Saturday, April 12, 2008

Madrick on the End of an Age

Jeff Madrick has a Huffington Post column titled, "The End of the Age of Milton Friedman".

Since this is short and popular, one could think up lots of caveats. I'll go first. "Crisis in the 1970s" does not explain why Friedman's ideas became popular. Economists had available another account of stagflation. Something else remains of Friedman's academic contributions other than "the overstated natural rate of unemployment philosophy". I think most working economists would still echo something of Friedman's views on methodology, despite their rejection by specialists in the field.

7 comments:

Gabriel said...

This is cookbook "The End of the Age of X". Just find a public intellectual or school of thought, identify main idea, etc. and then plug into the template. -- There's nothing substantial here, except references to people who'd disagree with Friedman on some topics. (Some who are underexposed.)

Minsky always gets fashionable around these financial markets "events", i.e. about 1.5-2% of the time. The halflife time for references to him is about 2 quarters or so, no?

I think it would be fair to say that economists did not have another account of stagflation that made sense to them. Friedman's account makes a lot of sense for people with micro training (especially at that time).

As for method, and philosophy in general, for every methodologist there exist a methodologist of equal size and opposite view. -- As the Austrians learned the hard way, a methodological challenge has no impact.

There's no point in taking method seriously and in no circumstances following it mechanically.

And finally, Friedman's work on consumption was innovative and got people thinking constructively about a lot of related topics.

Anonymous said...

Why is Gabriel such an ass?

YouNotSneaky! said...

Some brave words from an anonymous commentator, ey?

Anonymous said...

"I think it would be fair to say that economists did not have another account of stagflation that made sense to them. Friedman's account makes a lot of sense for people with micro training (especially at that time)."

If you are limited to the neo-classical school, I suppose. But other economists not limited to that ideology had other far superior explanations of the issue.

In terms of the post-Keynesian one, that raised too many awkward questions of class, power, inequality and a host of other (obvious) factors which neo-classical economics tends to ignore or downplay.

Like the awkward fact that Friedman's various justifications capitalism have been refuted after his own ideology was applied by the likes of Pinochet, Reagan and Thatcher. But, still, when you help make the rich richer you can be forgiven such self-contradiction...

Iain
An Anarchist FAQ

Gabriel said...

Anonymous,

It's because I'm frustrated by my own limitations. Also, because I get Big $$$ from Corporate America (oh, wait, it's Corporate Romania?).

Iain,

Beauty (and model/explanation superiority) is in the eye of the beer holder.

Looking for work on distribution in a mainstream setting?... Try Oded Galor.

Anonymous said...

There's no point in taking method seriously and in no circumstances following it mechanically.

My take is that economics is defined at least as strongly by methodology as by the domain of study, which accounts for its "imperialistic" tendencies.

Given that graduate training involves learning that set of methods, there is very little reason for discussing methodology.


-H.E.

Peter H said...

Whether or not PK (or other heterodox) explanations of staglation are superior to those of mainstream economics, it would be nice if the mainstream acknowledged the existence of alternative models.