Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World
by Jeff Madrick
Knopf, 254 pp., $26.95
The question of neo-classical economics eludes its critics, and in part eluded me in Last and First Men, because of the difficulty of impartial study: to learn the subject you have to study a form of mathematical modeling that is fallacious but not obviously so. And critics like Krugman are so steeped in the subject that their liberal veneer is not enough to really expose the subject.
In writing WHEE first edition I tried to cover the area and found the main zones of combat and some of the ‘jugular vein’ zones (e.g. the Arrow-Debreu canon) but the flood of material on world history nibbed the study in the bud. But I know enough mathematics to know that it is very problematical to speak of a science of economics. It seems like clever people with smarts have found a way to think they are scientists with a theory using calculus, but whose calculus is actually a sign of bad science, misapplied where it doesn’t belong. IN the process they have made economics very hard to critique. So a book such as this is to be welcomed, along with quite few others.
To be clear, someone like Krugman is so immersed in the problem that he seems caught up in the illusion. He is typical here: people who are super smart succumb to facilities of economic models, whose status is…? Here’s another good critique: http://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926
From the Intro to Last and First Men we have this:
The charge of ‘Utopia’ laid against communism now boomerangs in the wake of the extravagant claims for free markets. The tenets of neo-classical economics refer to abstract situations of no existence, ‘no place’. The parodist abuse of Lagrangian mechanics with utilitarian plugins is a mockery of science. Cf P. Smith, M. Max Neet, Economics Unmasked (Green Books, 2012)
Quiz for the neo-classical camp…
Let’s hear Krugman appraise the scientific status of the above!
This is surely the core of the kind of fallacy running economics: the Lagrangian applied to utility theory is surely complete baloney.