Economists — arrogant​ and dangerous ‘experts’

29 december, 2018 kl. 15:49 | Publicerat i Economics | 6 kommentarer

In advanced economics the question would be: ‘What besides mathematics should be in an economics lecture?’ In physics the familiar spirit is Archimedes the experimenter. aaaaafeynBut in economics, as in mathematics itself, it is theorem-proving Euclid who paces the halls …

Economics … has become a mathematical game. The science has been drained out of economics, replaced by a Nintendo game of assumption-making …

Most thoughtful economists think that the games on the blackboard and the computer have gone too far, absurdly too far. It is time to bring economic observation, economic history, economic literature, back into the teaching of economics.

Economists would be less arrogant, and less dangerous as experts, if they had to face up to the facts of the world. Perhaps they would even become as modest as the physicists.

D. McCloskey

6 kommentarer

  1. A truly great and wonderful rant, full of hope for a growing consensus within economics for reform of economics — published in 1991!
    .
    ”The market can remain irrational longer than you can remain solvent.” may need a corollary.

  2. It is time to bring economic observation, economic history, economic literature, back into the teaching of economics. D. McCloskey

    Now that it is understood that fiat is, as it should be, purely a creature of the State, then questions of equal protection under the law with regard to its creation and usage cannot be dismissed as irrelevant. Examples:

    1) Why can’t citizens use their Nation’s fiat in account form at the Central Bank as depository institutions do? Cui bono that they can’t if not ”the banks” themselves and the rich, the most so-called credit worthy?

    2) What need then for the government insurance of private bank deposits?

    3) What need then for any other privileges for the banks such as lender or asset buyer of last resort?

    4) Why should the debt of a monetary sovereign, being inherently risk-free, yield any more than 0% MINUS overhead costs?

    • Agree with everything in your post, except:
      .
      ”fiat is, as it should be, purely a creature of the State”
      .
      I claim that the private financial sector creates new derivative assets denominated in the same units as the state fiat. The net financial assets are really future claims on the central bank, created without the central bank’s foreknowledge, but honored by the central bank nonetheless …

      • Good catch. Thanks!

        How about:
        Now that it is understood that fiat may be, as it should be, purely a creature of the State,

        • I agree with your points; I just see no reason not to let bankers be bankers, but insulate the rest of us from their panics. An inflation-protected basic income deposit account at the Fed for those who ask would be ideal.

          • I just see no reason not to let bankers be bankers, but insulate the rest of us from their panics. Robert Mitchell

            Exactly.

            An inflation-protected basic income deposit account at the Fed for those who ask would be ideal. ibid

            Certainly ALL fiat creation should be for the general welfare and, besides deficit spending by the monetary sovereign, that could include a Citizen’s Dividend equally to all citizens to preclude price deflation.


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