Homo economicus rejected by Mag Economicus

"Too much economics, say Mr Akerlof and Mr Shiller, has been built on the premise that humans are rational calculators. That is not a new criticism, even from economists. Over the past couple of decades Homo economicus has evolved into a being more like H. sapiens, as economics has drawn on psychology, biology and even neuroscience. “Behavioural” economics has shaped public policy—for instance, in encouraging people to save or in shaping the choice of investments in their pension pots. Behavioural economists have earned Nobel prizes. Mr Akerlof and Mr Shiller, however, complain that this evolution has been confined mainly to microeconomics. It is time for macroeconomics to catch up."

The economist writes an article essentially stating that the very basis of its worldview is wrong...but it's buried in the science section so I suppose hell hasn't frozen over yet.

Capitalism Beyond the Crisis

"Ideas about changing the organization of society in the long run are clearly needed, quite apart from strategies for dealing with an immediate crisis. I would separate out three questions from the many that can be raised. First, do we really need some kind of "new capitalism" rather than an economic system that is not monolithic, draws on a variety of institutions chosen pragmatically, and is based on social values that we can defend ethically? Should we search for a new capitalism or for a "new world"—to use the other term mentioned at the Paris meeting—that would take a different form?

Another addition to the current economic debate at the New York Review of Books.

Are we really all Keynesians now?

The Economist is in the process of running a three-day online debate entitled "This house believes that we are all Keynesians now". The debate will run all this week at Economist Debates. At the moment, the general consensus is that no, we are not all Keynesians. What seems to be lacking so far is any acknowledgement that maybe we need to look beyond the neo-classical/Keynesian labels.

We are all socialists now

On the issue of economic orthodoxy, the New York Times has published an interesting article by Patricia Cohen on the lag in University Departments accepting other economic theories as valid.

The sound of a paradigm shifting

Today's issue of Inside Story has an interesting article on Rudd's anti-neoliberalism essay by Geoffrey Barker. I would have preferred a more in-depth analysis of the essay and Howard's response but nonethless it's an interesting read.