When you follow economic news these days, it's easy to overlook how extraordinary it is that so few ideas are actually discussed. But why should we overlook this? How could an entire field be so moribund? Maybe the only way to make sense of this is to back up a step and imagine that you're living in 1776, when the first economics book was published by Adam Smith.
Consider the status of other sciences during this year when economics was founded as a science. For instance, look at the condition of medicine. If somebody had a serious injury of any kind, out came the leeches; or the physician bled the patient. This was based on the ancient theory of the Four Humours being out of balance.
In the 1800's a wounded soldier could expect little help other than a tourniquet and a saw. When you see that happening in the movies, you think, "Oh no, not another amputation; is that all you guys are good for?" It's strange to think that only a few generations ago, medical science hadn't made much progress since Galen in ancient times.
In contrast the science of economics got off to such a good start in 1776. After Adam Smith some good minds, like Malthus and Ricardo, added to the new field.
So what happened? Why did economics, the so-called dismal science, become the dead science over the last couple generations? To appreciate how dead it is, compare it once again to the medical sciences over the same time period. Have there been any economic ideas since Keynes?
In the 1970s the Keynesian Faith was losing believers since we saw high unemployment and high inflation at the same time. But with the financial problems of the last couple years, Keynes is making a big comeback, perhaps because in a crisis people instinctively turn back to the Faith of the Fathers. In fact you could say that today we are ruled by the Narco-Keynesians. I don't believe in them any more than an old-time physician who bled the patient to death.
All you hear is the same old Keynesian caffeine-jolt therapy that has been practiced for decades. Perhaps this can be explained by looking back at the career of Keynesianism: politicians were already buying popularity with deficit spending before Keynes provided them with intellectual cover. Politicians gain legitimacy when they can appeal to the authority of science. Many economists these days are employed, directly or indirectly, by the government. Lots of good jobs are at stake when government and science become intertwined in a symbiotic relationship. But the science dies.
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