Wednesday, June 29, 2016

Lars P. Syll — Mainstream economics — a pointless waste of time

Be sure to read the comment by Asad Zaman also. Zaman argues that conventional economics is not merely a pointless waste of time but designed for a purpose and to make very explicit points about it. This is not ignorance but deception and part of class warfare.
My view is that economics does perfectly what it is designed to do. It is a MISTAKE to think that conventional economic theory is WRONG. In order to make progress, it is essential to understand the function of economic theories.
1. Every economic policy hurts some groups and helps others
2. No group has sufficient POWER to ENFORCE policies favorable to them.
3. Groups with power MUST somehow create consent among a majority to enact policies favorable to them. If they do not do so, then policies against their interests will be enacted in a democracy.
4. People judge policies according to their THEORETICAL IMPACT, since no one can actually foresee the future. This means that policies are not evaluated as good or bad according to reality, but according to how widely accepted theories predict their impact (for a vivid example, consider BREXIT)
5. Thus the elite, the top 1%, are faced with the necessity of creating theories which show that policies which favor their interests are actually benefical for all, or for a majority.
 [6.?] Let us a label a theory to be ET1% — an Economic Theory of the top 1% — if it shows a policy to be favorable for the majority, when in fact the policy actually favors the top 1%.
7. Now if we consider conventional economic theory, it is easy to show that nearly all of it is ET1% — it is DESIGNED to prove that policies which favor the top 1% are beneficial for all. 
NOW LET US consider dominant economic theories and models in the light of this analysis.…
Real-World Economics Review Blog
Mainstream economics — a pointless waste of time
Lars P. Syll | Professor, Malmo University


Kaivey said...

I've been saying this all along in this site, not that I know a lot about economics, it just instinctual. The advanced mathematics behind utility and 'greed is good' questionable. If I was rich, this is what I would say too. And being extra greedy is even better, of course.

Ryan Harris said...

Shifting incomes for American jobs 1960-2014

mmcosker said...

The problem is the focus on the 1% - there will always be a 1% unless you are going to Harrison Bergeron people. Even with MMT - a Job Guarantee, or basic income, or strengthened Soc Security - you will have a wealthy 1%. The lower classes will be more secure however, but the 1% who own businesses that sell to the lower classes will benefit form the income generated by a job guarantee or basic income, or better SS benefits. I think once people stop making it a mutually exclusive bargain (e.g. we cannot help the bottom 25% unless we stick it to the top 1%), then we will get better economic policy.

Never mind the fact that we need to stop with federal debt and deficits are always bad stuff.

peterc said...

Conventional economics *is* wrong though. It is logically (internally) inconsistent. Unless we pretend that the capital debates never occurred, this is indisputable.

Saying conventional economics is not wrong, just right from the perspective of the 1 percent, seems to suggest that heterodox economists are also neither right nor wrong, just theorists for the 99 percent.

This would make us mere partisans for a different social group and our theories neither more right nor more wrong than conventional economics.

To be potentially correct, a theory has to be at least internally consistent. Conventional economics is not. This has been demonstrated on strictly logical grounds.

If we pretend otherwise, we just play into the hands of the mainstream who have tried to wipe this intellectual history from the record.

MRW said...

Never mind the fact that we need to stop with federal debt and deficits are always bad stuff.

??? HUNH? What are you talking about?

Federal “debt” is another name for what the US federal government creates when it issues new interest-free USD. Has to account to the People for it, record it, somehow, so it places that amount on the right side of the ledger under the “Liabilities” column. What it’s being created for goes in the left column, under “Assets.” In 2015, the US federal government created $60.8 trillion. It redeemed (took back) $60.4 trillion. The remainder (around $326 billion) remained in people’s bank accounts and pension funds. Another name for that remainder is National Debt.

Deficits are the difference between what Congress wants to fund for the benefit of the people (ostensibly) which it does by law, and what the taxing authority collects in taxes. One has nothing to do with the other, but it was an accounting artefact defined while we were still backing the currency with gold domestically before 1933 as one more check and balance on the nation’s gold supply.