George Soros has decided to spend $50 million to launch a new think tank charged with reinventing the field of economics, which the Hungarian-American billionaire calls "a dogma whose time has passed." The Institute of New Economic Thinking, whose board members include luminaries such as Joseph Stiglitz and Jeffrey Sachs, will analyze the principles of economics in the wake of a financial crisis that discredited decades of research. "The dogma has lost touch with reality," Soros tells the Financial Times.
Economists largely failed to predict the financial crisis, and even Alan Greenspan now says the efficient market model he espoused contains a "flaw" that has to be remedied. INET will fund fellowships and support research aiming to fix that flaw, though Soros admits changing the discipline will take time. "The ideologists in the free markets are still in command," he says, "and I think they’ll be very difficult to remove because they have tenure." (Read more George Soros stories.)