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Launch Underway for Institute for New Economic Thinking
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I just ran into Kenneth Rogoff, former chief economist of the International Monetary Fund, in the run down but historic commons pub of Kings College at Cambridge University
Rogoff is over-the-top accomplished, but just one essay of his made me a fan -- written in 2004, Rogoff authored an oped titled "A Debtor's Empire" that laid out quite clearly that America's superpower credentials were being eroded by a lack of attention to dependencies it was building on other countries to finance its never-ending binge of cheap toys and expensive wars.
Rogoff is speaking in the first session of a star-studded conference opening here at Cambridge University today under the auspices of the new George Soros-initiated Institute for New Economic Thinking. The meeting will start at 10:00 am EST time; 3:00 UK time.
Here is the agenda for the three-day session.
Why Kings College. The reason is simple. It was here where John Maynard Keynes once conceptualized how to change the laws of economic gravity when the world needed it. The drivers behind the Institute for New Economic Thinking believe that the time for revision of economic thinking has again arrived.
Rob Johnson will head INET as its founding executive director. Johson is also Senior Fellow and Director of the Project on Global Finance at the Roosevelt Institute, was previously a managing director at Soros Fund Management where he managed a global currency, bond and equity portfolio specializing in emerging markets. He has also served on the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz and served in past years as Chief Economist of the US Senate Committee on the Budget.
Other speakers and participants at this meeting include Joseph Stiglitz, George Soros, Richard Koo, Perry Mehrling, Charles Dallara, Adair Turning, Robert Dugger, Simon Johnson, Dominique Strauss-Kahn, Gillian Tett among many others.
By special arrangement, the Washington Note will be posting a lot of video takes with speakers at this meeting -- as well as interviews with some of the principals.
-- Steve Clemons
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Reader Comments (3) - post a comment
It is indeed an incredible lineup. I don't know how you managed video privileges, but kudos for that. Now if only these will be saved somewhere, in case my record doesn't work.
I look forward to your reporting as you are able.
From the Institute website:
"The Institute’s objective is to expand the conversation to create an
open discussion...that spans a much wider spectrum of thinking
and incorporates the insights of other intellectual disciplines in
both the natural and social sciences."
I hope they succeed in this objective.
PWhy Can’t Monetarists and Keynesians
...learn from each other, as Krugman points out? They can only
learn from authorities. And monetarists and Keynesians have
different authorities. But then of course they both have the same
problem: if their authorities can only learn from authorities,
there is no way to acquire gaining new insights.
This explains another factor of economics. Almost every
week we read exciting reports about new discoveries in the
physical sciences. But there are no exciting new discoveries in
economic. Is that because economics isn’t important?
Economics is the cause of many of the world’s most
dangerous, most intractable political problems: the Balkans
Palestine, Venezuela, Haiti, the Congo. Are these problems less
important than the problems the physical sciences are solving?
If they aren’t less important, why aren’t we reading about
their solutions? Because the economists have an obstacle the
physical scientists don’t have: economics is not congenial to
problem solvers.
Understanding Problem Solvers
Human beings view the world through simplified models.
The models help us make connections that would be harder to
see without the modes. Our un solved problems are waiting for
better models. But it is a sad fact about human nature that our
models make it harder for us to see the others readily which this
problems unsolved problems are a reminder that we need better
models.
Not surprisingly, the people who solve our unsolved
problems tend to be people who take our existing models less
seriously—people who are skeptical about the existing models
who are curious about the complex reality behind their models—
people who are willing to risk rejecting models that are actually
true.
Problem with Academics
What is the problem with academic economists? Many of
them are bright, hardworking people. The problem is that they
are academics.
We all have the same problem with new ideas. Unlike old
ideas, which have stood the test of time, new ideas are untested.
We can’t afford to take them all seriously. On the other hand,
without new ideas, the world can’t progress.
In short, there are two ways for us to go wrong with new
ideas:
1) accept ideas that are actually false
2) reject ideas that are actually true.
In the course of his long education, the academic is presented
with time-tested old ideas. If he rejects ideas that his trader
accepts, they will think he is a dunce. So, in order to advance his
education, the academic leaves to avert the second type of error.
Academics play a very important role in society; without them,
we would have to rediscover Euclid, Newton, with each
succeeding generation.
The problem with the five types of error is that we can avoid
one entirely if we don’t mind incurring the other. If one type of
error is important to our career and the other isn’t, and our
choice tends to become, not merely habitual, but unconscious
and unexamined.
Physical scientists aren’t immune to the problem. Inevitably,
the lack of skepticism about their old ideas, their leap of
curiosity about the new, brought progress to a halt. But after
England created the Royal Society to encourage dialog between
the academics and the people who had the responsibility for
solving real world problems, the physical sciences started
moving again. One of the most important consequences was the
Industrial Revolution, which needed a set of new ideas.
The physical sciences have never forgotten the lesson of the
Royal Society. But the social sciences are too young to remember
it. This is why the two schools of economics can’t learn from
each other.
(role of politics)
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