Old and new

Originally posted by Eladar
I think his answer is that it depends if the new idea is any good or not. New does not mean good. If the new idea is good and better than the old, then of course the old idea is going to hold you back. If the new idea is bad, then the old idea will keep you from screwing up.

*sigh*

Who said new is always good? Or that new bad is better than old?

I'll give you an example. You hear a lot of people mentioning Keynesians/Monetarists/Austrians in the economic debates. These people are discussing in a fantasy world where we haven't learned anything about the economy since those days. Well, obviously some people haven't.

You believe in simple ideologies and maxims, so everything is structured around a few rigid ideas. Change in that setup requires some sort of scorched earth politics. From Capitalist to Marxists or some such ideological nonsense. I don't. I'm a pragmatist, I think we can continually learn and adapt. You don't, you believe in changing as little as possible lest it all fall down like a house of cards. Fear of change and adaptation is a recipe for stagnation and the creeping of established interests. This happened in both the US and the Soviet Union.

Originally posted by Palynka
*sigh*

Who said new is always good? Or that new bad is better than old?

I'll give you an example. You hear a lot of people mentioning Keynesians/Monetarists/Austrians in the economic debates. These people are discussing in a fantasy world where we haven't learned anything about the economy since those days. Well, obviously some people haven't.

You ...[text shortened]... the creeping of established interests. This happened in both the US and the Soviet Union.

I hope you saw my edit.

It was the opening statement that says that implies new is always good and that the problem lies in the old.

If you think that the US held on to pure Capitalism you have no clue. If the US held on to pure Capitalism, then how do you explain Social Security and other social safety nets?

The economic problems that the US face are due to these programs. Any country with large number of people out of work can't support these programs. It is why countries like Greece and Spain are going under even though they are neither the US nor Russia.

Socialism sounds good, but in the end all it does is make matters worse.

I'm not saying that we should have no regulations on companies, but the government shouldn't be in the redistribution of wealth business.

You may find working models in some European countries, but those countries also relied heavily on the US for military muscle during the Cold War.

Originally posted by Palynka
Wow, thanks for the obvious. Are you being deliberately thick? The question is whether the risk of the new or the anchor of the established is the bigger issue.

I'm not deliberately thick, but I do think you are deliberately ignoring reality.

How many ideas in history are actually new? If I apply an idea that was used before in a different sitaution to a new situation is that a new or an old idea? If I think adopting something that was tried in in a different context, am I anchored to an old idea or am I risking a new idea? If I want to modify a plan, is that a new idea or an anchoring of the old?

I'd argue the whole new and old concept really means absolutely nothing at all in an idea context. Decision should be made by balancing their attributes.

Originally posted by Palynka
I wonder if someone will say something interesting in this thread.

Well, it seems ironic that the old ideas we need an escape from are those of J.M. Keynes himself. I thought that's where you were going with this thread but that's sure not the way it unfolded. 🙂

Originally posted by Palynka
I wonder if someone will say something interesting in this thread.

I kind of assumed that a quote that obviously means nothing outside whatever the reader chooses to ascribe to it would not spawn anything interesting.

Originally posted by Sleepyguy
Well, it seems ironic that the old ideas we need an escape from are those of J.M. Keynes himself. I thought that's where you were going with this thread but that's sure not the way it unfolded. 🙂

No cows are sacred with me. 🙂

Originally posted by Teinosuke
"The difficulty lies not in the new ideas, but in escaping from the old ones."
J.M. Keynes

Was Keynes, on balance, right to make this claim?

Didn't know Keynes was a Buddhist:

There's a Zen story in which a professor visited a Japanese master to inquire about Zen. The master served tea. When the visitor's cup was full, the master kept pouring. Tea spilled out of the cup and over the table.

"The cup is full!" said the professor. "No more will go in!"

"Like this cup," said the master, "You are full of your own opinions and speculations. How can I show you Zen unless you first empty your cup?"

http://buddhism.about.com/od/basicbuddhistteachings/a/philosophy.htm

Originally posted by Eladar
There's still the question of what we empty and what we replace it with. As we've found out in the US, change isn't always good.

Change is inevitable. Whether you want to keep trying to fit square pegs into a now round hole is up to you.

Originally posted by Palynka
Change is inevitable. Whether you want to keep trying to fit square pegs into a now round hole is up to you.

Sure it is. Sometimes it is to become more conservative and sometimes more liberal.

