VoxEU's Global Crisis Debate

VoxEU.org has a new initiative aimed at influencing the agenda of the next G20 meeting in April. Good for them. It's great to see the acedemia harnessing the internets to take seriously the issues facing our global economy.

However, in the event that they influence the ideas put forward by the G20, there's no guarantee that our political leaders will actually, ya know, do anything about it.

Have Academic Economists Influenced The Bail-Out?

That's the question Nick Lembo asks over at Zeitgeist after the most recent proposal to respond to the financial crisis comes much closer to suggestions made by influential academic economists than Henry Paulson's TARP. It's hard to deny that academic economists have had some influence over the debate, but how much?

Personally, I'm skeptical. Once we move past the usual qualifications about correlation and causation, I think it is important to note that these economists have been proposing similar solutions for several weeks now, if not months. Krugman has argued that it was ideology which prevented Paulson from making proposals that would move America closer to a partially-nationalized banking sector, and it took action by the UK to snap them out of it. But the Economists' profile of the Treasury Secretary suggests he is more a pragmatist than an ideologue and that the TARP may have reflected both the realities of Congress and the fact that Paulson simply wanted to be free to take control.

The latest plan is probably an extension of that pragmatism. Policymakers on both sides of the Atlantic are now moving in the spirit of FDR's formula of "bold, persistent experimentation" to deal with economic crisis - albeit belatedly. Gordon Brown, for instance, is a big believer that politics should matter; this was a chance for him to prove it. No doubt the UK's plan - which was emulated by the US and the rest of Europe - was influenced by the government's in-house economists, but it was political leadership that drove it forward.

Moreover, Bernanke appears to have favoured this approach along. He's an accomplished academic in his own right, but, unlike the econ-bloggers, he's on the inside. (I'm also noticing that most of the photographs accompanying articles about the new plan feature Bernanke front and center, with Paulson in the background...).

So what does all this mean for the influence of academics on policy? I think that the explosion of blogs by pre-eminent economists has changed the nature of the policy discussion and has certainly made economic ideas more accessible to the general public. But when it comes to policy, those academics on the outside are going to have settle for, at best, indirect influence.

Gin, Television and the Social Surplus

As Tyler Cowen points out, blogs are successful aggregators only if they cover topics somewhat randomly. If you want to find out the most-popular/respected views on the state of the Russian-EU gas relationship, you're probably going to head straight to Google. Chances are you will not come here. Which is too bad, because Rory's just wrote an excellent essay on the topic. But as editors of a blog, we're striving to create "value-added" by providing reading material of interest on a whole range of topics, even if they occasionally have only tangential links to IPE. It's also more fun for us.

So here's a little essay I came across some time ago, but was reminded of by a recent conversation with a friend. Apparently, the internet has reached the point where one new blog is created every second. Thatsalottablogs. Admittedly, most of these blogs will be crap. But unlike the crap you find on television which has been vetted by marketing execs and focus groups, the crap on the internet is almost entirely home-made. Even better, what constitutes "crap" is a matter of subjectivity, so there's a much more democratic element to how people choose to use/waste their time on the 'net. Moreover, the creative potential inherent in the internet is almost too big to grasp. If someone has an idea and posts it on YouTube, it's possible to reach literally millions of people - take this absorbing video by Noah featuring an unreasonably addictive piece of music by Carly Commando.

So even if only a fraction of the stuff on the internet contributes to a better society in any shape or form, that's going to change our social landscape a great deal. At least, that's what Clay Shirky thinks is happening with what he calls our collective 'cognitive surplus:'

Let's say that everything stays 99 percent the same, that people watch 99 percent as much television as they used to, but 1 percent of that is carved out for producing and for sharing. The Internet-connected population watches roughly a trillion hours of TV a year. That's about five times the size of the annual U.S. consumption. One per cent of that is 100 Wikipedia projects per year worth of participation.

I think that's going to be a big deal. Don't you?

The above quote doesn't do this essay justice: there is much, much more in the full text of Looking for the Mouse. Also, if you're feeling extra-lazy, there's a video version of the same talk if you scroll down the page here.

(image from scienceofdrink.com)