Joshua Brown's quote of the day is by Noah Smith, Bloomberg View:
By A lot of people see economics as a “conservative science” that makes up unrealistic theories in order to push a free-market agenda. I don’t know if that was ever true — maybe in the 1970s? — but if so, those days are long gone.
At the latest American Economic Association meeting — the big annual economist convention, which ended Monday — some people turned out to protest against what they claim is too much mathematical formalism in economics. In an act of supreme irony, their main target was Carmen Reinhart, a Harvard economist whose most famous work was a book about the history of financial crises — a famous example of modern econ that isn’t mathematical.
Why did the protesters go after Reinhart? Because she’s in favor of cutting government debt. What the protesters want has nothing to do with methodology — they want economics to lean more to the left.
But if the protesters bothered to look around, they would see that their wish has been coming true for decades. Over the past quarter-century, economics has been shifting from singing the praises of free markets. Instead, it has moved toward a greater focus on inequality, human welfare and the ways that markets break down.
It’s worth asking: Why has economics shifted to the left? Maybe it’s because the country itself, and its problems, have shifted. In the 1970s, when conservatism and Friedman became the face of economics, we faced high tax rates, heavy regulation, high inflation and powerful unions. But in 2015, we confront rising inequality, economic insecurity, and the aftermath of a financial crisis and a long, deep recession.
Maybe a country simply gets the economics it needs.
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Source: QOTD: Why Modern Economists Lean Left
Picture: Paul Krugman, NYTimes, Twitter.
