Tom Palley wrote last week a review of my One Economics, Many Recipes, and some people have asked me to comment on it. On the whole, I have very little to complain about: Tom's review is gracious and probably gives me more credit than I deserve. But he does take me to task for pushing the "One Economics" line instead of defending a plurality of methods of inquiry.
Part of the reason I have procrastinated writing this response is that in some ways Tom makes my case better than I did. Consider his main point:
But, while the many recipes thesis has strong appeal and empirical support, and suggests a spirit of theoretical pluralism, the claim of “one economics” is misguided, for it implies that mainstream neoclassical economics is the only true economics.
This is immediately followed by
Part of the difficulty of exposing this narrowness is that there is a family split among neo-classical economists between those who believe that real-world market economies approximate perfect competition and those who don’t. Believers are identified with the “Chicago School,” whose leading exponents include Milton Friedman and George Stigler. Non-believers are identified with the “MIT School” associated with Paul Samuelson. Rodrik is of the MIT School, as are such household names as Paul Krugman, Joseph Stiglitz, and Larry Summers. This split obscures the underlying uniformity of thought.
In other words, the neoclassical family can house such diverse views on economic policy as those espoused by Milton Friedman, on the one hand, and Joe Stiglitz on the other. What "uniformity of thought" is Tom talking about?
Similarly, Tom says:
This reality [of an increasingly narrow and exclusionary view of the discipline] is difficult to convey. One reason is that liberal neo-classical economists like Stiglitz and Krugman share values with heterodox economists, and shared values are easily conflated with shared analysis. Another reason is that heterodox and MIT School economists also often agree on policy, even if their reasoning is different. Finally, most people are incredulous that economists could be so audacious as to enforce one view of economics.
Well, maybe it is difficult to convey this reality because it does not have much bite, for all the reasons that Tom explains.
Tom is right that "heterodox economists like Thorsten Veblen and Joseph Schumpeter long ago raised many of today’s cutting-edge issues in neoclassical economics, including the role of social norms and the relationship between technological innovation and business cycles." But neoclassical economics is fairly good--in my view--in absorbing insights from outside perspectives and developing them in ways that their originators could not do. For my part, I have to say that I understand Schumpeter's key insights on technological innovation a whole lot better once I see it expressed in neoclassical garb (i.e., here is a bunch of firms, here are their choice variables, here is the market structure under which they operate, here is what they maximize, and here is what the equilibrium will look like...)
This is in part because I am not as smart as Schumpeter was. But then again, most of the students we teach aren't either.