Archive for April 4th, 2009

For posting this paper (pdf) from Thomas Palley. I’ve only had the time to read the preface, written by Dimitri Papadimitriou, but the basic gist (which we’ve already argued here in various terms) is that the economics profession was complicit in the neoliberal policies that led to the crisis, and we need change. Now. I’ll quote the end of the preface, and get to the rest later (and I promise I’ll do some cleanup on the Harvey videos soon as well).

Palley outlines several major obstacles to changing both economics
and economic policy. Social democratic political parties are divided in terms of the merits of the neoliberal economic paradigm. Other obstacles include the dominance of neoliberal economics within the academic community and among policymakers, which is supported by a misplaced belief that neoclassical economics is a scientific fact. This belief is used by the academic establishment to block alternative points of view.

New Keynesian economics is a form of real-business-cycle theory in
the tradition of Arthur C. Pigou rather than John Maynard Keynes, says Palley. Though mainstream economists are willing to recommend Keynesian policies in times of economic crisis, they are unwilling to change the core analytical assumptions driving modern neoclassical macroeconomics (an example of so-called “cuckoo” economics). The only satisfactory escape from this intellectual and political stew is the creation of a new, progressive Keynesian consensus. That will require placing economics at the center of the political stage.

I should read the paper before offering any thoughts, but the one thing that jumps out still is, have they heard of Marx? Has anyone? Still, I must say that the range of views being presented at Economist’s View gets a gold star (not quite a red star, though).

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