Ptolemaic Economics

If you happen to take Economics 101 (apparently the preznit's favorite course, he talks about it all the time), the pedagogical procedure goes like this. The instructor will present a list of assumptions about how markets work, then he (or maybe 5% of the time she) will go on to spin elaborate theories based on these assumptions. These edifices of logic will prove that "free markets" allocate resources efficiently, produce the greatest possible "utility," maximize welfare, etc.

But then along come various pests from the looney left who point out that the assumptions are contrary to reality. Rather than set out to build a new theory based on truth, economists add epicycles to their theories -- theoretical superstructures to try to make predictions of the theory to resemble observable reality. They never quite succeed so they add epicycles to the epicycles.

Maybe they should give up and admit that the entire edifice of modern economics is no different from Ptolemaic astronomy. It is a false description of the world. The planets do not go around the earth, and the costs and benefits of market activity are not captured in the transactions between the parties. The heavenly bodies are not embedded in crystal spheres, and information is never perfect but limited and usually unequal. The stars are not fixed in a firmament and sellers and buyers are frequently not willing but compelled. The planets are not immaculate shining spheres but cratered balls of rock or swirling gases that shine by the reflected light of the sun. There is usually not equal market power between sellers and buyers but rather enormous asymmetry. Providers, not consumers, generate a substantial portion of demand. Labor is not merely a commodity sold by the worker, but is intrinsic to the worker's social position and enjoyment of life. And so on.

Economics is a vast edifice of bullshit erected on a foundation of sand. It isn't a science at all, even though the economists decided to start giving themselves a phony Nobel Prize to try to convince the world otherwise. It is the most ideological, most tendentious, and least scientific of the disciplines of social inquiry. It's time for the Copernicus of economics to emerge. Let's start over.