How does neoclassical economics instill this level of cognitive dissonance in people? It’s probably the way things like information asymmetry and irrationality are presented as deviations from idealised conditions, rather than as being central to an understanding of the economy. This leads economists to see reality itself as a deviation from their perfect models, and hence dismiss results that conflict with their theories as anomalies.
So a question for defenders of economics: do people from other disciplines behave similarly? Would you be able to find a list of equally absurd statements from other sciences, social or otherwise? If the answer is no, surely it suggests that something is wrong with economics?
‘That’s OK in Practice, But Does it Work in Theory?’
Unlearning Economics
https://unlearningeconomics.wordpress.com/2012/01/10/thats-ok-in-practice-but-does-it-work-in-theory/
This is so often mentioned in the context of economics that it is a cliche. However, I thought a list of confused quotes from economists trying to explain how reality is wrong might be both amusing and instructive to the state of the discipline. Most of them speak for themselves, although I’ll offer some comment on the more confused/ing ones.
(1) A commenter on Chris Auld’s blog, on hearing that demand isn’t a ‘law’ because it goes up when stock prices go up:
(2) Preston McAfee and John McMillan, expressing incredulity when confronted with evidence from surveys that people behaved ‘irrationally’:
(3) Scott Sumner, defending the EMH:
Reality doesn’t exist! We don’t know anything! Anyway, where was I? Oh yeah, the EMH is correct.
(4) Scott Sumner, on hearing that MMT actually *gasp* looks at the real world:
(5) A commenter at Angry Bear, when presented with evidence that flat out contradicts the Laffer Curve:
Unfalsifiable. Gotcha.
(6) Ben Bernanke, discussing Irving Fisher’s ‘Debt-Deflation’ theory:
Of course, it’s not possible the banking system works completely differently to your theory.
(7) Eugene Fama, with the best defense of the EMH I have ever seen:
(8) And of course, the classic: Milton Friedman in his reality denying essay:
How does neoclassical economics instill this level of cognitive dissonance in people? It’s probably the way things like information asymmetry and irrationality are presented as deviations from idealised conditions, rather than as being central to an understanding of the economy. This leads economists to see reality itself as a deviation from their perfect models, and hence dismiss results that conflict with their theories as anomalies.
So a question for defenders of economics: do people from other disciplines behave similarly? Would you be able to find a list of equally absurd statements from other sciences, social or otherwise? If the answer is no, surely it suggests that something is wrong with economics?
Is the Economic Crisis a Crisis for Economics?
by Unlearning Economics
https://unlearningeconomics.files.wordpress.com/2014/09/crisiseconomics-1.pdf
Unlearning Economics
Pieria
http://www.pieria.co.uk/experts/Unlearning_Economics
I am an economics student in the UK who is interested in economics, history and socialism. I try to challenge conventional narratives and the way political issues are framed, particularly in the discipline of economics, which I think lends itself to a skewed perspective. As my profile picture suggests, I am a big fan of John Maynard Keynes and his followers and contemporaries, and broadly follow the economics of the post-Keynesian school. I am, however, also a socialist, so my policy recommendations come with an obligatory ‘and crush capitalism’ alongside them.
I remain pseudonymous for professional reasons, but you can email me at unlearningeconomics [at] gmail.com