We interrupt this blog for a brief rant

I'm still going to do the bit about sex (and I know every tummy is aflutter with anticipation), but I thought I'd throw up this excerpt from a bit of correspondence I sent to an economics commentator -- one who I believe will be sympathetic to it.




Economists love to claim that they are the most "scientific" of the social sciences, that sociologists and anthropologists are all soft and mushy and value laden, while economics is hard science like physics or chemistry. The principle basis for this claim, as far as I can tell, is a fondness for using mathematics -- which, by the way, sociologists do at least as much, although economists don't seem to know that.

Unfortunately, garbage in, garbage out. The process of economics is:

1) State a number of postulates, every one of which happens to be false, i.e., never holds in reality.*

2) Build an elaborate theory based on said falsehoods, mentioning in passing that oh, by the way, we'll go back in deal with the fundamental falsity of the whole thing later.

3) Forget what you said about the falsity of the postulates and start believing in the theory as a description of reality. And so now you've managed to bamboozle yourself.

4) When the theory manifestly fails to predict or explain, add epicycles, or better yet, just ignore your errors and carry on as though nothing happened. Oh, and by the way, go from the purported "is" of your theory to a wholly unjustified "ought." Even if the theory were correct, it does not show that markets produce just or moral outcomes -- but economists like to pretend that it does just because, well, just because.

It doesn't matter how fancy your math is, if the entities being differentiated and integrated aren't real, you're just playing with yourself.

Economics, as currently practiced, uses a ptolemaic universe. You are still waiting for your Copernicus. In the meantime, the reason the ptolemaic worldview persists so stubbornly is because it is extremely useful as an apologia for inequality, privilege, and the rapaciousness of powerful interests. That's why corporations endow highly paid chairs in economics, that's why economists have the ear of presidents and members of congress, and make policy, and that's why the corporate media channel their nonsense.

You are now saying, in essence, that reporters ought to know that economists are full of crap and stop believing them. I agree with you but this is a fairly radical statement coming from someone with a Ph.D. in the subject. And as I say, I think it's asking a lot of reporters to recognize that such a deep seated, near consensus illusion is wrong.

*I'm sure I don't need to enumerate them for you, but you know what I mean. There is no such thing as a transaction with no externalities, no such thing as perfect information, no such thing as no transaction costs, no such thing as rational choice or utility maximization, no such thing as perfect competition, and markets always fail to produce essential collective goods. Econometrics either ignores an enormous percentage of costs or treats them as profits, the essentiality of legal regimes and regulation to determining who has bargaining power is largely ignored, and on and on. When pressed, economists deal with some of these fundamental failures by adding epicycles, but as I say, it would be far more scientific to recognize that the theory is wrong in the first place, and to start by studying reality instead of just making shit up. That way, you might eventually get to a theory that is actually, you know, useful.