Scottish-born economist – Angus Deaton – recently published his new book – An Immigrant Economist Explores the Land of Inequality – in which he provides a swathing critique of the state of the economics profession, particularly in the way that it impacts on policy making and societal well-being. He is a microeconomist who made a name for himself studying consumer demand, which means he has not contributed anything significant to the field of macroeconomics, where I hang out. The title refers to his migration to the US from Britain in the 1980s and his reflections on what he found and how the economics academy has changed over this 45 years in the profession. His point is that the economics profession has lost its purpose and should return to a focus on advancing well-being. He is particularly critical of Chicago-style economics – or ‘free market’ thinking. The problem though is that the neoliberal era has not been about applying Chicago-style economic theory. The elites just say they are doing that when in fact all they are doing is utilising the immense government capacity to shift the intervention dial in their favour. The government has not given way to the free market – it has just been reconfigured to become an agent of capital....
William Mitchell — Modern Monetary Theory
Neoliberalism has not been about applying Chicago-style economic theoryBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
8 comments:
“ It reminds me of a professor who told us in graduate school that when the facts contradict the theory the facts are wrong!”
That’s textbook Socrates 101…. iirc it was Hegel who said it first:
https://www.e-flux.com/journal/34/68360/hegel-and-freud/
“ Hegel notoriously maintained that if facts contradict theory, then “um so schlimmer für die Fakten”—so much the worse for the facts. This can be seen as indicative of the paramount arrogance of a philosophy that takes no notice of such trivialities as empirical data.”
All Art degree people are trained to think this way…
“This can be seen as indicative of the paramount arrogance of a philosophy that takes no notice of such trivialities as empirical data.”
I took a B.A. in philosophy and afterward went to law school. In college I was often amazed at the arrogance of my philosophy professors. They were truly rigid and parochial. They thought like religious cultists.
If I wanted to talk to people with some intelligence, I spoke to engineering students. They were able to accommodate paradoxes, unlike the philosophy professors. They understood when I pointed out the limits of sheer logic, and they tried to take me beyond logic via mathematics, which can involve intuition.
Engineering students understood that a theory is comprised of a nexus of facts, but that empirical facts often change, such that the theory must be revised in order to remain workable, or else discarded if the theory cannot accommodate facts.
By contrast, philosophy professors thought along the lines of “When the facts contradict the theory, the facts are wrong.” Essentially they were medieval scholastics (e.g. Duns Scotus or Thomas Aquinas) arguing over how many angels could dance on the head of a pin. They were, quite literally, insane.
Roman Catholic Church was established by disciplined Platonists…
This here:
“or else discarded if the theory cannot accommodate facts”
It’s this discarding that is trained in STEM so you don’t give it a second thought… you just rip the paper off the pad and crumble it up and toss it towards the garbage can and start all over…
This is not trained in the Art Degree process …
That teaches to form a synthesis with a part of your failed thesis to salvage at least part of your previous work…
It’s basically vain… vanity…
By contrast, philosophy professors thought along the lines of “When the facts contradict the theory, the facts are wrong.”
Economists are similar. In almost every case dig down to their 'simplifying assumptions' and that will be where the problem lies.
That's across the board. Their mathematical abstractions become too abstract and they forget the limiting assumptions of the tools they are using (particularly anything statistical).
The economy is an engineering problem. We need engineers on the job.
“ Economists are similar.”
No kidding 99.99% of them have the same degree…
"If one lined up all the economists head to toe around the world, you couldn't get two who agreed with each other." ~Harry S, Truman
That’s the way the dialogic method is supposed to work…
Everyone gets a say so whether they are right or wrong…
The diverse theses are synthesized…
The “Neoclassical Synthesis “ in the Art Degree Economics academe being a prime example..,
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