Wednesday, November 25, 2009

Time Travel to the Heady 1960s

I attended a meeting addressed by Robert Skidelski last evening (6.00pm - 7.15pm – left before last questions). He is a very clear speaker and fluent in Keynes and ‘Keynesian’ macro-economics – so much so it was like sitting in a graduate economics class in the late-60s.

His analysis of the current crisis focussed on “uncertainties in modern economies” and the fallacies of rational expectation and market efficiency theory (the latter which he asserted was the followed by “all” economists). His ascription to “all” was challenged by Professor David Simpson in the early question session, to which Professor Skidelksi responded that those few economists who disagreed with it were from minor universities, had undistinguished publication records, mainly in “uncited” and "non-peer reviewed” journals (an impolite caricature that certainly did not fit Professor Simpson – Harvard, etc.).

I enjoyed much of Skidelski’s talk on regulation (what, and by whom, though?), which when he went, under questioning from various economists in the large audience, onto Bancor, for narrower and managed exchange rate stabilities, and various old-familiar “remedies” to currency depreciations, speculation and other problems of the 50s-70s, plus "fiscal policies",suggested that Skidelski had not moved on to 2009.

He did not mention Adam Smith, who was not an equilibrium economist, nor stuck with the imaginary ‘Homo economicus’ and a laissez-faire economy of the late 19th century that led to the mathematisation of what essentially cannot be treated that way – economic behaviour is peopled by, er, people. They do not behave as well-behaved functions.

Keynes knew this too (“An End to Laissez—Faire”); apparently, Skidelski conflates modern economics with praise-worthy, but as yet unearned, credentials, while enjoying his re-born role as the authoritative voice of Keynes.

I came away disappointed, as did my economist wife; both of us children of 1960s economic degrees.

It was back to filling of boxes for our house move (see recent Announcements).

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