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what's wrong with economics

So where are we at here and why?
It's actually fairly prosaic. The form we call "economics" i.e. the form which provides the intellectual framework for capitalism, is only one of many possible forms, and is more properly referred to as "neoclassical economics". It's only because it has reached the status of a paradigm that we fail to distinguish between it and other forms, or even recognise that other forms exist.

Its persistent inability to illuminate economic and social reality originate in its peculiar and arbitrary conceptions of the role of individualism, instrumentalism, and equilibration (which the Sonnenschein-Mantel-Debreu Theorem demonstrates are logically inconsistent, since the first two lead to a shapeless demand curve which the third prohibits), and an absolutely deranged theory of resource scarcity which is an embarrassment to anyone with even a passing understanding of physical sciences, and thermodynamics in particular.

It persists because it is what Lakatos characterises as a "degenerative research program" - one which expands its set of propositions about the world by defending them from falsification through the invention of other ("auxilliary") theories to explain why the core ones don't work. (Physical sciences proceed by refining core propositions which do not survive experimental falsification, expanding the range of phenomena usefully described and predicted). In this respect, neoclassical economics is indistinguishable from astrology, and the fact that Tory MP's now think astrology might form a useful adjunct to health policy is delicious for anyone familiar with Popper's Scientific Method.

How did we get here? Well, not long after exponential growth kicked in following the Second World War, they realised that a finite world could not contain it, and started mulling over steady state economic theories such as land tax. Capitalists, understanding correctly that exponential growth is a necessary condition of stability in a system that expels labour and sensing danger, put up an endowment for a school of economics that could lend plausible deniability to the theory of indefinite expansion. The Chicago School was born, and promptly invented neoclassical economics for its benefactors, which in turn gave rise to such howlers as:
The total mineral in the earth is an irrelevant non-binding constraint
- (Adelman, 1990 "Mineral depletion, with special reference to petroleum")
Finally,
That such [neoclassical economic] models prevailed, especially in America's graduate schools, despite evidence to the contrary, bears testimony to a triumph of ideology over science. Unfortunately, students of these graduate programmes now act as policy makers in many countries
- (Stiglitz 2002, Former Chief Economist, World Bank)

Steve Keen's "Debunking Economics" (2011) offers a devastating and highly readable critique of neoclassical economics' inanities.

[edited to link to the Tory MP story]
 
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It's actually fairly prosaic. The form we call "economics" i.e. the form which provides the intellectual framework for capitalism, is only one of many possible forms, and is more properly referred to as "neoclassical economics". It's only because it has reached the status of a paradigm that we fail to distinguish between it and other forms, or even recognise that other forms exist.

I would say that classical and keynesian economics also provide intellectual frameworks for capitalism. Neither are as raw as neo-classical stuff, nor do they tend to display quite the same level of blind idiocy, but they still exist to support, justify and - in policy outcome terms - further the existence of capitalism/the capitalism state.

Its persistent inability to illuminate economic and social reality originate in peculiar and arbitrary conceptions of the role of individualism, instrumentalism, and equilibration (which Sonnenschein-Mantel-Debreu Theorem demonstrates are logically inconsistent, since the first two lead to a shapeless demand curve which the third prohibits), and an absolutely deranged theory of resource scarcity which is an embarrassment to anyone with even a passing understanding of physical sciences.

It persists because it is what Lakatos characterises as a "degenerative research program" - one which expands its set of propositions about the world by defending them from falsification by the invention of other theories to explain why the core ones don't work. (Physical sciences proceed by refining core propositions which do not survive experimental falsification, expanding the range of phenomena usefully described and predicted). In this respect, neoclassical economics is indistinguishable from astrology, and the fact that Tory MP's now think astrology might form a useful adjunct to health policy is delicious for anyone familiar with Popper's Scientific Method.

How did we get here? Well, not long after exponential growth kicked in following the Second World War, they realised that a finite world could not contain it, and started mulling over steady state economic theories such as land tax. Capitalists, understanding correctly that exponential growth is a necessary condition of stability in a system that expels labour and sensing danger, put up an endowment for a school of economics that could lend plausible deniability to the theory of indefinite expansion. The Chicago School was born, and promptly invented neoclassical economics for its benefactors, which in turn gave rise to such howlers as:

Finally,

Which Tory MP likes astrology? I must have missed this :D I remember Jeremy Hunt (sec. state for health) thinks Homeopathy is cool tho.
 
Sorry, I added the link. It's a peach.

:D
Brilliant,that's brightened up my evening, thank you. I reckon if we were to quiz Mr Treddenick about economics he'd be all for the idea that we should base policy on the notion that people have perfect knowledge, and are perfectly rational. First being impossible, second being disproven here by himself.
 
How so? Obsolete to whom?

I think the "left/right" metaphor is obsolete as a useful way of conceiving the political "spectrum."

Indeed, its inculcation of the notion that politics is a spectrum (along which it is possible to hold "extreme" or "moderate" positions) is one of the problems with this metaphor.

Another is that it sows needless division among anti-capitalists.

And another is that it distracts attention from the fundamental issue, which is capitalism, so that it is possible for a pro-capitalist exponent of identity politics to be considered part of the Left.

I would suggest that instead of "left" or "right-wing," political positions would be more productively characterized as "pro-capitalist" or "anti-capitalist."
 
Thanks for posting that J Ed. I was unaware of this bit of cuntery on her part, although I'm familiar with a good bit. It took me a while to find something rational to say rather than posting a string of four letter words. I think I'll just say that there's nothing more savage than her "philosophy." She was lucky no one was nutty enough to accept her philosophy in her lifetime. Otherwise, she'd have been the recipient of policies designed to "starve the moochers" rather than living on the government dole in her later years.

