Good Ideas in Economics: A Classification
redux
"A short classification. But what there is of it is choice"
said Brad DeLong.
Also he has readers so, when posted on his old blog, this got comments

My belated appreciation of one of Tilman Ehrbeck’s good ideas makes me think of the general topic of good ideas in economics. I think they can be classified as follows:

1. Good ideas which you can find if you read The Wealth of Nations carefully. The whole idea that this is a worthwhile field of inquiry has a lot to do with the fact that one of the first books in the field was brilliant.
2. Good ideas which you can find in Marshall’s Principles.
3. Good ideas which are roughly implied by the work of Walras.
4. Good ideas which you can find if you can translate [Keynes's] General Theory into economic theory.
5. Good ideas which you can find if you can translate Schumpeter into economic theory.
6. F. A. Hayek is a reactionary but he had some interesting things to say.
7. This is an implication of standard neoclassical theory, that is, maximization under constraint. Therefore it is to be found in the collected writings of Paul Samuelson.
8. Milton Friendman mentioned it in passing while reflecting on the wonders of the quantity theory of money.
9. This has something to do with game theory. Von Neuman mentioned it to Morgenstern, but it was formalised by Nash.
10. This has something to do with asymmetric information, so check the collected writings of Joseph Stiglitz. He has published five to ten papers based on this idea.
11. Read the collected writings of Robert Solow. As a Spencer Tracy character said of a Katherine Hepburn character “there aint much of it but every bit is choice”.
12. This isn’t really economics, it is sociology, Akerlof thought of it.
13. This isn’t really economics, it is psychology, Kahenman, Tversky or Herrnstein (see point 6 above) thought of it.
14. This idea is not found in any of the writings of the authors listed above. It is an excellent idea in economics. Clearly Kenneth Arrow thought of it. You can only hope that he never bothered to write it down.

Posted by DeLong at January 27, 2005 01:32 PM
Comments with replies

Where does land value taxation fit in? Maybe (1)?
hmm I would guess Walras or maybe Ricardo (see below). Pollution tax however is really due to Richard Musgrave

Posted by: liberal at January 27, 2005 03:26 PM

15. If Karl Marx thought of it it can't be a good idea.

His refutation of the labor fund theory of wages (Wage Labor and Capital pp 1- early) is definitely sound. His analysis of the neoclassical growth model is sound although probably not original. I mean Marx has a close to perfect record of being wrong about economics, but no one is perfect.

Posted by: ogmb at January 27, 2005 04:07 PM

Or alternatively: If Karl Marx thought of it, either it was a bad idea or a deradicalized version of it appears as a new subfield a few generations down the road.
Marx anticipated a lot of things which were formalized later, but most were in writings of other classical economists before Marx. Recall I am talking about economics. Other fields like sociology and political science seem to me to have a whole lot of deradicalized Marx (and plenty of 200 proof Karl)
Posted by: Kieran Healy at January 27, 2005 05:00 PM

(9) is wrong because Morgenstern, von Neumann and Nash didn't extend game theory to the dynamics - you've got to put one of the evolutionary people there (Gintis, maybe?).

I would say Maynard Smith (who amusingly adds no names to the list). He is the biologist who came up with the idea of an evolutionarily stable strategy. Oh and it's obvious that evolutionary biology has something to say to game theorists. I mean I said that when I was an undergraduate (Brad came up with Grossman-Hart when he was in high school).
Posted by: derrida derider at January 27, 2005 05:39 PM

16. Good ideas which turned out to be special cases of general findings in biology and ecology. [division of labor; comparative advantage; institutions; almost anything salvageable from #6] see above for evolutionary game theory. On Hayek, "The Road to Serfdom" is brilliant. It presents a hypothesis which has since been rejected by the data, but it is brilliant. Of course it is deradicalized Marx standing on his head and not economics. I was thinking of delocalisation of information.

Posted by: Lee A. Arnold at January 27, 2005 05:56 PM

15. This really isn't economics; it's a theory about economic history; Karl Marx thought of it.

I was classifying good ideas

Posted by: Randolph Fritz at January 27, 2005 07:35 PM

6.a What Thorstein Veblen would have written if he had been around to review Road to Serfdom.

Posted by: Paul G. Brown at January 27, 2005 10:56 PM

ah if only

How could we forget!

15. What Ricardo said.

Posted by: Paul G. Brown at January 27, 2005 11:01 PM

good point

16. You think that this is just a proverb, or one of those things that has always been around, but actually JK Galbraith said it first.

Posted by: dsquared at January 27, 2005 11:36 PM

As Paul Samuelson pointed out Galbraith understood that economics is too important to leave up to the economists. Actually I have recently been fascinated by Galbraith's thoughts on bloated corporate bureaucracies (search for "amateur economist" in this blog

You think you have a brilliant, original idea -
Peter Diamond already had it!

Posted by: kevin quinn at January 28, 2005 09:10 AM

Second point conceded.

17. This idea is important in a fascinating way, but nobody alive today cared about it until it was blogged.

Posted by: sampo at January 28, 2005 03:34 PM

"16. Good ideas which turned out to be special cases of general findings in biology and ecology."
- Lee A. Arnold
that gets my vote for best addition to the list (it subsumes my suggestion anyway). 'cept maybe add engineering to biology and ecology.

Posted by: derrida derider at January 29, 2005 01:59 AM

"16. Good ideas which turned out to be special cases of general findings in biology and ecology."
- Lee A. Arnold
that gets my vote for best addition to the list (it subsumes my suggestion anyway). 'cept maybe add engineering to biology and ecology.

Yeah, except that a great deal of both ecology and biology learned it from economics...

Oh come now, your not suggesting that Darwin though of evolution by natural selection while reading Malthus or something are you ?

Posted by: David Lloyd-Jones at January 29, 2005 10:59 AM

1. Glaringest omission that economists would agree with:

Ricardo! The fellow who gave us the law of "comparative advantage" that Larry Summers (whom you STILL haven't mentioned. AMAZING!!!) invoked to prove (sic) that discrimination could not exist in the market for academic jobs.

Ricardo conceded above

2. Glaringest omission that economists would not notice:

BOYZ ONLY!!!

That would probably be Joan Robinson, imperfect competition and price stickiness (also Adolf Berle). I got a PhD in Cambridge MA in 1989 and price stickiness makes me ill
3. Query: If Stiglitz gets credit for the idea of "asymmetrical information" why the heck did Akerlof win the BS Prize?

I said was to be found 5 to 10 times in the work of Stiglitz, not that it was published nowhere before. Akerloff gets the brilliantly open minded prize for finding a pony somwhere in the sociology literature

Posted by: df at January 31, 2005 03:03 PM


Oh good idea in History of Economic Thought "There is nothing new under the sun ... except for game theory" by Murray Milgate.

Actually the comments are alarming. My list was a joke, but the number of good ideas which I failed to mention which were pointed out in comments is alarmingly few