As people tend to mimic what they’ve heard, it’s crucial in this crisis that the right ideas prevail
Ideas matter. They shape not just how we think, but what we do. And economics ideas matter more than most, given the central role they play in our politics, especially at times of crisis. I thought the idea that the UK was facing bankruptcy, supposedly like crisis-stricken Greece, played a major role in the speed and scale of austerity after the financial crisis, despite being nonsense. Others said it was pure politics, not ideas, that mattered.
Luckily, more conclusive evidence is available. A fascinating recent study examined the impact of US judges attending a controversial two-week economics course, which was criticised at the time (the final decades of the 20th century) for its bias towards conservative economics. The paper shows that judges who attended the course tended to use more economics-related language in the years that followed, including phrases such as “efficiency” in their judgments. They were also significantly more likely to deliver conservative verdicts in economic cases, ruling against government regulators and delivering harsher criminal sentences. So far, so worrying. And these ideas spread. Other judges “exposed” to the attendees of the course were also more likely to start using similar language.