A lot of time on a plane gives you time to read. Some turn to Jeffery Archer. Others resort to watching in-flight movies. I found something much more interesting. I cannot recommend Debunking economics by Steve Keen more highly.
This book shows that the maths on which all the arguments for competitive markets being the most efficient form of supply mechanism are wrong.
It shows that profit maximisation cannot and should not take place at the price economists suggest efficient, or firms will go bust.
It shows that economist's arguments on efficiency only work if the economy is made up of one consumer buying one product, despite which they also have to be clairvoyant.
And it shows that economists know this but most prefer to continue to argue otherwise because, like my friends on the American Right, they're either too dumb to do the maths, or they know that the economics they teach is simply dogma preached as if religion based on not one shred of evidence, but wish to promote the religion rather the truth.
You don't believe me? Read the book. I've known this to be true since my first term as an undergraduate economist when my lecturers tested credibility too far by making it clear that all they taught required me to assume that all market participants had perfect knowledge of everything everyone else was doing. But I've never seen it explained so well.
I'm not, by the way, saying markets don't work. They do. But I am saying the reasons economists give for them working are crap. That's a technical term we in the real world understand. Economists will assume it means something else. Reality is an assumption they suspended a long time ago.
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Let me say first I am not an economist but am a social scientist by training. I see economics as located in social time and space. My sense is the argument you have used to underpin the broader discussion is flawed by interpreted history.
History teaches me that all economic theories fail. Yet, as I understand it, you base your thoughts on a Keynsian view of the world. That was in turn based on a social view that has since passed and been rejected by successive governments.
I tried to get my head around Steve’s thinking but quite frankly got lost very quickly. The issue as I interpreted it is that he’s proposing a very narrow view of ‘economy’ that seems terribly sterile to me. That was whatr lost me. There was no connection between the science and the social so *for me*it fails.
I’d be delighted if someone can offer a convincing alternative view. These things are important because for me, any idea that proposes change with economic consequences has to be palatable as the first step to adoption.
Dennis
You’ve seriously misread Steve Keen then
You’ve also misread Keynes
You misread me come to that
Perhaps you’d better explain what you think the Keynsian view is
Richard
I have long given Debunking Economics prominence on my otherwise crowded bookshelf. Another book I strongly recommend is ‘Fooled by Randomness’
But maybe this is because I have never formally trained as an economist – so am unencumbered by all the fanciful assumptions on which the house of cards is built