Sunday, June 26, 2016

Pragmatism Wins: Cohen and DeLong's "Concrete Economics"



Brad DeLong easily has the most interesting mind in modern economics. Before this book, I was unfamiliar with his co-author. But when I saw that DeLong was writing a book, no matter what the subject, I was ready to pounce on it. Thankfully the people at the Harvard Business School Press gave me and advance review copy, and then I was inconsiderate enough to not read review it in any form until now.

What Concrete Economics calls for is an economic plan on pragmatism. The realization is that both parties may have strayed too far into an ideology that doesn’t work (neoliberalism in the vein of Thatcher and Reagan and continued to this day) in the light of the crisis that was almost ten years ago now. What we need, according to the authors, is to look at the administration of Hamilton’s Treasury Department on doing what is needed to help the country grow and prosper. It reminds me of the dictum attributed to FDR in the Depression – Try something, and if that doesn’t work, try something else.

The prescription is timely, since growing inequality and stagnating wages at the middle of the distribution have given rise to the voices of populism and xenophobia.  These current developments are scary to people who have tried to make the economic system work for everyone, and though I am to the left of the authors politically, I would much prefer a politics and economics of pragmatism much more than one based on fear of the other. Thankfully and hopefully, DeLong is a creature on the edge of the establishment, so maybe his voice will be heard in the next administration. (As long as the vox populi doesn’t make some sort of fatal mistake.)