Alex Tabarak Recently discussed an article that criticizes philosophers for discussing the past:
Hanno Sauer on why philosophers spend so much time reading and writing about dead philosophers:
Ironically, this post appeared directly after one Posted by Tyler Cowen suggests that the quantity theory of money is still important. Almost all of the best works on QTM are written by dead economists.
I’m not well versed in philosophy, but one of the biggest problems with economics PhD programs is that the teaching focuses too much on recent work and too little attention is paid to macroeconomists who did their work 100 years ago. Students work with a limited set of models, which often reflect a single approach to macroeconomics. Thus in recent decades, the rent cost of finance (focused on interest rates) has displaced the value of finance and the quantity of finance. Yes, these two alternative approaches have problems, but so do interest rates. More importantly, they also contain insights that help us better understand the world, insights that may be missed by those who focus only on interest rate-based models.
In my view, a grad program in macro should spend 1/3 time teaching the history of economic thought, 1/3 time teaching the history of macroeconomics (ie historical data), and 1/3 time teaching modern models. If macros had probably done so in recent decades, economists would have realized earlier that a tighter monetary policy by the Fed was leading the US economy into recession in late 2008.
I have a book coming out this year (tentatively titled Alternative approaches to financial economics), which tries to solve this problem. In my view, it’s not possible to truly understand a field like macro unless you look at it from multiple perspectives. Unfortunately, the wisdom of macroeconomists such as Irving Fisher, Ralph Hawtrey, and George Warren has been largely forgotten. Even Milton’s concept of Friedman is fading into the past.
Here’s Irving Fisher and his son: