Last year I published a mostly positive review of John Quiggin’s Zombie Economics in Policy magazine, which I never got around to cross posting here. Here it is:
In a recent, noisy debate between Princeton economist Paul Krugman and Harvard historian Niall Ferguson, Krugman scolded Ferguson as belonging to a ‘Dark Age’ of pre-Keynesian economics. In justifying his thoughtful reply, Ferguson retorted cheekily: ‘A cat may look at a king, and sometimes a historian can challenge an economist.’
Around the time of that well-publicised tiff in mid-2009, a dike was breached: at least since then, an ongoing squabble has occurred about the value of economists’ analysis in society, given the degree to which the global financial crisis was unanticipated by the profession. Into this debate, John Quiggin—certainly a king within the Australian economics profession—released his book Zombie Economics.
Quiggin is one of the most influential economic theorists in Australia. His most well-known contribution to the field, in expected utility theory, launched him in the early 1980s to international fame (or at least as much fame as could be gained in the sub-discipline of expected utility theory); since then, he has written several popular books on industrial relations, microeconomic reform, and taxation as well as a large number of papers on a diverse range of issues, including risk pricing and environmental economics. Since 2002, he has been a figurehead in the Australian blogging community, and with Zombie Economics, he pioneered a new editing strategy, publishing chapters on his blog to solicit criticism from readers. Since 1996, he has been a regular columnist for the Australian Financial Review, and he is a federation fellow at the University of Queensland.
Quiggin is a self-described social democrat who does not shy from public debate, welcoming opportunities to engage those he disagrees with. Quiggin’s writing, at least from the late 1980s, has been consistently critical of faith in ‘economic rationalism.’ Most recently, he has been a fierce public critic of the Queensland Rail privatisation. Zombie Economics is his latest salvo at the perceived oversteps of laissez-faire economists. The book takes aim at five big ideas that he believes should have been finally discredited by the global financial crisis: the so called great moderation in the business cycle since the mid-1980s; the efficient markets hypothesis that financial market prices incorporate all of the information we have about the future; the belief that dynamic stochastic general equilibrium models can describe the macroeconomy and wisely inform fiscal and monetary policy; the trickle-down theory that the poor can be effectively helped by policies that directly benefit the rich; and finally the belief that the public interest is best served through the privatisation of public enterprises. Quiggin builds his case against these ideas around the zombie motif, the zombies being the theories he believes should have been buried by experience but somehow dig out of their graves and shuffle onwards in the public debate. Quiggin clearly relishes the zombie metaphor and opens each chapter with zombie images to help break up the challenging combination of history, empirical evidence, and rhetorical flourish that make up the rest of the book.
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