The Ayn Rand comment is breathtaking in its stupidity.
 
I think the "left/right" metaphor is obsolete as a useful way of conceiving the political "spectrum."
Economics is fundamentally about the allocation of scarce resource. "Left" and "Right" are social constructs. A social construct is a legitimate basis for an economic theory when there is generally enough to go around and the problem is that of ensuring equity of allocation.

When there is not enough to go around (as is the case when, say, capitalist processes have created a position of overshoot in relation to the resource base) an alternative construct is required. Quite what that looks like is still a matter of some speculation, but it must have its roots in ecology and thermodynamics, in which the concepts of "left" and "right" are, as Fermi said, "not even wrong".
 
He's going to talk about the individualism strands on the right despite the fact that these inevitably and historically tie into economic streams that benefit the wealthy whitey
 
As I say, I don't think the terminology is apt, but lots of materialist "Leftists" dismiss religious critiques of capitalism on the grounds that they come from the "Right."

Is that your actual answer to the question you quoted?

I'm only asking because only the most absurd leftists would automatically call religious critiques of capitalism "rightist" surely?
 
I think the "left/right" metaphor is obsolete as a useful way of conceiving the political "spectrum."

Indeed, its inculcation of the notion that politics is a spectrum (along which it is possible to hold "extreme" or "moderate" positions) is one of the problems with this metaphor.

You've shifted the goalposts. You initially said that the terminology is obsolete because one has to distinguish between "authoritarian" and "economic" usages of "left" and "right". The fact that a term can be employed ambiguously is no barrier, especially not in political discussions. Apt examples of terms employed ambiguously and exhaustively would be "capitalism" and "socialism". As for the possibility of mapping political positions on a spectrum: I referred to concurrent validity earlier. One can demonstrate consistency in a person's responses to questions about similar issues, reliably assigning them to certain positions on a spectrum. Such tests can also be used to make falsifiable predictions about a person's behaviour.

Another is that it sows needless division among anti-capitalists.

And another is that it distracts attention from the fundamental issue, which is capitalism, so that it is possible for a pro-capitalist exponent of identity politics to be considered part of the Left.

I would suggest that instead of "left" or "right-wing," political positions would be more productively characterized as "pro-capitalist" or "anti-capitalist."

I think that this would be retrograde. Members of Front National have claimed to be "anticapitaliste". and Hitler, while never avowing economic egalitarianism, made frequent complaints about "Jewish stock-exchange capital" (in collaboration with Feder, notably before acceding to power). Distributionists claim that the cure to capitalism is expanding the amount of property owned by individuals. Hugo Chavez claimed to want to find an alternative to capitalism. Mao wrote in New Democracy that "The ideological and social system of capitalism has also become a museum piece in one part of the world (in the Soviet Union), while in other countries it resembles "a dying person who is sinking fast, like the sun setting beyond the western hills", and will soon be relegated to the museum"... Stalin wrote "We believe that the Anarchists are real enemies of Marxism. Accordingly, we also hold that a real struggle must be waged against real enemies". In which sense are the above a more coherent group than "the left"?

Economics is fundamentally about the allocation of scarce resource. "Left" and "Right" are social constructs. A social construct is a legitimate basis for an economic theory when there is generally enough to go around and the problem is that of ensuring equity of allocation.

When there is not enough to go around (as is the case when, say, capitalist processes have created a position of overshoot in relation to the resource base) an alternative construct is required. Quite what that looks like is still a matter of some speculation, but it must have its roots in ecology and thermodynamics, in which the concepts of "left" and "right" are, as Fermi said, "not even wrong".

The notion that the distribution of goods in a scarcity should be determined by natural processes is the basis of the Austrian school of economics: Menger addresses it in the second chapter of Principles of Economics, writing "men are communists whenever possible under existing natural conditions" and that economics determines our relations to goods under scarcity. The communist approach would be to construct a scale of need and distribute according to that measure.

As I say, I don't think the terminology is apt, but lots of materialist "Leftists" dismiss religious critiques of capitalism on the grounds that they come from the "Right."

May I see an example?
 
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As I say, I don't think the terminology is apt, but lots of materialist "Leftists" dismiss religious critiques of capitalism on the grounds that they come from the "Right."

Could you expand on this please, the religious critiques I know are considered left (Tawney / UK Christian Socialist tradition and liberation theology stuff, which I'm very hazy about).
 
For anyone interested in what could be right with economics, Herman Daly's article at steadystae.org is useful.

The insight, I think, is that conventional frameworks from which economic systems derive (e.g. Capitalism, Socialism, Marxism, etc.) fail to recognise the role of the biosphere in which the system is contained in limiting the scale of the economy. All use unconstrained growth to solve ideological problems (e.g. overwhelming material abundance as the enabler of a classless society) which a finite biosphere does not permit.

A viable economic system explicitly recognises that role and defines operations consistent with it to organise distribution and allocation:
Steady-state economics deals with three problems: sustainable scale, just distribution, and efficient allocation. It takes the first two issues, scale and distribution, away from the market. It calls for quantitative ecological limits on the throughput of resources so that the market can no longer determine the physical scale of the economy relative to the biosphere. It also advocates social limits to the range of income inequality, so that the market can no longer generate large inequalities of wealth. Subject to these two prior macro-level aggregate constraints, it then relies on the market to efficiently allocate resources. This is not advocacy of the Market with a capital M, the deified master evaluator and controller of life. This is market with a small m, a limited tool for rationing, communicating, and exchanging goods and services.
 
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