I had prepared a set of slides on "Can we avoid another financial crisis?", but with an audience exclusively of economics students at Sheffield University today, and pressed for time, I "went rogue", and challenged the limited nature of the "education" they get in economics today.
Gee it felt good! I've endured seeing rubbish portrayed as reason in economics for 45 years now, and I've hardly been silent about it of course. But I really cut loose tonight.
46 years ago, I was doing what these students are doing today: challenging what they are being taught as not merely inadequate for actually understanding the economy, but dangerously misleading about how this complex, evolving system actually behaves.
I know a lot more about all of those factors now than I did then, and economics has superficially changed a lot too since 1971, when I turned from being a Believer to being a critic. But beneath its modern veneer there is an even more extreme, Ptolemy-like vision of an inherently stable system, with "shocks" to explain its deviations from equilibrium, and "frictions" to explain their length, than I railed against at Sydney University five decades ago. It's deferents and epicycles by other names.
As a way to understand the economy, equilibrium methods are, as Keynes once said, "blither", both historically and technically. No-one in their right mind could imagine that the economy was in equilibrium--or merely displaced from it by an exogenous shock"--a decade ago. Yet economists continue to not merely defend, but champion, an equilibrium-focused methodology.
There is simply no excuse for that today. The century when using equilibrium-fixated methods to describe a dynamic, evolutionary system could be excused ended in the 1970s, when system dynamics and complex systems analysis were developed.
It's far past the time that economists should have adopted the modern methods that engineers, meteorologists and mathematicians have designed for handling complex, far-from-equilibrium systems. But they never will, if left to their own devices. They need the cattle prods of student discontent, and of public ridicule. I encouraged the students to keep giving their lecturers hell since, to take the gist of Keynes's frequently misquoted and misunderstood statement on "the long run":
"Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again."
Don't abuse mathematics by calling what mainstream economists do "mathematical" either! Their methods are superficially reminiscent of mathematics, but a better description is mythematics. The world deserves better.