The more I learn about the field of economics, the more I realize that my blog's name, Sybil, is quite appropriate. You may recall the 1976 film of the same name with Sally Field, recounting the true story of a woman who developed 16 personalities.
The many faces of economics aren't far behind. When one starts to study the field, you find that there are a multitude of theories and schools of thought, as is the case with most of the behavioral sciences like psychology, sociology, linguistics and others, and as contrasted to the hard ones like neurobiology, physics, astronomy, et al.
Just to name a few:
First, we have the Classical Austrians, represented best in these modern times by Von Mises and Von Hayek, dedicated to preserving the free market, a 100% gold backed monetary system, and small government.
Then there were the Keynesians, named after the English lord with an original lifestyle and an irresponsible, spendthrift philosophy: "Print the money and they will spend. (To hell with tomorrow.)" He was the Messiah in the 30s, then fell into disgrace, and now seems to be making a comeback through a future back door. (See below.)
The Monetarists inherited the ensuing pendulum swing. They are mainly represented by the sage Milton Friedman and his ilk. Within some great reasoning is their most precarious belief that a single body of economists (the Fed) holds the key to wealth and fortune for everyone, not simply by opening the Keynesian faucet of purchasing media, but opening and more importantly CLOSING it. I think history will find them off the mark as well. After all, this is simply measured Keynesianism, because once you let that particular cat out of the bag, you cannot put him back in - at least not all the way - to wit our dollar that is worth a 1900 penny or two today.
Next we have the economic Bottom Feeders, thriving and multiplying rapidly from all this political credit spending. The Progressive Socialist Taxer/Spender politicians, originally thought to belong to the Democratic Party but now pervasive in the Republican Party as well, have a tremendous influence on economic thought because they hold the reigns of power - and this whether they were elected by the Ds or the Rs. (They really should have their own political party label.) These people think they have the key to taking money from the rich to help the poor (and other special interests), simply by transforming their superior selves into the regal genies that are indispensable to the process. Unfortunately, a band of economists with fantasies of self aggrandizement have taken to fawning upon them. A pox on them all. (See this site
for an analysis of the whole Washington spectrum.)
Then we have the Sweet Water School and the Salt Water School, names invented by professor, economist, and fellow columnist Arnold Kling. The first holds that people act rationally and in their own interest when making economic decisions, and the second thinks that people don't, at least not always. The names come from the universities that lean towards each philosophy - Chicago, Minnesota and Rochester near the Great Lakes on the one hand (the Friedmans' fiefdom), and Harvard, Berkeley and MIT on the saltier coasts (the DeLongs, Kahneman, et al.) Personally, I think both schools have a semantic problem; but that doesn't stop them from trying to use the following fellows' methods to prove their case.
These are the Laboratory Ratkeepers and the Econometricians, the experimenters and math idiot savants who believe that everything can be reduced to double-blind games, algebraic formulae and computer models. Unfortunately, they don't all look before they leap to conclusions. Climatology has some of these risk-taking athletes as well.
Another: the Supply Siders put all their hopes in the basket of lowering taxes so that the people can spend their own money as they see fit - a marvelous idea, if only we could stop the government from spending the money we didn't give them and the Fed from feeding us too much credit and thereby stealing our purchasing power as fast as we will let them. I would tie Reagan's name in with this bunch, but personally I don't think he could be described as a Supply Sider.
He belongs more to the Adam Smith Common Sense Club, of which I make myself an honorary associate member. Schwarzenegger also tries to fit his ideas under Adam Smith's rather large hat; however, we'll see if he can stop splitting his own personality. (If it weren't split, he wouldn't be asking Warren Buffett for advice; and I'm sure being married to one of those Progressive Kennedy's doesn't help either.)
There are more schools of thought; but the one I like most is the one I know best: my own alma mater. Mine can be described as the Edward C. Harwood School of Economics, as he dissected, analyzed and professed it at his American Institute for Economic Reseach. He was a classicist in many ways, but differed from them in a few important aspects. More on this later.
See more about him