A Wealth of Ideas

Competitive history suggest that only the best and most viable economic ideas should become dominant in practice and taught, whereas a cumulative view suggests that we must consider all currently existing theories and studies in order to take a holistic view of economics. In this it is important to establish the subjective nature of economics; we are ultimately privy to pluralism within the subject as there is not always necessarily a right or wrong.

The competitive argument states that unviable concepts be discarded, but what are the criteria for success. We are not entirely sure that our current mainstream economics currently work as they should; the financial crisis is testament to that. Growth figures aside, the term recovery is used too loosely, and we were never too sure how to go about recovery in the first place, should it have been austerity or fiscal expansion?

In this the cumulative view may appear to be stronger, with the inclusion of unorthodox theories, and a greater willingness to compare policy and approaches we may be more able to approach economics as it is: a subjective subject. Through the use of empiricism and statistics we can introduce a mixed approach of both competitive and cumulative, as our understanding changes over time, on the basis of differing economic conditions. Thus a combined view can consider the unorthodox approach while still maintaining a source of strong evidence for it. We have a tendency to flock to mainstream economics as a given way of achieving our economic aims of growth and development. However, if we already appreciate that each nation has different economic conditions, than how can we allow there to be a mainstream approach?

This was already highlighted in the 1990s and early 2000s through the currency liberalisation and lack of debt relief for Sub-Saharan economies, which was being preached by the IMF through the backing of “mainstream” economics. Their disregard for a more personal approach towards the individual economies shows how there is a need for cumulative economic thought; we have a wealth of ideas, all of which have some kind of importance in our approach to the subject and its wider implications.   Moreover, if we can appreciate the existence of a business cycle or any variety of cycle, then we should be far more flexible with the economic policies we pursue such that if the conditions of the economy change so should the policy. Obviously, we are limited by the factor of time, as our response can be too late or too early. However, a response would be sufficient in the first place. The willingness to consider heterodox economics moved use on from mercantilism, I believe that it is once again time to apply it to actual policy rather than leave it in books of theory.

 

I have begun reading a new book: The Wealth of Ideas: A History of Economic Thought
It is not exactly a light read, but some very interesting ideas and concepts all economics related of course.