A thorough critique of the absurdity of neoclassical economics.
Main points:
1° methodology: neoclassical economics is based on the dogma of free markets and rational human beings. Nothing solid can be built on such false foundations.
A thorough critique of the absurdity of neoclassical economics.
Main points:
1° methodology: neoclassical economics is based on the dogma of free markets and rational human beings. Nothing solid can be built on such false foundations.
2° Needs and means: by evacuating the question of what is good and necessary towards morality and ethics, economics prevents itself from understanding human beings. In economics, what we want is good, full stop.
3° Growth: The sole aim of economics should be to abolish poverty and satisfy human needs. By redefining desires as needs, growth becomes a dogma whose usefulness cannot be questioned.
4° Equilibrium: Neoclassical economics postulates that equilibrium is the natural state of the market. This is totally contrary to experience and completely absurd.
5° Models and laws: economists rely on closed models. Their main tool is _ceteris paribus_, all other things being equal, which unfortunately never happens in reality...
6° economic psychology: homo economicus. Need we say more? Behavioural economists and the heirs of Kahneman raise the question of the irrationality of human beings. But in reality, since human beings always have to make decisions in the face of uncertainty and ignorance, are their choices really irrational?
7° Sociology and economics: sociology clearly highlights the importance of groups, and the ability of groups to act in a coordinated way. This does not exist in economics. Polanyi explains the problem.
8° Institutional economics: economics denies the identification of individuals with organisations.
9° Economics and power: neoclassical economics avoids the question of power by always assuming that relationships are non-coercive, ignoring the political aspects which are essential. By deliberately ignoring power games, economists support the structures in place.
10° Why study the history of economic thought? Because economic theories are not built up cumulatively like the exact sciences.
11° Economic history: economic theories are rooted in their time.
12° Ethics and economics: economists have rejected the ethical issues that were central to the thinking of Adam Smith and John Stuart Mill. In so doing, while denying it, they have turned neoclassical economics into a system that is both supposedly descriptive (in fact, not really) and prescriptive (while denying it).
13° abandoning omniscience
14° the future of economics: the political ends of economics
*What's wrong with economics?*, Robert Skidelsky
A thorough critique of the absurdity of neoclassical economics.
Main points:
1° methodology: neoclassical economics is based on the dogma of free markets and rational human beings. Nothing solid can be built on such false foundations.
2° Needs and means: by evacuating the question of what is good and necessary towards morality and ethics, economics prevents itself from understanding human beings. In economics, what we want is good, full stop.
3° Growth: The sole aim of economics should be to abolish poverty and satisfy human needs. By redefining desires as needs, growth becomes a dogma whose usefulness cannot be questioned.
4° Equilibrium: Neoclassical economics postulates that equilibrium is the natural state of the market. This is totally contrary to experience and completely absurd.
5° Models and laws: economists rely on closed models. Their main tool is _ceteris paribus_, all other things being equal, which unfortunately never happens in reality...
6° economic psychology: homo economicus. Need we say more? Behavioural economists and the heirs of Kahneman raise the question of the irrationality of human beings. But in reality, since human beings always have to make decisions in the face of uncertainty and ignorance, are their choices really irrational?
7° Sociology and economics: sociology clearly highlights the importance of groups, and the ability of groups to act in a coordinated way. This does not exist in economics. Polanyi explains the problem.
8° Institutional economics: economics denies the identification of individuals with organisations.
9° Economics and power: neoclassical economics avoids the question of power by always assuming that relationships are non-coercive, ignoring the political aspects which are essential. By deliberately ignoring power games, economists support the structures in place.
10° Why study the history of economic thought? Because economic theories are not built up cumulatively like the exact sciences.
11° Economic history: economic theories are rooted in their time.
12° Ethics and economics: economists have rejected the ethical issues that were central to the thinking of Adam Smith and John Stuart Mill. In so doing, while denying it, they have turned neoclassical economics into a system that is both supposedly descriptive (in fact, not really) and prescriptive (while denying it).
13° abandoning omniscience
14° the future of economics: the political ends of economics