"...the functioning of even the best institutions will always depend, to a considerable degree, on its personnel... Democracy provides the institutional framework for the reform of political institutions (other than the framework). It makes possible the reform of institutions without using violence, and thereby the use of reason in the designing of new institutions and the adjusting of old ones..." -- Karl Popper (1945). The Open Society and Its Enemies, V. I, p. 110-111.People who make a career advocating some set of ideas often find it difficult to change their minds, even when events demonstrate that consequences of those ideas are mistaken. In a democracy, various parties contend for power based on different ideas about what policies are preferable in the current situation. Turning one party out and installing another is a means to alter what ideas guide society, while allowing for the difficulties prominent advocates have in switching sides. (I think I take this idealization of the possibilities of democracy from Karl Popper. But I could not find a more appropriate quote than the above offhand.)
I take it that the global financial crisis demonstrates certain ideas about economics to be mistaken. Many seem to agree, including, notoriously, the Queen of England. I've recently read Murray Milgate noting such mistakes:
"These instances of the [International Monetary] Fund's responses to crises of various kinds reveal a seemingly unalterable instinct of Fund staff to do the nearly the exact opposite of what is required. Faced with crisis, the Fund blames the patient for the malaise and seeks solutions in terms of monetary and fiscal austerity. That the problem might reside in the nature (and regulatory framework) of international monetary and financial arrangements seems never to pass through the minds of the Fund's staff." -- John Eatwell and Murray Milgate (2012). The Fall and Rise of Keynesian Economics, Oxford University Press. Chapter 15, p. 322.Maybe a large turnover of personnel, as Dean Baker has called for, at such organizations as the IMF and the World Bank would be desirable. And maybe a movement for new international regulatory institutions should be gaining influence.
In academia, we should perhaps be seeing a change in the relative rankings of economics departments and journals. Maybe, say, Harvard should be thought less well of, and places like the New School, the University of Massachusetts at Amherst, and the University of Utah should be gaining prominence. If this were happening, one could see the signs in citation patterns, in what experts were being quoted in the press, and in trends in the hiring patterns for recent graduates from different economic departments.
I realize Karl Popper's views on how science and democracy work often seem not to be historically accurate descriptions of incidents universally considered progress. To me, though, they provide heuristics practitioners might adopt. Are we seeing the changes we perhaps should have expected in the last few years?