Thursday, March 26, 2009
Micro-blog: The market and the state, a few further reflections
Earlier today I showed my freshmen economics students the second half of episode 1 of the PBS series, Commanding Heights. Here's a link:
Episode 1, "The battle of ideas", treats the pendulum swing between the market and the state, over the course of the 20th century, that I've written about at length in previous entries. What struck me on rewatching it on this occasion was how sanguine everyone (except one disgruntled British coal miner) appeared at the end of the episode (filmed in 2002) about how the battle of ideas had been won, and there had been a decisive turn towards the market and away from the government, summing up the conventional wisdom on the triumph of deregulation and "supply side" economics, some twenty years or so after the onset of the Reagan Revolution. Gordon Brown and Larry Summers were agreeing that recent experience had shown that it was the market that best harnessed entrepreneurial forces, and that old debates on which is a better way to govern the economy, the market or the state, were passe. It's interesting that those old debates, that were thought to be dead and buried, are back, alive and kicking, and insisting on a re-airing, and re-thinking, as we come to grips with the aftermath of the financial crisis. "All of this has happened before, and all of this will happen again," as the Cylons like to say.