What lessons can we draw from this? Well, for one we can say once again that: there are no true Laws in economics. Economics, to repeat a point I never tire of making, is an historical discipline. And if we don’t understand political and institutional arrangements we will understand nothing of relevance or importance. Insights such as Thirwall’s Law (which is not a law at all…) are of secondary importance when faced with the realities of actually existing economic institutions....
Those who wield such supposed Laws and insist on their timelessness and Absolute Truth are likely to make rather poor economic analysts. (I’m not referring to Thirlwall in this regard who, so far as I can see, recognises the contingencies involved in what he is saying). Such relationships need to be approached with an understanding that historical/institutional constellations come first and equations such as Thirlwall’s can only be made to generate insights within the framework of analysis provided by a given historical/institutional constellation.Fixing the Economists
Thirlwall’s Law in Historical Context
Philip Pilkington
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