It is part of an attempt to steer the discipline away from the champions of the free market and deregulation who, the billionaire financier believes, share the blame for the global economic crisis.Soros wants to incorporate a variety of sciences from philosophy to literature. The article did not mention whether Soros has suddenly developed a taste for Austrian economics although the projected framework could be interpreted as such. After all, what else is left once we disembark Keynesianism/Friedmanism and arbitrage-free portfolios, all concepts that ran into the detah trap of monetary expansion accompanied by capital misallocations?
The yet unnamed institute is funded by New York-based Institute for New Economic Thinking (Inet), a think-tank founded last October with a $50 million pledge from Mr. Soros to stimulate debate about the role of government regulation in the economy and financial markets.
More from the Times:
“The economic crisis and the failure of economists to predict it and protect society illustrate that economics as a profession needs to re-earn its reputation and regain its mantle of expertise,” Robert Johnson, a former managing director at Soros Fund Management, who is now director of Inet, said. Even now, more than 18 months after the start of the credit crunch, some freemarket economists appeared to be in denial about the causes of the crisis and there was no consensus about what to do next, he said.The man who broke the British pound in 1992 may be again spot-on. As was the pound overvalued then, as undervalued are non-Keynesianism economic models these days.
Too much of modern economic theory relied on sophisticated mathematical models to predict market behaviour. A broader, interdisciplinary approach to economics, taking in history, psychology, natural science — to deal with issues such as climate change — and even literature was now needed, Mr Johnson suggested.
He added that the university system of tenure and peer review gave established academics a virtual stranglehold on the debate and made it difficult for economists trying to promote a fresh approach to be heard.
UPDATE: Find the 26 high profile members of Soros' team here.