Putting all of this together, it doesn't sound like the sweeping conclusion at the end of Mankiw's column is justified, does it?
But Greg’s a smart guy! He doesn't really think that his op-ed is summing up the state of scientific knowledge. He knows everything I've written above. Some of it is even in his textbook. Clearly his goal is not to make a defensible economic argument.
To take him seriously is to miss the point. When he wrote this column Greg had a twinkle in his eye. He’s thinking to himself, “This is really going to annoy the liberals!” That’s what the central message of microeconomics is about, after all, once you put aside all the caveats and unlikely assumptions: self-interest is good for everyone, a free market is the optimal form of economic organization, and there is no conflict of interest between the rich and the rest. In real economics these propositions are hypotheses to be examined and quite often rejected, but in ideological economics they are ammunition to attack the left.This is why teaching neoclassical economics is ideological BS. Of course, it's just propaganda that has little if anything to do with either present reality or a feasible economics in modern society.
EconoSpeak
Mankiw: Let’s Really Piss Off Those Liberals
Peter Dorman
Tom, do you think this chipping-away at neoliberal economics is getting anywhere or is it just delaying the inevitable/
ReplyDeleteI think it is starting to become more widely recognized that much economics is ideological propaganda rather than policy science. Conventional economists are broadly under attack and this is getting reported in more media post-Piketty. Even Karl Marx is being mentioned without being demonized.
ReplyDeleteNeoclassical economics is irrelevant since it does not model the world in which we live, which is highly institutionalized and managed. Therefore, the so-called laws of economics do not apply as advertised other than in special cases. There is no general theory of political economy, although neoliberals pretend that neoliberal political theory is based on a science of economics that proves it. That's just propaganda and it needs to be called out as such.
It's only recently that central banks are correcting the previously false assumptions, for example. Heterodox economists saying it is one thing, and central banks quite another.The chipping away seems to be working.
This is growing legs.
In my view, there has not been enough emphasis on the role of institutions. This is not an economic issue either alone or even chiefly. The economics follow from the institutional structure of neoliberalism, which pretends to be about freedom but is actually based on corporate statism as inverted totalitarianism.