INET Will Not be New
By Arnold Kling
A press release from the Institute for New Economic Thinking:
Led by INET’s Executive Director Dr. Robert Johnson, the outreach program has already reached six institutions of higher learning, and has included presentations and discussion from INET Advisory Board members and Nobel Laureates Joseph Stiglitz and George Akerlof, recent INET Grantee Professor Barry Eichengreen and colleagues Brad De Long and Cristina Romer from the University of California at Berkeley. The Institute’s Campus Outreach Program engages with students and their professors at select colleges and universities to address the role of new economic thinking in wake of global economic crisis.
These sound like old economic thinkers to me. They are all highly-entrenched academic economists, each of whom already is paid more per decade in salary than what I will consume in a lifetime. What will George Soros do next–donate money to Exxon to promote new thinking in oil drilling and donate money to General Motors to promote new thinking in automobile production?
Here is what one of the “new thinkers” has to say about the crisis in Ireland. Barry Eichengreen writes,
Finance is where European integration has gone furthest. Hence financial regulation is where the case for centralised authority and oversight is strongest. Alas, the member states haven’t really agreed to give over that authority to a single regulator, as opposed to a college of national regulators.
Ah, yes, centralized regulation always works. That is how the United States and the United Kingdom were able to avoid a financial crisis.
It is not “new thinking” to say that better regulation would have made for better outcomes. That is almost tautological. What would be new thinking would be to ask deeper questions about how regulation should be approached in a context of political conflicts and regulators’ imperfect knowledge.
Anyway, back to my main point. Giving money to people who already are near the top of the status pyramid in the academic community is not going to do much at the margin to effect change. I do not think that George Soros will get much bang for the buck giving his millions to Berkeley, just I do not think that a libertarian philanthropist would get much bang for the buck donating to Chicago.