Modern economics — an abstract monstrosity

8 April, 2016 at 16:46 | Posted in Economics | 1 Comment

The paradox of modern economics is that while the computers are churning out more and more figures, giving more and more spurious precision to economic pronouncements, the assumptions behind this fiesta of quantification are looking less and less safe. Economic model making was never easier to undertake and never more disconnected from reality.

howellSomewhere along the way economics took a wrong turn. What has occurred, and what has been vastly accentuated by the information revolution and its impact, is that economists have drained economic analysis both out of philosophy and out of real life, and have produced an abstract monstrosity, a world of models and assumptions increasingly disconnected from everyday experience and from discernible patterns of human behaviour, whether at the individual or the institutional level.

As a result, economists have not only failed to discern, explain or predict most of the ills which beset the world economy and society, but they have actively encouraged a deformity of perception amongst policy makers and communicators …

This misleading `black box’ view of the world purveyed by the economics profession (with heroic exceptions), at all levels from the most intimate micro workings of markets to the macro level of nation states and their jurisdictions, has been vastly reinforced by compliant statisticians who have brought a spurious precision and quantification to entities and concepts which may not in fact have any existence outside economic theory …

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  1. excellent


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