From our Programs Page
It is important for our supporters and contributors to know what the Institute of Dynamic Economics is up to, with a minimum of rhetoric and a maximum of detail and substance. Below this note is a more complete description and exploration of our programs, but as executive director, I want to make an effort to describe our immediate strategy and the programmatic components.
Economics as a functional tool for the real world is largely broken. A Neoclassical design is enforced on the intellectual community by a Ptolemaic theocracy, entrenched in leading institutions, universities and the academic journals. A market fundamentalism has established a large and undeserved influence on public policy, due largely to the impressive financial backing of political campaigns. A supply side confusion exists on Wall street, born of the need for a legitimating myth for speculation alongside the need for technical descriptions of markets that are at least minimally convincing, and arising also from the dysfunctional preparation by schools of economics. It is an imposing, labyrinthian, but fundamentally weak structure, since its foundation is unsound. The financial crisis, the profligacy rampant in the financial sector, the befuddlement of the Fed, IMF and other authorities, and the manifest failure of their policies to work express starkly the inadequacy of their approach.
An opportunity to exploit this vulnerability begins with a focus on dynamic and monetary Keynesianism developed in a line from John Maynard Keynes and the later work of Irving Fisher through Hyman Minsky and Steve Keen. This is only one segment of the daisy chain of fallacies, but for the average person and for the real business enterprise, it is primary. By good fortune or Providence, Steve has become IDEA's chief economist. The focus begins here because this is exactly where the edifice of the orthodoxy is weakest.
The work of Steve, of Michael Hudson, Ann Pettifor, James K. Galbraith, Dirk Bezemer, Edward Fullbrook (all of whom are on our Advisory Board) and others is detailed and convincing. Their analysis will eventually prove out, but "eventually" is a long time, and an intellectual victory ceded long after serious economic damage has been done will not be satisfying to anybody.
Detail and Substance
- Establish the Institute of IDEAeconomics as a funding mechanism for those already in the field doing the work and as a provider of data, tools, technical resources and collaboration for those who want to make a difference.
- Enable Steve Keen, with the platform of IDEA to raise his critique further into the mainstream. This includes the completion of Finance and Economic Breakdown, his work in progress that promises to provide the definitive theoretical, empirical and practical explanation of the crisis and the current economic condition.
- Work with Michael Hudson and Dirk Bezemer to clear a technical bottleneck in the data preparation for their new work. An IDEA working group with the technical chops is now in the early stages of that effort.
- Create a usable, self-populating database for economic and financial data, beginning with and specializing in credit, debt and financial flows. These data exist, although they need to be disentangled and accessed with advanced programmatic techniques to be fully accessible. We will coordinate this with other organizations (more to follow on that), but the object is to make IDEA the destination site for this data.
- Support assist the use of Minsky, the dynamic modeling software being developed by Steve and Russell Standish. Minsky is where it is today thanks to the impetus from a Kickstarter campaign last year. Many of these backers have joined, or we hope will join, in supporting IDEA. (Minsky was the SorceForge project of the month for January.) Prospects for major new development funding are on the horizon elsewhere. IDEA's role is in helping early adapters, people who want to use the capabilities of truly dynamic modeling and the ability to incorporate financial flows in their academic or professional work, but who are reluctant because of the absence of a good user's manual or discomfort with the user interface, or for other reasons. Steve will work directly with a limited number of individuals. We will also facilitate downloading and report on the progress in development.
- Collaborate with the World Economic Association, its members and the several important journals it sponsors. In terms of impact on economics in the academic community, there is no more important work. The WEA, under the leadership of Edward Fullbrook and Norbert Haring, has no rival. The AEA (American Economic Association) is in thrall to a Neoclassical orthodoxy by apparent institutional ossification. The WEA as an alternative is brilliantly designed, extremely popular and radically underfunded.
There are, of course, other projects that are worthy, and perhaps essential. But our intention at IDEA is make sure to accomplish what we set out to do. Much of that depends on the extent of the response from you. We have reached this point as an all-volunteer effort, and will continue to rely on volunteer collaborators. The website is the expression of IDEA as institution, its blog, data tools, coordination with contributors and donors. It will progress in direct proportion to the support we get -- financial and time and talent. It is not the object of IDEA to become an enclave or bureaucracy in itself. In fact, is the object NOT to do that. We intend to support those already in the field, not so much new economic thinking as the development of the economics that has already proven its validity, but is excluded from the debate.
Our initial target budget is $1.5 million over three years. Our priorities are in order, so each dollar is more important than the next. Each collaborator is more important than the next. That said, it is clear that we cannot reach our goal without everyone pitching in. It is also clear that we cannot get to the appropriate level as a membership-type organization. IDEA will have to find larger donations where this has been difficult in the past.
I hope it is evident that our agenda is do-able. And it will get done, sooner or later. Sooner would be better for everyone. John Kenneth Galbraith observed that "All successful revolutions are the kicking in of a rotten door." A revolution into a new understanding -- the public's the media's that of policy-makers and academics -- is imminently possible. The orthodoxy's rotten door is the misunderstanding of money, banking, credit and financial dynamics. IDEA will be as effective as its support.