Wednesday, May 20, 2009

The Economics of Crisis and the Crisis of Economics

am preparing to give two lectures the economics of crisis and crisis of economics during my trip to China. I only have the introduction so far. I would much appreciate any comments.

The Economics of Crisis and the Crisis of Economics
The reputation of economics rises and falls with the business cycle. In the late 19th century, when capitalism faced what was then called the Great Depression, the world held economists in very low regard. For example, Walter Bagehot, longtime editor of London's The Economist, wrote:

Political Economy is not altogether satisfactory. It lies rather dead in the public mind. Not only does it not excite, the same interest as formerly, but there is not exactly the same confidence in it. Younger men either do not study it, or do not feel that it comes home to them, and that it matches with their most living ideas. New sciences have come up in the last few years with new modes of investigation, and they want to know what is the relation of economic science, as their fathers held it, to these new thoughts and these new instruments. They ask, often hardly knowing it, will this 'science' as it claims to be, harmonise with what, we now know to be sciences, or bear to be tried as we now try. [Bagehot 1885, p. 4]

1 comment:

The Big Mook said...

The subject of Economics is a worthy of study for academics and for the common man.
But is it a science? Money and financial systems exist because people believe they exist.

If the entire human population of the world woke up tommorrow with no memory or belief in money, Economics would not exist. The same can not be said of sunlight or gravity. People would immediately have to acknowledge these elements exist.

Economics belongs to the theology department, not the science department