Recently, Businessweek published a commentary piece by Peter Coy that sought to examine both the breakdown of economic theories after the financial crisis of 2008, as well as how economists are looking back to the “old masters” to rejuvenate the discipline.

 

The article suggests that the 2008 financial crisis has prompted economists to reexamine economic theories, but so far, no consensus has been achieved. Economists, Coy writes, are looking back to economists like John Maynard Keynes and Friedrich Hayek to figure out what has gone so wrong. However, this looking to the past does not necessarily mean that the discipline is not making forward progress:

 

"The renewed investigations into the thinking of Keynes and Hayek may seem to signal that the profession hasn't advanced much in the past five decades. Yet it is heartening in a way, since it shows that at least some of today's economists are willing to reassess their theories in light of new data."

 

Coy continues, evoking INET founding sponsor George Soros:

 

“Equally surprising is that Soros, the bane of the Tea Party, has taken an interest in Hayek, the author of the libertarian manifesto The Road to Serfdom. Last year the Institute for New Economic Thinking, which Soros launched in 2009 with a 10-year, $50 million pledge, invited one of the world's leading Hayek scholars, Bruce Caldwell of Duke University, to speak at its inaugural conference at King's College, Cambridge. (Caldwell is the editor of the new, definitive edition of The Road to Serfdom.)”

 

“Soros clearly doesn't share Hayek's politics, though both opposed communism. Still, in a video on the INET website, Soros praises Hayek for understanding that economics, unlike the hard sciences, cannot make strong predictions because its subjects (people) are so elusive. ‘Somehow, in the last 25 or more years, this has been forgotten, and I think it's time to remember it,’ Soros says. “

 

Read more at the Businessweek website.

 

You can also browse our video content to learn more about the 2008 financial crisis and the new thinking that has resulted. Particularly, you can also watch this panel from our Inaugural Conference at King’s College, where George Soros, and INET Advisory Board Members Perry Mehrling, William White, and Roman Frydman discuss what happened leading up to the crisis:

 

[video:http://www.youtube.com/watch?v=MzvNw6xXcvE]