Tuesday, September 27, 2011

E&C Return #2: Eagle Concludes Conventional Economics Is Not All It’s Cracked Up To Be

John Kenneth Galbraith, Canadian-American econ...

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Eagle had always had a good brain, but had mainly confined himself to aviation during during his early years as symbol of the United States of America, and leader of all eagles in the country.

He was actually an exceptional aviator with a deep knowledge of the academic disciplines that a combat flyer needed to be acquainted with, but he hadn’t progressed much in other fields until Cuckoo challenged him. Then he had applied himself with vigor and had made remarkable progress, particularly in economics. His version was called ‘Eagleomics.’

Initially, the name change had struck Cuckoo as little more than a demonstration of Eagle’s sense of humor, but over time he had begun to realize that Eagle had intended meant much more than that. In fact, what he was really doing was evolving a whole new discipline which incorporated the best of economics but which actually worked. And slowly but surely, he was getting there. Or Cuckoo thought he was.

“You know, a lot of sound thinking has gone into economics,” said Eagle, “but the bottom line is that economics, as currently practiced, doesn’t work. If it did, we wouldn’t be in the economic mess we’re in now.”

“Fair point,” said Cuckoo.

“And yet, almost no one in the profession is really questioning the fundamentals of economics apart from a few notable exceptions like Stiglitz, Krugman and Ha-Joon Chang,” said Eagle.

Cuckoo made a mental note to ask about Ha-Joon Chang. “Why do you think that is?” he said.

Eagle chuckled. “JK Galbraith put it as well as anyone could,” he said. “Let me quote: ‘In any great organization, it is far, far safer to be wrong with the majority than to be right alone.”




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