GOAT

• First, I wish to teach the reader some economics. But most didactic manuals in economics are boring, even for dedicated specialists.
• I wish to present economics as a vehicle for carrying ideas about the world. often is overlooked, In the 19th century, if you had a new idea you might have embedded it in an economics theory about the world. (Like twitter is today)
• I would rather entertain you, and present what I see as the truth, than be polite to my own side in the political sense of that term.
• Friedman receives a lot of criticism for being “too free market,” or for being “too neoliberal,” whatever that is supposed to mean
• Friedman has been the most influential macroeconomic thinker since John Maynard Keynes
• Friedman in essence predicted that stagflation – both inflation and high unemployment together – would be possible, and lo and behold that is exactly what the later 1970s delivered.
• 1968 presidential address to the American Economic Association. This presidential address raced from first principles to more complex conclusions, in a manner that perhaps no other economist could have pulled off. If you are looking for a paradigm example of how the simple and the complex can be blended in scientific reasoning, with brilliant rhetoric as well, this is one of the very best places to go. It is no wonder that it captivated the attention of a generation of economists.
• Keynes was a truly significant analyst of the Great Depression, whose advice resurfaces in virtually every recession or depression, he was part of the British World War II planning effort, and finally he was a major figure in the planning and construction and negotiation of Bretton Woods, the world’s post-World War Two monetary and financial order. A+ for historical import.
• Keynes understood fiscal policy in terms of digging ditches and filling them back in again, and he argued that even wasteful government spending could boost an economy, due to its positive impact on aggregate demand.
• my belief that the General Theory was one of the best written books of all time,
• Sometimes real-world problems do indeed overwhelm our methodological desires for clean, simple models. If you still want to stick with clean, simple models then…Keynes is not for you!
• It is common and entirely correct to regard Keynes as a macroeconomist. It is less commonly understood how much he was a macro-oriented macroeconomist, namely taking a macro point of view – analytically – on macroeconomics itself. And whether or not you think Keynes was the GOAT, along that particular dimension he was clearly GOAT.
• Yet good, or even competent, economists are the rarest of birds. An easy subject, at which very few excel! The paradox finds its explanation, perhaps, in that the master-economist must possess a rare combination of gifts. He must reach a high standard in several different directions and must combine talents not often found together. He must be mathematician, historian, statesman, philosopher – in some degree.
• one drawback to putting aesthetics at the very forefront of your social philosophy is that, if you see something you regard as unaesthetic, there is no higher principle to steer you toward tolerance.
• Keynes displayed an awesome array of talents, without being pre-eminent in any…Keynes was great in the combination of his gifts. His achievement was to align economics with changes taking place in ethics, in culture, in politics and in society – in a world, with the twentieth century spirit.” In this regard, as we will see, Keynes did for the twentieth century what John Stuart Mill did for the mid-nineteenth century.
• But Hayek is telling us that the economic problem is not one of optimization, but rather one of discovering the preferences and the constraints, and also learning about procedural rationality.
• Hayek is prominent as a critic of the view that the social sciences should mimic the methods of the natural sciences, and furthermore should aspire to a pretense of relatively certain knowledge about empirical matters.
• Mill, son of a dogmatic father, was himself eclectic and had an engaging ability to change his mind when new facts of arguments became available or merely from rethinking old attitudes. It is almost fatal to be flexible, eclectic, and prolific if you want your name to go down in the history books…
• For Malthus it could be said that the idea of equilibrium triumphs over that of progress.
• So one way to read Malthus is this: if a society is going to have any prosperity at all, the people in that society either will be morally quite bad, or they have to be morally very, very good, good enough to exercise that moral restraint. Alternatively, you can read Malthus as seeing two primary goals for people: food and sex. His accomplishment was to show that, taken collectively, those two goals could not easily be obtainable simultaneously in a satisfactory fashion
• The simplest version of Malthus is an account of how the world runs when all essential factors do not grow at the same rate, and in particular those growth rates diverge in a roughly consistent and sustained manner. At some point one of those factors becomes too scarce and the system crashes, leading to a plunge in living standards and possibly a population crash as well.
• Adam Smith: In ancient times the opulent and civilized found it difficult to defend themselves against the poor and barbarous nations. In modern times the poor and barbarous find it difficult to defend themselves against the opulent and civilized. The invention of fire-arms, an invention which at first sight appears to be so pernicious, is certainly favourable both to the permanency and to the extension of civilization.

• Today’s economists are smarter and better trained than ever before, but something about economics has changed fundamentally. More specifically, economics is no longer a carrier of ideas. It is primarily a means of data collection and very sophisticated hypothesis testing.

  I am not saying this change in economics is either good or bad, rather I am observing that it has occurred. For one thing, the demands of specialization, and to produce effective tests of hypotheses, are higher than ever before. For another thing, the proliferation of literatures outside of economics (narrowly construed) has made it harder than ever before to be a successful generalist at the highest levels of professional achievement. And so we have split these two functions, namely “carrier of ideas” and “tester of economic hypotheses” into what are largely two separate groups of people.