“Post-Keynesian”, as some of you may know, refers to a small group of British heterodox economists, who reject most consensuses on everything in economics. By pure historical accident, they have even come up with the same views as Austrian economists on some issues, (but they claim that they are the true proponents of those ideas, and that the Austrians only reached it for the wrong reasons).
Calling them Keynesian might seem misleading, because they do not fall into the same category as American economists such as Paul Krugman, Joseph Stiglitz, and J. Bradford DeLong. A very different lot from them. Since these are economists who studied at Cambridge after Keynes died, they are basically Post Keynesian.
Nassim Nicholas Taleb gave credit to Post-Keynesian economists in The Black Swan for certain innovative ideas, which he also reached independently as a mathematician and a derivatives trader.
Having been given this due credit, the Post-Keynesians are not happy about a mainstream author drawing public attention to them. Irritated, rather. Why?
They feel Taleb is too “Darwinistic”. Too social Darwinistic, that is.
Now hold on a second! There was no mention of Social Darwinism in the Black Swan that I can remember. Maybe there was, but you’d have to point me to the relevant section. No. So…what’s up with all that?
Writes Andrea Terzi in the Journal of Post-Keynesian Economics*, “survival of the fittest is a self-defeating approach under ontological uncertainty: in a nonergodic world, a strategy that succeeds under given conditions may fail under different conditions. To pursue the analogy, even Taleb’s black swan argument may face its own “black swan”!” and “Uncertainty cannot be permanently reduced, but the consequences of uncertainty can be controlled by devising institutional arrangements … and using the properties of a sovereign monetary system. System robustness increases when public policies address a system’s failures through the provision of demand and liquidity”.
So her beef…is that Taleb did not recognize use of ideas of uncertainty in public policy. In a book that was never about public policy. Which means he must be an extreme individualist. Which means he must be an evil social Darwinist.
You know, Taleb advocated neither for nor against government intervention, and on economics merely said that businesses pay their own price for not recognizing uncertainty, while governments make the general public pay. This idea was covered under one paragraph in one chapter only.
The whole unnecessarilly kneejerk reaction to Taleb’s mere lack of social democratic ideals is so confounding and self-defeating, that I can only imagine that the likes of Ms. Terzi are rapidly descending towards the obscurity they richly deserve. Buried along their grave will probably be the old European 1950s social democracy, for which the most radical post Keynesians most proudly stand to defend. And it’s a shame, given that they have good ideas. All thrown away, in the name of vanity.
*because heterodox economists write only for their in-house journals