Indoctrinated by Econ 101 — John Warner

My fundamental understanding of the world has been warped by a now challenged approach. I'm not alone.…

In the end, the chief byproduct of my general education exposure was a kind of indoctrination into the centrality of markets to understanding human behavior and the apparent importance of economics professors.

I’m not alone. Introductory economics could be one of the most widely received credits in all of higher education. And unlike other common courses (like say, first-year writing), Econ 101 is extremely similar institution to institution. Supply and demand is framed as a law in the same fashion as gravity. When supply and demand does not seem to work according to the “law” (e.g., health care) it is the not the law that is faulty, but the market itself, with much public policy effort going toward trying to bring the market in compliance with the law, often to negative effect.

That supply and demand might not be a law doesn’t seem to occur. Higher education seems to be bumping up against these tensions as well....

Bingo! That's is the purpose of it, after all. Some are finally waking up to it. Fake news is one thing that drives the narrative, and fake knowledge is another.

And it is not just Econ 101. The brainwashing continues through the PhD.

Inside Higher Ed
Indoctrinated by Econ 101

John Warner

See also

Real-World Economics Review Blog
Economics is an ideology

Simon Johnson — Saving Capitalism from Economics 101

All across the United States, students are settling into college – and coming to grips with “Econ 101.” This introductory course is typically taught with a broadly reassuring message: if markets are allowed to work, good outcomes – such as productivity growth, increasing wages, and generally shared prosperity – will surely follow.

Unfortunately, as my co-author James Kwak points out in his recent book, Economism: Bad Economics and the Rise of Inequality, Econ 101 is so far from being the whole story that it could actually be considered misleading – at least as a guide to sensible policymaking. Markets can be good, but they are also profoundly susceptible to abusive practices, including by prominent private-sector people. This is not a theoretical concern; it is central to our current policy debates, including important new US legislation that has just been put forward....

Fitting post on Labor Day (US holiday celebrating working people). Worth reading in full. Unfortunately it is about saving capitalism from its excesses rather than overhauling it.

Why is capitalism in need of an overhaul. The term, "capitalism," explains it.

"Capitalism" is a socio-economic system that favors capital (property ownership) over the other factors of production, land (environment) and labor (those that work for a living). This "market-based" system is institutionally based, and as such politically based.

Classical liberalism was about reducing government intervention in the economy. Neoliberalism is about government capture through politics in order to favor the interests of capital.

Politics is influenced by a simplistic understanding of conventional economics, which has been called "economism" to distinguish it from economics. Econ 101 is more about promoting economism more than teaching economics in terms of models that are substantiated by events.

Project Syndicate
Saving Capitalism from Economics 101

Simon Johnson |  professor at MIT Sloan, former chief economist of the IMF, senior fellow at the Peterson Institute for International Economics, and co-founder of the blog, The Baseline Scenario

Cameron K. Murray — Decent criticisms of economics? Here are 111 of them.

Just about any one of them is fatal.

Fresh Economic Thinking
Decent criticisms of economics? Here are 111 of them.

Cameron K. Murray

Oleg Komlik — Pierre Bourdieu: Economism is a form of ethnocentrism

Economic liberalism, typified by "economism," is not only an ideology based on restrictive assumptions that are normative and prescriptive in addition to positive. It is also ethnocentric, being based on Western culturally dominant concepts and values, and in particular Anglo-American concepts and values that have been dominant post-WWII, and which economic liberals have insisted upon universalizing as "natural."

Economic Sociology and Political Economy
Pierre Bourdieu: Economism is a form of ethnocentrism
Oleg Komlik | founder and editor-in-chief of the ES/PE, Chairman of the Junior Sociologists Network at the International Sociological Association, a PhD Candidate in Economic Sociology in the Department of Sociology and Anthropology at Ben-Gurion University, and a Lecturer in the School of Behavioral Sciences at the College of Management Academic Studie

see also

Fast Company
Are You Ready To Consider That Capitalism Is The Real Problem?

Jason Hickel And Martin Kirk

Noah Smith — Why the 101 model doesn't work for labor markets

Favorite line: 

If you raise the minimum wage, the increased income to those with jobs will also boost labor demand indirectly (somehow, activist and businessman Nick Hanauer figured this out when a whole lot of econ-trained think-tankers missed it!).

Anyone familiar with MMT would not have missed it either.

Noahpinion
Why the 101 model doesn't work for labor markets
Noah Smith

Peter Dorman — Economics: Part of the Rot, Part of the Treatment, or Some of Each?

Peter Dorman puts his finger on what wrong with economists. Econ 101 aka "economism" (James Kwak). As Paul Krugman has said on multiple occasions the framework of conventional economists (neoclassical) is rational optimization and equilibrium.

Peter Dorman submits that this framework guiding conventional economists is not empirically based and is simply assumed as the way that market economies actually work or should work if markets are left to themselves.

