Reviving Economics - Call to Arms

David Brooks (IMOP correctly) states that the state of (mainstream) economics is at a crossroads, and simply cannot continue along its current path without some major upheaval in thought and methodology.

Mainstream economist and textbook author Greg Mankiw disagrees (of course), and absurdly implies that mainstream economists were, for years before the crisis, paying attention wholeheartedly to financial structural problems. I'm sure there were a handful of mainstream economists dipping their toes in the water, but I know of no mainstream economist who put forth any real ideas - all the real ideas were coming from heterodox schools (for DECADES)which mainstream economics not so subtly abhorred and continues (amazingly) to shun (because its gains mean the very revolution David Brooks talks about). And I find it laughable that he invoke behavioral economics as if there is the great hand-holding relationship between behavioral economists and the mainstream. It's true that behavioral economics is gaining (and has received) some acceptance at the micro level - but there is still the undercurrent within the mainstream that behavioral econ is just a nice "add on" to mainstream models - which defeats the point.

There's a reason that the vast majority of economists and academics that predicted the impending doom were from heterodox fields - it's because textbook economics - arguably led and embodied by Greg Mankiw - is, by itself, a failure. I acknowledge the usefulness of much of what can be found in such textbooks - I still use a mainstream text to teach - but the old textbooks do need to be thrown away (or at least heavily supplemented). I threw away Mankiw's two years ago because there are other authors that aren't so dismissive of the need for the field to change.

David Brooks is spot on when he says:
"The moral and social yearnings of fully realized human beings are not reducible to universal laws and cannot be studied like physics."

And I'll let people in on a secret - students agree. I teach a mix of mainstream and heterodox concepts from a pluralist perspective - and I'm seeing the light bulbs go on in students' minds - the next generation, whether people like Mankiw like it or not, will change the field. Mankiw will have a legacy of supporting the stagnation of economics - via his short-sighted best-selling economics textbooks. But I for one will be proud that, albeit in a very small way, I supported the dialog of change that will help revive economics.