I just finished reading this short interview with Cullen Roche, who has some out-of-mainstream views on current monetary economics. One of his major points concerns the importance of heterodox economics to the current discussion about the global financial system: "Many of the heterodox economists are overlooked though some take extreme political positions which explains why the mainstream shuns them."
This is an unfortunate state of affairs. Most economics departments are still filled with professors trained in the neoclassical economic approach to the economy, which is by far the reigning paradigm in the field. The rigorous exclusion of alternative theorists in economics is, in my humble view, one of the major reasons that few predicted the financial developments of the last year. The only area where some have gotten through is in behavioral economics, although even this sub-field certainly takes neoclassical economics as its core paradigm.
Unfortunately, economics, like venture capital and finance, is an imprecise science. There are techniques and tools that allow us to reduce complex phenomenon into its constituent parts, but it can be difficult to understand the interaction of these different variables. Economics is less mathematical in real life, and far more human. People follow others, get excited, get depressed, and just do irrational things. Unfortunately, I feel that we are going the wrong direction in academic disciplines of guaranteeing a plurality of intellectual viewports.
One of the advantages that Silicon Valley has over other innovation regions is the sheer number of start-ups that are in existence. We have an amazing level of diversity in almost every space, and if a particular approach is not around, entrepreneurs have an opportunity to fill it and potentially have a lucrative exit. In fact, some of the most important corporations here developed from doing something the opposite of everyone else (for instance, Google famously wanted people off their search results page as fast as possible - an approach at odds with every other search engine at the time).
Academia these days has taken a very different approach. Professors are awarded tenure for regurgitating research and publishing them in journals where others in the field will help to maintain orthodoxy. Research grants follow a similar strategy - panels of one's peers will judge research grants for quality, and these panels often refuse to fund the most original and potentially interesting research. This has the effect of forcing faculty to "revert to the mean" in order to just survive.
Intellectual diversity is crucial if universities are going to remain an important element of our research system. We need to ensure that diverse views are represented, and that different streams of research have potential for success. Economics, like all the social sciences, should not be about quantitative precision, but rather a search for the causes of social phenomenon. We need every approach possible to handle those challenges.