Calls for new capitalism, new economics, new something
I am not sure what to call this category of articles, though I tend to agree with them and have my own series of postings coming up along similar lines:
- Amartya Sen has called for "capitalism beyond the crisis" (via Economist's View) which means a better understanding of economic psychology (he likes Pigou in particular)
- Willem Buiter objects to "the unfortunate uselessness of much 'state of the art' academic monetary economics" and would like to see practising economists use behavioural theory and complexity theory
- Colander, Follmer, Haas, Goldberg, Juselius, Kirman and Lux (whew) lament "the financial crisis and the systemic failure of academic economics" and would like to see economics that reflects the real world better, and is more oriented towards genuine practical concerns instead of navel-gazing
- Robert Shiller's new book says that "Animal Spirits" need to be revived to end the recession
- Dani Rodrik proposes "Capitalism 3.0" which is about a different approach to globalisation and global governance
- Anatole Kaletsky wants "a revolution in economic thought" which incorporates imperfect knowledge, bounded rationality and complexity
There is a hunger for something new. This is quite a different impulse from the other dominant category of economic proposals: how to fix the current problem.
In the spirit of Greg Mankiw's "Pigou Club" I'll collect similar proposals here and post them with the tag 'new economics'. Of course any field always has someone who wants to promote "the new paradigm" because it's good for their career - but I have the feeling that both the desire and the opportunity at present are unusually strong. I am speaking in May about behavioural economics and whether this represents the new theory that people hunger for.
Perhaps a clear consensus will emerge on what this new economics will look like - I'll keep watching.