The modern corporation is broken, says Colin Mayer, an Oxford University business professor whose provocative new book, “Firm Commitment,” is aimed at overhauling what is in my view the world’s most important institution.
The Bretton Woods economic conference would make a great movie: Dashing celebrity economist John Maynard Keynes of the U.K. squared off against U.S. Treasury official Harry Dexter White, who was later revealed to be a Soviet spy.
By now, you’re probably tired of all the back-and-forth on Reinhart and Rogoff. That would be Harvard University’s Carmen Reinhart and Kenneth Rogoff, the economists who co-authored the 2009 best-seller, “This Time Is Different: Eight Centuries of Financial Folly,” and who are now on the firing line because of minor data errors in a 2010 working paper.
In macroeconomics, ideas are more powerful than facts. That’s a shame, but it isn’t a criticism. Even with the best will in the world (a condition, admittedly, that’s rarely satisfied) economists who debate fiscal and monetary policy couldn’t settle their disagreements by appealing to facts. Their discipline is too difficult, or too far from being a proper science, for that to happen. Ideas trump data time and again.
It’s no surprise that economic philosophies tend to divide along party lines. In the U.S., Democrats advocate government intervention in the economy and align with the theories of John Maynard Keynes. Republicans extol the free market and Friedrich Hayek, and think an economy should be allowed to self-correct with as little government intrusion as possible.