How The Federal Reserve Bought The Economics Profession
Great read. Obviously, it is easy to compromise journals, academics and intellectuals, if you simply become their largest employer, and you can afford to do that, because you have monopoly power in the market and an army with big guns to back you up.
Nice to see this on the Huffpo where the commenters are generally ecognorant leftists.
Could probably use some Diggs, Stumbles, Reddit votes and mention on blogs.
The "stifled nature of the debate" in the whole of the positivists realm, whether economics or other fields of science, sucks out the very nature of spontaneous thinking. I thought this was very interesting:
'"Even the late Milton Friedman, whose monetary economic theories heavily influenced Greenspan, was concerned about the stifled nature of the debate. Friedman, in a 1993 letter to Auerbach that the author quotes in his book, argued that the Fed practice was harming objectivity: "I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results," Friedman wrote.
Greenspan told Congress in October 2008 that he was in a state of "shocked disbelief" and that the "whole intellectual edifice" had "collapsed." House Committee on Oversight and Government Reform Chairman Henry Waxman (D-Calif.) followed up: "In other words, you found that your view of the world, your ideology, was not right, it was not working."
"Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."
But, if the intellectual edifice has collapsed, the intellectual infrastructure remains in place. The same economists who provided Greenspan his "very considerable evidence" are still running the journals and still analyzing the world using the same models that were incapable of seeing the credit boom and the coming collapse."'
As Jeff Tucker noted, he more than strangely omitted Larry White's paper.
scineram: As Jeff Tucker noted, he more than strangely omitted Larry White's paper.
Link?
http://blog.mises.org/archives/010630.asp