The Clash Of Economic Ideas

This is a review of a book on the subject of economic ideas.  It might be interesting to many who see the clash of economic ideas in our current debates on how to deal with financial crises, global recession and globalization.  The book frames the clash of ideas as a debate between Keynesian's, represented by Paul Krugman who is a prominent and vocal New Keynesian, and those of Hayec and his followers. This sometimes warps into a battle between those who threaten and defend freedom.

The reviewer does not like the way that the clash of ideas is framed.  He does not believe that New Keynesian's accurately reflect the views of Keynes because they leave out the role of money, which was important to Keynes, in their interpretation.  He has his own critique of Keynes which focuses on other matters.

He has a similar distaste for Hayec and his followers who saw government as the potential enemy of freedom.  He is institutionalist who places  an emphasis on the development of democratic institutions and their potential to resolve the conflict between government and freedom.  He also believes that money matters, and that central bankers play an important role in the economy.  If there is a lot of money in the economy, somehow it needs to be managed.  The only question is how it is managed.

I found the review interesting and informative. Perhaps because I share the writer's view that New Keynesian's have primarily accepted the classical view of economics, with the addition of sticky prices that keep markets from clearing.  I also have a strong distaste for debates that are framed around freedom.  I generally avoid any discussions that emanate from those who base their positions on the maximization of freedom.  I like the phrase in one of the popular songs which suggests that "freedom is just another word for nothing left to lose".