Smith v. Keynes

This week on Planet Money, an illustration of the difference between neo-classical (where did that “neo-” from?) and Keynesian approaches to recessions from the perspective of micro-economies.

I sympathize with the classical view. Not from a deep technical grasp of economic theory, but because it accords with a tragic view of human nature. The Keynesian approach ascribes far too much competence to human actors, it assumes they possess far more knowledge than they possibly could have, and stems from a view that the recurring, intractable problems of human civilization are not susceptible to localized and careful amelioration, but rather fixable in one fell swoop if only we gave the right sort of technocrats enough power.

But as always, an interesting podcast.