In Greek mythology Sisyphus had an affair with the wife of a God. His punishment doomed him to roll a rock up a hill until he got close to the top. The rock would then roll down the hill and he would have to start all over again with a task that could never be completed. Paul Krugman feels like Sisyphus. He is forced to keep destroying zombie ideas that never die. He wishes that he could spend his time developing new ideas, but the zombie ideas won't go away.
I have been reading some books on economic history. It is full of zombie ideas that have been kept alive by diligent economists. In 19th century England there was no such as involuntary unemployment. People were unemployed because they refused to work for the wages that were determined by the labor market. Moreover, many were provided with relief that made them less likely to look for jobs. They also believed that the market was self correcting. If the market did not correct, it was because the market was not allowed to operate as it was intended to operate by nature. Government, unions, and monopolists all conspired to prevent the market from performing its self correcting duty. Governments were also supposed to run a balanced budget. Bad things would happen if governments used debt to finance their activities. I found very few economic ideas in 19th century England that are not commonly held today. They were much better in physical sciences. They provided much of the foundation for modern science. Unfortunately, they also provided the foundation for numerous zombie ideas in economics.
No comments:
Post a Comment