Monday, December 24, 2012

Economics As A State Of Mind


Adam Davidson reviews the performance of the British economy since the onset of the great recession in the Times Magazine this week, along with the arguments for and against the policies of the Cameron government to date. From this half of the BPS, it's not an encouraging story. Yet the folks running show over there seem to think they're doing just fine.

The longer we continue our conversation, the more I become convinced that the two current competing economic schools (let's call them Keynes and Hayek and their descendants (the likes of Krugman and Mulligan), aren't really arguing about economics. They are arguing for their vision of who we are, or who we might become. When you write about responding to incentives, what is implicit in your argument is a belief in the character, mind set, psychology of those who are responding. But lots of people clearly don't respond in the way you describe, or see the world through your eyes. The same of course, is true for me.

The problem for each side is that is in different times and  certain circumstances, both are likely to be right, or wrong, as the case may be. The larger problem, IMO, is that neither side is even remotely interested in listening to or learning from the other.

Maybe they should read the BPS.

Happy Holiday


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