Sunday, August 29, 2010

Tyler Cowen Spots a Telling Quote

From a quote by Tyler Cowen (at Marginal Revolution Blog), of a book review of John Quiggin (of Crooked Timber Blog) (HERE) and author of: Zombie Economics: How Dead Ideas Still Walk Among Us (Princeton, NJ: Princeton University Press. The review (not the book!), ‘First Bank of the Living Dead’ was written by Dan Drezner at National Interest (HERE):

Quiggin thinks he’s only writing about the failure of free-market ideas, but he’s actually describing the intellectual life cycle of most ideas in political economy. All intellectual movements start with trenchant ways of understanding the world. As these ideas gain currency, they are used to explain more and more disparate phenomena, until the explanation starts to lose its predictive power. As time passes, the original ideas become obscured by ideology, caricature and ad hoc efforts to explain away emerging anomalies. Finally, enough contradictions build up to crash the paradigm, although current adherents often continue to advance the ideas in zombielike form. Quiggin demonstrates with great clarity how this happened to the Chicago school of economics. How he can think it won’t happen with whatever neo-Keynesian model emerges is truly puzzling.”

Comment
How true of big ideas associated with intellectual movements and how well what happened to Adam Smith’s legacy fairly quickly after he died in 1790.

In the early years of the 19th century the epigones stuck Adam Smith with an alleged commitment to laissez-faire and legislators and those who influenced them used Smith’s hostility to the depredations of mercantile governments, to hamper legislation that was directed at callous employers and their exploitation of children and females in their factories and pits, within an alleged general hostility to government intervention altogether. Wealth Of Nations did not support such an interpretation of Smith’s views on the proper role of government.

In the 20th century, modern economists advanced the view that big business and big government could rely on the invented myth of ‘Adam Smith’s’ invisible hand, without any regulation (what happened to Adam Smith on the role of the state to oversee the appropriate legal environment for markets to function?), which regulations, while not totally abolished, gave impetus (as in the 1820s) to policies and political narratives hostile to the scrutiny that Smith advocated whenever ‘merchants and manufacturers’, or their modern descendants advocated, anything at all in their favour?

As time passes, the original ideas become obscured by ideology, caricature and ad hoc efforts to explain away emerging anomalies.’ How true!

and:

Finally, enough contradictions build up to crash the paradigm, although current adherents often continue to advance the ideas in zombielike form.’ How true, too!

[All credit to Tyler Cowen (Marginal Revolution Blog) HERE.

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1 Comments:

Blogger El caballer que diu kek said...

Really nice through out all the quotes and associations with the IH and Adam's Smith's it-self, great blog, many posts still to read, all of them great. Really nice thoughs and references!

6:58 p.m.  

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