The Spread of Economic Ideas

Introduction

Policy ideas sprout among economists from time to time, often as a by-product of academic work. Yet sometimes, some of the same ideas can be found, far from home, in politics. As with coconuts on a far shore, questions arise. How did they get there? How, once there, did they survive?

The simple exchange model which economists are fond of is not well suited to describe this spread of ideas from academic to political life. Academicians “transmit” and politicians “receive,” but in what coin do politicians make payment? Prestigious jobs are rare: there are, after all, only three seats on the Council of Economic Advisers and seven on the Federal Reserve Board. The satisfaction of influence can be gained more reliably from students, and for money. “National reputation”? Surely most economists believe that reputation is not built of invitations to testify before Congress. It is not personal gain but duty, motivated perhaps by conviction, that calls participating academics to drop their coconuts on the waves. And the model that explains such a sense of duty is, of course, evolutionary, and was not cast in the mold of the market.

At its point of genesis, the policy idea is a pastime, an idle pursuit. But once on the far shore, in dealings among politicians, the matter becomes more serious. For politicians policy ideas are “plans of action.” And plans of action are the coin of the political realm. Good or bad, they are necessarily political; those responsible must evaluate them with political benefits and consequences firmly in mind. The cast-off coconut is soon lost to the mother tree, but to the natives on the far shore it is food.