These fundamental assumptions that distinguish conventional (neoclassical) economics from so-called heterodox approaches are never questioned even when facts run counter to it.

Econospeak
Economics: Part of the Rot, Part of the Treatment, or Some of Each?
Peter Dorman | Professor of Political Economy, The Evergreen State College

Brad DeLong — Must-Read: Noah Smith: The Ways That Pop Economics Hurt America

I could have linked to Noah Smith directly, but Brad DeLong makes some worthwhile observations, too.

The heterodox have been saying this forever, but now the mainstream is picking it up and it is starting to stick, not only owing to the correctness of the analysis but the need of the times. It's obvious to all but the true believers that the story being peddled is not only bogus and is resulting in disaster that has spilled out of economics and finance into the social and political spheres. 

Mainstream economists are increasingly beginning to realize that this can't be ignored any longer without incurring reputational risk personally and damaged credibility to the profession as a whole, including themselves if they don't speak out.

WCEG — The Equitablog
Must-Read: Noah Smith: The Ways That Pop Economics Hurt America
Brad DeLong

James Kwak — What’s Wrong With Econ 101

Both Hayek and Friedman saw themselves as participants in a battle of ideas against encroaching socialism. In their hands, an analytical framework became a universal worldview: Economics 101 became economism. Economism is the belief that basic economics lessons can explain all social phenomena — that people, companies, and markets behave according to the abstract, two-dimensional illustrations of an Economics 101 textbook. Ideally, students should learn that the competitive market model is just that — a model, which by definition abstracts from the real world. According to the rhetoric of economics, however, the lessons of Economics 101 can be transplanted directly into the real world. The central idea that free markets generate the greatest possible economic well-being for society becomes a universal framework for understanding and answering any policy question.

Economism may not accurately describe reality, but its reduction of complex phenomena to simple concepts was a major asset in the battle of ideas. The political landscape of the United States after World War II was dominated by the shadow of the New Deal and the idea that the government could and should play a major role in managing the economy. Businesses that opposed intrusive regulations and wealthy individuals who feared higher taxes needed an intellectual counterweight to the New Deal, a conceptual framework that explained why an activist government was bad not just for their profits and their pocketbooks, but for society as a whole. Economism filled that need....

Economism aka Econ 101 is ideology, pure and simple, masquerading as science — because the math "proves" it.

As the mantra of free markets, small government, and lower taxes became more popular with voters, Democrats adapted by also paying homage to competitive markets. It was Bill Clinton who said, "The era of big government is over." And Barack Obama’s signature health-care-reform program is centered on the idea of using (regulated) market competition to expand access to health insurance.…

Economism is the reduction of social reality not just to Economics 101, but to just one Economics 101 lesson: the model of a competitive market driven by supply and demand.

If we were to redesign Economics 101, what would it look like? One possibility is to begin not with abstract models, but with the real world. How do companies use technology to produce goods, and how are those companies organized? How are products and services distributed, and how do manufacturers, intermediaries, and retailers set prices? How are wages determined — not in the theoretical model, but in real life? What factors determine the set of opportunities available to different people on different parts of the planet?...

Connecting the dots between Adam Smith and Donald Trump.

The Chronicle of Higher Eduation
What’s Wrong With Econ 101
James Kwak | Associate Professor of Law at the University of Connecticut School of Law

James Kwak — Kudlow and Economics in the Trump Administration

Title should be Larry Kudow and economism.

I prefer G. W. H. Bush's "voodoo economics."

It seems some people never learn.

Baseline Scenario
Kudlow and Economics in the Trump Administration

James Kwak | Associate Professor of Law at the University of Connecticut School of Law

ht Mark Thoma at Economist's View

See also

New Yorker
Ayn Rand And Corporate Tax Cuts Won’t Mend The Economy

John Cassidy

Noahpinion
The Fundamental Fallacy of Pop Economics

Noah Smith

James Kwak — The Root of All Our Problems?

A friend pointed me toward an op-ed in The Guardian by George Monbiot titled “Neoliberalism—The Ideology at the Root of All Our Problems.” The basic argument is that there is an ideology that has had a pervasive influence on the shaping of the contemporary world. Its policy program includes “massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services.” Monbiot calls this cocktail “neoliberalism” (more on the name later). 

There’s a lot in the article that I agree with. The political and economic takeover of the Western world by the super-wealthy was not accomplished by force, nor by rich people simply demanding a larger slice of the proverbial pie. Instead, it happened because many people—particularly in the media, the think tank intelligentsia, and the political community—internalized the idea that competitive markets provided the solution to all problems. (The idea that unfettered capital markets and financial innovation would be good for everyone, which helped produce the financial crisis, is only a special case of this larger phenomenon.)…

Baseline Scenario

The Root of All Our Problems?
James Kwak