Originally posted by Eladar
Sure it is. Sometimes it is to become more conservative and sometimes more liberal.

Only two options, both established parties with vested interests. They've formatted you well.

Originally posted by Eladar
They aren't parties in the US, so I didn't intend to say parties. What I meant was that things move both ways, sometimes to the left and sometimes to the right.

Always sideways, never forward?

Joke aside, rejecting that every direction is towards some sort of ideological endpoints is part of what I'm trying to get at. Some have to be, but often these endpoints become too strong as references for political discourse and as such obfuscate the pragmatism I was mentioning earlier.

Originally posted by Palynka
*sigh*

Who said new is always good? Or that new bad is better than old?

I'll give you an example. You hear a lot of people mentioning Keynesians/Monetarists/Austrians in the economic debates. These people are discussing in a fantasy world where we haven't learned anything about the economy since those days. Well, obviously some people haven't.

You the creeping of established interests. This happened in both the US and the Soviet Union.

Reminds me a bit of our conversation about Post-Keynesians versus—hmmm, even the labels are dated—let’s say updated 21st century Synthesized Neoclassicals? The PKs tend to think the Keynesian/Neoclassical Synthesis stopped about, what?, 30 years ago? While the SNs think that PKs are willfully incapable of doing relevant empirical work (which the Austrians are, by declaration of principles).

One of the reasons I liked Roubini’s book on the crash was his deliberate willingness to draw on multiple schools of thought. (I just started Minsky’s book, and also have one on PK empiricism).

A professor of mine once said that there are basically two kinds of students of any discipline like economics: those who accept the foundational principles of the reigning paradigm, and move on to new applications and positive developments within that paradigm; and those who want to poke at the foundations to see if there are anomaly’s at the foundation that matter. I did tend to be the latter sort—but the “Post-Keynesian Institutionalism” of my day, following on Coase (“The Nature of the Firm”, 1937?) and Stigler, led to a whole stream within what remained the NS (e.g., Michael Spence and O.E. Williamson?). I believe that both sorts are important—even if they rub each other a bit raw at times.

So things do tend to unfold slowly—or at least paradigmatic adjustments tend to happen slowly, whether a whole new paradigm is called for or not. [I haven’t read it in a long, long time, but I suspect Coase (1937) is still a relevant starting place to point an “efficient market fundamentalist” to.]

Which brings me ‘round to Keynes again. I find that some people who reject Keynes never read the GT at all, and reject not what Keynes said, but what he is said to have said. (Aside from the argument between PKs (such as Davidson and Skidelsky) and “New Keynesians” such as (Samuelson, albeit posthumously, and Krugman) as to who the “Real Keynesians™” are.) And to reject—or to move beyond—some of Keynes is not necessarily to reject the whole thing. I am still not sure that some version of adaptive expectations is not better than at least some rigorous versions of RE; nor am I convinced that high rigor is always a pragmatic improvement on less rigorously formulable heuristic guides.

In the end, I agree with your “Yes”. But with the caveat that knowledge of the discipline’s history is always relevant. Some of what falls with the collapse of an old paradigm (e.g., Classical economics) may become important vis-à-vis a new paradigm much later—e.g., Sraffa’s contributions.* In spite of the power of marginalism. Etc. etc. 🙂

_______________________________________________________

* And I still suspect that the Italo-Cantibridgians were right about the Cambridge Capital Controversy—which does not stand or fall on Sraffian reswitching—admitted by Samuelson, insistently ignored by Solow. How does one test the r = MRP(k) condition, when r is what is used to measure heterogeneous k [e.g., K = rk]? (My thesis dealt with transaction costs and internal labor markets in the face of heterogeneous labor, and suggested that the w = MRP(L) condition actually became, under some institutional arrangements, a double summation across jobs and time. I did not think that even heterogeneous L had to be computed using w; I’m not sure if that can be the case with K that is not “buttery”, to use Joan Robinson’s term. I think that alternative models (along the lines of input-output analysis?—does anything remain of Leontieff’s efforts?—showing my age and lack of “upkeep” again?) might be needed. But, then, I do recall a paper that you provided that demonstrated how heterogeneity issues could be econometrically dealt with in a way that was not practically possible in my day--if I recall rightly. In such cases, I think that sometimes theory follows practicality, rather than the other way around--what is practically impossible is often taught as being theoretically irrelevant at best?