Establishment Economics Under Siege

The Time of Monsters with Jeet Heer

The debate over the causes of inflation is heating up and showing an important divide in the discipline of economics. Mainstream economists like Larry Summers blame it on rising wages and recommend interest rate hikes to cool the economy by raising unemployment. But other scholars, notably Isabella Weber of the University of Massachusetts, have a different theory: they argue inflation is due to price gauging made possible by the Covid emergency and the Russian invasion of Ukraine. Weber’s ideas, which are gaining traction, suggest the solution is price control.

The possibility that establishment economics is losing its dominance over policy is making some economists angry. There’s been a vicious backlash to Weber’s work. To talk about the inflation debate and other examples of heterodox thinking on the rise, as well as the circling-the-wagon approach of the discipline, I talked to Marshall Steinbaum, an economist at the University of Utah and a Senior Fellow at the Jain Family Institute. On this episode of The Time of Monsters, we range widely over the discipline of economics and the unseemly hissy fit of many leading practitioners. Marshall’s twitter account can be followed here.

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