“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.”
— John Maynard Keynes, The General Theory of Employment, Interest, and Money
The above passage is typically interpreted as a paean to the enduring relevance of economic ideas, and one cannot help but read it as conspicuously self-conscious: Keynes conceptualized his General Theory as a subversion of the postulates propounded by “classical” economists—Smith, Ricardo, and Mill, among others—and was an active participant in the salient economic policy debates of his time. But others read Keynes’ statement as a justification of “economic imperialism,” the tendency of economists—as Edward Lazear put it—“to invade intellectual territory that was previously deemed to be outside the discipline’s realm.”
So what is the proper role of economic analysis in the 21st century? In my opinion, economists are on firm footing when they advance falsifiable theories, disciplined by empirical evidence, regarding the allocation of scarce resources. This is not intended as an exhaustive description of the sundry tasks undertaken by contemporary economists, and it conveniently elides epistemological debates on the justification for such Popperian critical rationalism. But, for the dual purpose of advancing the state of knowledge and informing public discourse, I see no better alternative.
With this blog, I seek to proffer some of my musings on finance, economics, and political science, conscious of the desire for falsifiability, and modulated by two guiding principles: (i) never profess to have a monopoly on the truth, and (ii) always assume the most charitable views of those one disagrees with. I hope you find the following discussions valuable, and feel free to join me in the meaningful exchange of ideas!