Duflo and Banerjee – A return to Political Economy?
Economics as a discipline has been subject to a wave of criticism since the financial crisis of 2008. A recent book by Abhijit Banerjee and Esther Duflo ‘Good Economics for Hard Times’ exemplifies this critique. The authors defend ‘good economics’ but criticise what they see as an overblown defence of markets which has undermined the case for state action to address looming social problems. Professor Ricketts will discuss similar criticisms of standard theory by classical liberal thinkers long before 2008 who were concerned that modern economics actually undermined markets and provided an overblown case for state action. Reconciling this curious contradiction in perceptions is not easy but we might at least find agreement in the proposition that ‘good economics’ is what used to be called ‘Political Economy’.