An interesting year for economics, with Nobel Prizes going to Ed Phelps and Muhammad Yunus. Both deserve it, but I think there was a missed opportunity to also honour Axel Leijonhufvud and Hernando de Soto. Firstly economics, and as Pete Boettke observes Leijonhufvud is now the final unacknowledged nail in the coffin of Keynes:
That way the full array of alternatives to traditional Keynesian macroeconomics would have been awarded—pre-Keynesian (Hayek), adaptive expectations and monetarism (Friedman), critique of functional finance (Buchanan), rational expectations and New Classical economics (Lucas), theory consistent expectations and the long run natural rate (Phelps), and the coordination Keynesianism and the Wicksellian connection (Leijonhufvud).
It's an extraordinary point: Phelps won the Nobel for moving economics backward, returning to pre-Keynesian "macro"economics. That may sound strong, but it's worth assessing the Keynesian ediface and questioning if the whole journey was worth it: at what point do modifications undermine the whole enterprise?
Secondly peace, and when done right - with insight and relevance - economics is the framework for peaceful cooperation. Yunus is a practitioner of microfinance, and it'd be nice to also recognise the theoritician behind "the richness of the poor" - de Soto. It's also important to recognise the limitations of microfinance, exemplified in the fieldwork of Stephen Daley - top-down command of bottom-up solutions is confused.
Recent Comments