Why have economists failed to adjust their theories about markets?by Philip Ball / December 19, 2012 / Leave a comment
Last Thursday, the Queen visited the Bank of England. It has been widely claimed that during this event she was “finally” given a response to her question in 2008 about why no one saw the financial crisis coming. Such reporting exemplifies all that is wrong about economic discourse today. Newspapers blandly reported the explanatory remarks offered to the Queen by one of the Bank’s economists, Sujit Kapadia, who picked up on her pertinent enquiry four years ago. Not one report examined the real content of Kapadia’s comments, let alone asked if it was correct.
As a result, it went totally unremarked that what Kapadia said is a shocking indictment of economic theory. Whether by good luck or good planning, Her Majesty received advice from a rare economist who has managed to escape the brainwashing of economic orthodoxy, is prepared to rethink some of the field’s deeply held—and misconceived—notions, and is looking for fresh inspiration outside the narrow boundaries of the mainstream tradition.