By the way, Joan Robinson and her colleagues had worked out a theory of stagflation by the early 1960s. Post Keynesians were advocating some sort of incomes policy, maybe a Tax-based Incomes Policy, in the 1970s.

Sure. In composing that true account, should we not include the actual, as opposed to desired, incentives facing politicians?

As to the differences between the Bretton Woods era and the post-Reagan era: take a look at the first graph (the blue line) in this Krugman post. (The rest of the post isn’t so relevant, though it’s not irrelevant either.) Now you may not see anything there that bothers you, but as a regular reader you know a bit about John Quiggin’s politics, so you can probably see what bothers him. It bothers me too, not so much because I care about equality for its own sake (I don’t begrudge the “Cork mafia” their yachts in the least), but because the Dubya era brought home to me a truth which Machiavelli knew: when the rich get very rich they don’t just settle for wealth, they want to buy power as well.

As for your last paragraph, there are times when laymen should stay out of economists’ arguments but I think this post is about a topic which is too important to be left to the economists: how does their conventional wisdom get established and what, if anything, does that have to do with empirical validity?

I’m also a little confused by the framing of “The big question for the crisis and after is how to develop and sustain a Keynesian system of macroeconomic management that can deliver outcomes comparable to those of the Bretton Woods era, while avoiding the excesses and imbalances that brought that system to an end in the 1970s”. Maybe I’m reading too much into it, but it seems like you were saying that the Bretton Woods era was essentially pretty good, up until the stuff at the end which made it untenable.

But isn’t that exactly the same thing you could say about the late 1980s through 2005? It seems that was at least as successful during the non-crisis years as Bretton Woods.

And really, which years are you counting as the good years of Bretton Woods? The Marshall Plan years which propped it up immediately post-war? The balance of payment crisis years 58-68? How many good years did it really have as a system?

(Again I just have popular-level understanding, so I’m raising questions which I admit may have obvious answers to formal economists).

Good for him and I regret giving up on his book and chucking it out when I moved house. But if I hadn’t, would I really be any wiser about how “how to develop and sustain a Keynesian system of macroeconomic management that can deliver outcomes comparable to those of the Bretton Woods era”, which is what John Quiggin is interested in?

I’m all for a more coherent approach to economic modelling, but let’s not forget that one reason IS/LM held sway for so long is that it enabled readers of the FT to understand the opinion pieces. Not only that, but the Treasury model builders could use beefed-up versions of it for simulating the effects of different policies. Likewise, Friedman’s accelerationist model enabled officials of modest brainpower to see why inflationary policies could only reduce unemployment for a while. Indeed the main reason why Keynes had such a large readership in his day is that he found wonderfully simple ways of expressing his main ideas – parables about buried banknotes, casinos etc. The Post-Keynesian school doesn’t follow his lead in that respect.

My understanding is that Hodgson, who wrote the piece that I linked to, describes himself as an Institionalist.

It’s an interesting point that JQ raises though. I can well imagine what the Austrian school and Marxists are making of the current crisis. But what ARE other, ‘heterodox’ schools saying? What is the view of the Institutionalists, and EE (Evolutionary Economics)?

I could go on, as I will demonstrate by turning to the Cambridge-Cambridge debate. Suppose the cost-minimizing technique varies continuously along the so-called factor price frontier. Pasinetti pointed out that the value of capital to worker need not vary continuously in such a case. This suggests exploring the application of bifurcations, complex dynamics, and catastrophe theory to capital theory. And Rosser has done this.

And Post Keynesianism is only one alternative. Institutionalism, which lies, in some sense, between the Historical Schools and Evolutionary Economics, is another. And there are more.

I suppose Quiggin could find ideas to rip out of their context here and to use as epicycles for neoclassical economics. But I’m with Pitkin in comment 3.

In this context, as I’ve mentioned, the most interesting post-Keynesian ideas seem to me to be those following Minsky on financial instability and, at a more abstract level, ideas about uncertainty, unforeseen contingencies and so on. But, if you think other ideas are more important, why don’t you write something about them, rather than sniping.

Hidari, I’m certainly not excluding behavioral economics – that’s exactly the approach Akerlof and Shiller are advocating (although there’s a bit of inside-baseball controversy about whether this or that approach is “really behavioral economics”). Experimental economics is absolutely mainstream – Vernon Smith got the Nobel for it not long ago. As regards the other approaches you mention, I haven’t seen anything on these lines that’s been very useful in understanding the current crisis, but feel free to point me in the right direction.