. . . Husbands and wives are, of course, engaged in a never-ending set of exchanges of information, negotiations, and compromises over issues that could never have been anticipated in advance. A good marriage is characterized by a process of constant give and take, and constant adaptation to ever-changing circumstances, always leavened by good will. Similarly, to get better economic policy, economists and political types must be joined together in a lasting union—not in a series of one-night stands. They must interact regularly, with each understanding the other’s comparative advantage. To be sure, these will be arranged marriages founded on convenience, not romances based on love. But if we can increase the frequency and durability of such marriages, and limit divorces, George Stigler will have been proven wrong and Don Patinkin will have been proven right.
That is Alan Blinder: "Economic Advice and Political Decisions: A Clash of Civilizations?,” The Patinkin Lecture, Israel Economic Association, May 2005, forthcoming in The Economic Quarterly. You can download it here -- it is the fourth of the forthcoming items.
Abstract: Like other sciences, economics shows long periods of gradual refinement of theory and the steady accretion of empirical evidence, punctuated by the occasional sea change in world views. Thus the history of economic thought and practice reveals distinctive eras characterized by differences in what was considered conventional wisdom by informed lay persons and policy practitioners, differences in institutional frameworks, and differences in the preoccupations of the leading theoreticians. An example of such a change came in the pivotal decade of the 1970s from the Bretton Woods era package of Keynesian demand management, fiscal policy pre- eminence, fixed exchange rates, and New Deal welfare economics to the neoliberal combination of supply-side public policy, monetary policy pre-eminence, floating exchange rates and an emphasis on market disciplines and incentives that has dominated since. This paper argues that a similar confluence of pressures, contradictions and policy impotence that accompanied the paradigm shift of the 1970s is in evidence today and argues for a fundamental re-appraisal of what is presently considered conventional wisdom—i.e., of what we “know” about economics today.
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