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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

about economists « Previous | |Next »
March 12, 2008

It's a low blow, but a witty one. What it does indicate is that the old cliche about economics being the dismal science is no longer the case. Economics is the language is public policy and there is a close connection between economics and politics.

The pro-market argument assumes that the goal of economic activity is basically democratic, i.e., to deliver to the public the goods and services it wants, not build pyramids for the Pharaoh. The market theorist would argue that the best indication of how strongly people really want something is how much they are willing to pay for it, and this is reflected in the market price.

economists.jpg Spooner

Economists celebrate the market as a device for regulating human interaction without acknowledging that their enthusiasm depends on a set of half-truths: that individuals are autonomous, self-interested, and rational calculators with unlimited wants and that the only community that matters is the nation-state.

Update
These foundational assumptions of economics justify a world in which individuals are isolated from one another and social connections are impoverished as people define themselves in terms of how much they can afford to consume.

| Posted by Gary Sauer-Thompson at 7:58 AM | | Comments (15)
Comments

Comments

Economics is the science of hindsight, of explaining why the last prediction was justifiably wrong. It's easy to stick with trends, the straight lines on graphs, but sharp corners, the peaks and troughs, are just too hard for most.

12 economists were asked for their forecasts concerning recent economic trends. They gave 13 answers. One changed his [sic] mind.

I think this cartoon explains Nicola Roxon's latest hair do.

Les,
How do you explain Brendon Nelson's hairdo?

Lyn,
God has a sense of humor

Les,
So do you apparently. Maybe Nelson does too. That could explain it.

Lyn,
Now that scientists have proven through dna mapping that first man was black then so must God be black too. So I am thinking that God has a greater sense of humor now. I mean, look at africa....that must be hilarious for him...or her

Les,
God is a hermaphrodite. He's a he when he does things like Africa and earthquakes, and a she when she does things like cute toddlers and baby harp seals. And nice shoes.

Gary,
market relationships erode community.

In the past, for example, when a farm family experienced a setback--say the barn burned down--neighbors pitched in. Now a farmer whose barn burns down turns, not to his neighbors, but to his insurance company. Insurance may be a more efficient way to organize resources than a community barn raising, but the deep social and human ties that are constitutive of community are weakened by the shift from reciprocity to market relations.

Kevin,
Another problem with the market is that it is weighted in favor of those who have more wealth to begin with. Thus the market directs production and develops efficiency in a way that is weighted for the benefit of those with more ability to pay.

The second difficulty is that the market is able to directly support only certain kinds of activity, namely activities that deliver a direct and obvious benefit to the buyer. There are a great many important and beneficial activities that don't fall in that category because their benefits are diffuse and/or long term.

Fred,
not Marxist economists.They accept Marx's argument that free market capitalism, as it was developing at that time---a black smokestack world---did not truly decentralize decision-making, but simply shifted it from an aristocratic to an industrial elite, and that the dynamics of capitalism were such that wealth (and power) tended to concentrate in the hands of fewer and fewer industrialists. In order to bring the full benefits of industrial economic progress to the great majority, he wanted to turn ownership of industry over to the workers and eliminate the market. The economic system would then need to be (at least initially) administered by the state.

Gary
Economics is dismal because it grapples with the problem of scarcity, which arises because, though our wants are infinite, the resources available to satisfy those wants are finite

Gary,
2 comments:
1. Old Midlands saying - "Where there's muck there's brass"
2. I don't know any marxist economists, do you?
{Although I do have a spare copy of Paul Baran's
"The Politics of the Economy of Growth" [a golden olden] for a promising nephew of mine. Got any modern suggestions?
Psst: I was hinting about the point you make when I posted the membership of the RBA Board.
And here's another point for free, Peter have you ever tried to actually test the hypothesis that our wants are infinite?

Fred,
there used to be a political economy crowd at Sydney University. However, you don't have to be a Marxist to accept the argument:

1. the dynamics of capitalism were such that wealth (and power) tended to concentrate in the hands of fewer and fewer industrialists (individuals in a post industrial economy).eg, Coles and Woolworths.

2.The economic system would then need to be (at least initially) administered by the state. The state is actively involved in supporting the free market--bailing out the hedge funds/banks from the credit crunch arising from the subprime mortgage crisis.


Economics might indeed be the dismal science, but attempting any Social Science without a grounding in economics is a waste of time.

The Political Economy group are still groaning on about the "current crisis in capitalism." However, they have - quite rightly - been removed from the Economics faculty. They continue to prophesise the revolution - poor little Cassandras that they are - from the Arts faculty.