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knowledge and the inefficient market of ideas

Brayden

I've been reading David Warsh's Knowledge and the Wealth of Nations over the last few days. The book details the discovery of economic growth theory, outlining the development of the increasing returns concept. Even if you're not interested in economics, this is an interesting book for academic folks. Warsh's book helps us better understand how ideas spread and gain popularity in this strange institution of academia. As Nicolai recently mentioned, the market for ideas is anything but efficient. The historical view of this book helps us to see the sources of some of these inefficiencies.

Competition for the best ideas is grounded in networks of real people who have interests that are semi-independent from the ideas themselves. In other words, academics are cliquish. These cliques often times keep good ideas from receiving the recognition they're due or they promote the durability of bad ideas that should have faded long ago. Take, for instance, the experience of Paul Samuelson – an economist now recognized as one of the all-time-greats but who experienced frustration at getting his ideas out early in his career.

Ahead lay Samuelson's various triumphs….Behind him at Harvard [where he had recently received his PhD] erupted a series of battles that cost the great old university its leadership in economics. The resistance to mathematics continued. Although Harvard University Press was compelled by prior agreement to publish Foundation, because Samuelson's dissertation had won the economics department's prize for best thesis, Chairman Harold Burbank ordered the laboriously hand-set plates (with their thousands of equations) destroyed after a single printing of 1,500 copies. That meant no revisions were possible for the next thirty-five years. Then, too, the Veritas Society, a group of alumni dedicated to opposing Keynesian influences, waged a witch hunt against the department….. (pg. 120).

Samuelson, of course, had the last laugh, but the struggle represents a common one depicted in the book: people come up with novel ideas that do not gain immediate recognition due to conflicts of agenda. As Max Planck, the physicist, once remarked, "Science advances funeral by funeral" (pg. 32).

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Written by brayden king

May 25, 2006 at 3:56 pm

Posted in brayden, economics

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