency will occur if it is consistent with ‘divide and rule’ profit maximisation. The post-Keynesians will argue that employment and real wages are not determined simultaneously, with employed governed by market prices and wages by degree of monopoly power. Given labour demand is crucial for a vast array of economic issues, we become dependent on the school of thought as a building block.
I’ve never been asked to draw a marginal cost curve in my life! Economics teaches valuable skills. The content is often irrelevant.
They’re profit seekers. They’re after productive workers. They’re not interested in how capitalism works and therefore it does not matter if the more foolish neoclassical models have been taught.
The exaggerated importance of technical analysis, to the detriment of content, has ensured the vast majority of the articles are of use only to other technicians motivated by publishing further technical offerings.
Political economy is about appreciating the variation of economics. It celebrates diversity!
As already mentioned, a reliance only on empirics will ensure data mining. The discipline becomes increasingly reliant on game playing, where assumptions and predictions become confused
In terms of economic schools, that is clearly bogus. We even have to consider the orthodox economist and how he/she is forced to rely on radical analysis, given the failure of simple technical relationships to understand economic result. The classic example is efficiency wage theory.
The general approach is to find new roles for neoclassical analysis, rather than using social sciences to appreciate the weaknesses of the modelling techniques adopted.