Simon Wren-Lewis, Mainstream Macro and 'Evolution not Revolution'

     He argues that the heterodox econ guys to summarily reject 'everything' in the mainstream and suggests this might be that young people find revolution more exciting than evolution. 

       "Take, for example, a recent post from Lars P Syll which caught my attention for obvious reasons.[1] He writes: “People like Hyman Minsky, Michal Kalecki, Sidney Weintraub, Johan Åkerman, Gunnar Myrdal, Paul Davidson, Fred Lee, Axel Leijonhufvud, Steve Keen – and yours truly - do not share any theory or models with Real Business Cycle theorists or “New Keynesians”". Any theory? Is everything in what has been called the new neoclassical synthesis a waste of time?"

               

      "I think this is a bit of an exaggeration. To pick just one example I read recently, Steve Keen in his Minsky model forthcoming in JEBO uses a Phillips curve, which I would say was the defining relationship in New Keynesian theory. His and the New Keynes Phillips Curve are not identical, and of course Keen’s is not microfounded, and they do somewhat different jobs, but still there seems to be some overlap between mainstream and heterodox there. This is hardly surprising. The Phillips curve started life as an empirical discovery. It is neither the invention of New Classical or New Keynesian thought, nor the fruit of heterodox ideas, and so can quite happily be shared."

               

      "What interests me is why the need for such wholesale rejection of the mainstream? I learnt one possible answer when young, which is the appeal of revolution rather than evolution. In Cambridge (UK) in the early 1970s, a significant group of the faculty called themselves Neo-Ricardians, and they too rejected neo-classical theory. Joan Robinson was an inspirational figure for this group, although the key influence was Piero Sraffa. They were strongly attracted to the ideas of the philosopher Thomas Kuhn, who talked about paradigm shifts in science. The mainstream was not going to evolve into something better: it was fundamentally flawed, and therefore had to be overthrown. Attractive stuff for undergraduates – too attractive in my case – but that particular paradigm shift never came."

              

       "A rejectionist strategy is of course unlikely to win friends within the mainstream. Even those quite critical of aspects of mainstream thought and teaching can be exasperated by the rejectionist attitude.  My own view is very similar to that expressed by Diane Coyle in her review of Steve Keen’s ‘Debunking Economics: The Naked Emperor Dethroned’: “I have a lot of sympathy with the details of Professor Keen’s project, but not its ultimate ambition. For in the end I think the Naked Emperor needs to be reclothed rather than dethroned.”

     http://mainlymacro.blogspot.co.uk/2012/07/heterodox-and-mainstream-macroeconomics.html

     A few thoughts. Whether or not we need 'revoluton or evolution' isn't always clear. Sometimes only time will tell. Unlearning Econ left a comment in this post-written back in the Summer of 2012:

     "I am not wedded to all of Keen’s criticisms of economic theory – he may well have taken some wrong turns. However, I don’t think they are necessary to dismantle neoclassical economics. Your ‘don’t throw the baby out with the bathwater’ attitude is fairly common, but I feel that neoclassical economics is flawed from the ground up. This essay identifies exactly what that ‘ground’ is, though offers only limited critique:

     http://www.paecon.net/PAEReview/issue38/ArnspergerVaroufakis38.htm

     Note: unfortunatley UL's link seems not to work. However, UL did say this in a recent post of his own:

    "T his is just a quick post to let people know that I am not ending the blog. However, readers might have noticed posting has slowed down a bit recently (4 and 3 posts in September and October respectively, versus 6 and 7 in July and August), and this is essentially just because I feel like I have less to say. The reason I started this blog was to get some sort of critical debate over the state of economics and learn (or unlearn, groan) about economics as a field – in other words, the kind of thing that you simply do not find on an economics degree. The blogosphere has definitely delivered in this area, but since I’ve now gotten what I set out to get, I feel I should focus more on other things."

     "I still have the same basic opinion as when I started the blog: neoclassical/mainstream economics (which exists, no matter what economists say!) is questionable in terms of relevance, coherence and methodology, and is not the only or best way to do ‘economics’, which itself cannot be thought of as an isolated, separate sphere. My opinions on some things have changed: I think some areas of neoclassical theory – as well as econometrics – are worthwhile, and that heterodox economists get some things wrong (the chief one being repeating the same criticisms over and over). My opinion is now less “neoclassical economics is nonsense!1!!” and more “the research program has reached its limitations and needs to be replaced and/or confined to specific spheres”.

     "However, I am also more optimistic about the discipline changing than I used to be. Real life discussions about the state of economics simply don’t have the same air of hostility as those on the internet – in my experience it’s not difficult to find mainstream economists who will tell you macroeconomics, undergraduate economics and ‘free market’ economics, as well as other areas, are generally garbage. The difficulty lies in trying to get them to think in any other way than the ‘individual agent faced with choices’, but su\ch alternative theories are being developed, and as awareness of them increases, economists will hopefully be able to see things in other ways."

     http://unlearningeconomics.wordpress.com/2013/11/07/not-ending-the-blog/

     So is he more optimistic now that it can reform itself from the inside out? As to the idea of Kuhn and scientific revolutions, sometimes they are necessary. There was in the case of Copernicus and Galileo no way to simply split the difference with those who held to the Ptolemaic view of the Universe. 

     This seems to be the way a lot of certainly the MMTers see things. Yet is WL is arguing that real changes in economics only happens via evolution that's quite wrong-Keynes gave us the ultimate paradigm shift where things changed overnight. It's true that this time may be different-it's hard to imagine one book changing the entire world as it did in 1936. It may well be that we end up seeing important changes in an evolutionary way. 

     Yet I still can't feel that the divide between Neoclassical econ and it's critics is something of a zero sum game. At the end of the day you're either  Keynesian or a pre Keynesian and if you believe in NC that' means you believe in Say's Law that investment is fixed and so savings decides output and then we're stuck in the wold of today where policymakers have certainly acted as if they believe Say's Law. In this sense, what we have is a debate still as we've had since Keynes-it's Keynesian vs. pre Keynesian econ whereby we've had a 35 year counterrevolution. 

     P.S. To the extent that UL is optimistic it seems to be that he has access to what many of us bloggers don't.