The future of economics as posited by Richard Thaler
I love this quote from Thaler on how, when and why the economics profession will change:
Thaler: What is the old line—that science progresses funeral by funeral? Nobody changes their mind.
What will happen is that the economists [in their thirties and forties] are pretty open to these ideas. They don’t think it is very controversial. That’s where economics will be in ten years. They will be running the subject. People like Posner and Becker and Fama and Lucas and I—we will be history
The New Yorker: But you don’t think the financial crisis and recession will cause an intellectual revolution in economics, as happened in the nineteen-thirties?
Thaler: No. Nothing will happen fast. But the next generation of economists, it is safe to say, will be more open to alternative models of human behavior and less confident that markets work perfectly.
The New Yorker: Do you think that Chicago economics of the old school has lost some of its swagger?
Thaler: No, I don’t see any measurable loss of swagger. Posner goes against the grain. He’s probably the counterexample to the theory that nobody learns anything. Becker and Lucas and so on—that group probably thinks he has lost his mind.
There’s another old line: “you can’t teach an old dog new tricks.”
Interview with Richard Thaler: Rational Irrationality – The New Yorker