Tag Archives: neoclassical theory

Neoclassical economics I: farcical global warming analyses

William Nordhaus in Stockholm

[Published 21 Sept at Pearls and Irritations.]

Analyses of the economic effects of global warming by prominent economists are based on patently invalid arguments, profound ignorance of the global response to solar energy and basic misrepresentation of scientific sources. Their conclusion that the effects are minor is egregiously in error and use of their analyses to advise governments has placed the world in peril.

Economist Steve Keen has published a critique (and summary) of analyses by William Nordhaus and others of the effects of global warming on the global economy. Those analyses, incorporated into official IPCC reports, suggest the effects of global warming are minor. Keen’s critique reveals the analyses to be absurdly deficient, reflecting not only profound ignorance but patently invalid arguments and a lack of scholarly integrity.

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Interview: Renegade Economists (3CR)

I attended the New Economy Network Australia conference in Melbourne recently (19-21 Oct). There I met in person Karl Fitzgerald who does a spot call Renegade Economists on radio 3CR , and with whom I’d done an interview a few years ago. We didn’t manage an interview at the conference, but did one by phone a couple of days later.

I found NENA to be a very diverse group very engaged with each other. They even listened to my pitch about The Little Green Economics Book and bought copies. There are so many people and groups doing good things, my impression is that NENA is likely to spread rapidly and link us into a more powerful movement. It was just their third annual conference.

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Reforming Economics: Pluralism is Not Enough

[This longish essay was just published at Real World Economics Review Blog.  It is addressed to the “heterodox” community, those diverse economists of various schools that are not the dominant neoclassical school, though otherwise it is not particularly technical.]

Much of the current discussion of reforming economics focusses on the need for pluralism, particularly in teaching curricula, and very recently again on RWER.  Pluralist teaching is seen as challenging, because heterodox economic ideas are diverse, have little coherence, and are to a significant extent mutually incompatible.

This theme crops up frequently in discussions on RWER.  Now Cameron Murray, in the first issue of Inside, published by the Institute for Dynamic Economic Analysis, proposes to identify over-arching themes that can bring out the relationships among the various approaches.  This is commendable but it will not, on its own, result in a reformed economics.

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Sydney Book Launch, Gleebooks, 4 May

Sack the Economists will be launched by Professor Steve Keen, author of Debunking Economics and winner of the Revere Award for his clear warnings of the approaching Global Financial Crisis.

RSVP Gleebooks  or phone 02 9660 2333
Sunday, 4th May 2014, 3:30 for 4 pm, Gleebooks, 49 Glebe Point Road, Glebe NSW.

The flier below can be downloaded here: LaunchAd&CoverGlee (pdf 300k), or as jpg from the image.  Please feel free to distribute it.

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A Science of Economies?

[This is a more technical post, addressed to those interested in re-making the field of economics into something relevant, informed and capable of self-improvement.]

Debates about whether economics is or can ever be a science appear frequently on the Real World Economics blog, such as making economics a relevant science.  Perhaps more in the subsequent comments than in the articles themselves, there are some recurring confusions and misconceptions, such as whether mathematics should be involved, about what the role of mathematics might be, about “prediction” as a necessary part of a science, about the role of assumptions and approximations, about whether any study involving people can ever be a science and, fundamentally, about what science really is.

I have commented in passing on this topic before, for example here, but in this comment I’d like to offer a more focussed discussion.

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Sack the Economists now available in hard copy

SackCoverPrint-on-demand hardcopies of Sack the Economists can now be ordered from CreateSpace and Amazon.com.

More sources of both ebook and hardcopy versions will be added soon, including the UK and Australia.

Also the ebook will be available in formats other than Kindle – so any reader will work.

Go to Sack the Economists for more information and all purchase options.

Markets should not be left to run themselves

There is no sound basis at all, in economic theory or in practice, for expecting free markets to be beneficial, or harmful for that matter.

We should manage the economy the way we manage life, and always be aware that the best-laid plans might go awry.

More in my article in The Age today.

“Sack the Economists” on RWER blog

An article on the Real World Economics Review blog:

Non-mainstream economists are all-too aware of the failure of mainstream economists to anticipate, let alone avoid, the Global Financial Crisis and the ensuing Great Recession.  The mainstream profession is also failing to fix the problem, and is actually making it worse.

It is hard to get alternative views heard, and the mainstream carries on almost totally unperturbed, despite being centrally responsible for a global disaster.  This is of course extremely frustrating.

After reading yet another cri de coeur from yet another frustrated economist, I thought perhaps we need to spell out the message in all bluntness

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Sack the Economists? On Steve Keen’s Debtwatch

Steve Keen has posted a guest post on his popular Debtwatch website.

Read­ers of this blog will have encoun­tered the idea that near-equilibrium neo­clas­si­cal eco­nomic the­ory is irrel­e­vant to dynamic, far-from-equilibrium, real mod­ern economies, and that the body of the­ory built around the neo­clas­si­cal assump­tions is full of incon­sis­ten­cies.  You will also be famil­iar with the idea that money and debt play cen­tral, dynamic roles in mod­ern economies.

Yet it can be argued there are other equally fun­da­men­tal flaws in the broader stream of the­ory and prac­tice that might be called main­stream eco­nom­ics.

– See more at: http://www.debtdeflation.com/blogs/2013/12/07/sack-the-economists/#sthash.oWYTzwRS.dpuf

Sack the Economists

… and disband their departments

The honourable Alan Greenspan testifies before...

The honourable Alan Greenspan testifies before the House Financial Services Committee. (Photo credit: Wikipedia)

[My silence for some time here has been mainly because I was focussed on re-packaging my economic ideas in a form that might gain more traction.  So, there is a new book manuscript of the above title.  It will help to promote it (to publishers) if I have readers’ reactions.  Therefore, if you will undertake to give me feedback, I will supply you with the draft MS (120 pages, 2.2 Mb pdf).  You don’t have to be expert, it’s for a general audience and so I want feedback from that audience.  Most helpful to me will be comments on its readability and interest.  Of course any discussion of its arguments are also welcome.]

Here is the first part of the introductory chapter.  I will post more in a few days.

Chapter 1.  Economists Don’t Know What They’re Talking About

In 1994 Paul Ormerod published a book called The Death of Economics1.  He argued economists don’t know what they’re talking about.  In 2001 Steve Keen published a book called Debunking Economics: the naked emperor of the social sciences2, with a second edition in 2011 subtitled The naked emperor dethroned?3.  Keen also argued economists don’t know what they’re talking about.

Neither of these books, nor quite a few others, has had the desired effect.  Mainstream economics has sailed serenely on its way, declaiming, advising, berating, sternly lecturing, deciding, teaching, pontificating.  Meanwhile half of Europe and many regions and groups in the United States are in depression, and fascism is making a comeback.  The last big depression spawned Hitler.  This one is promoting Golden Dawn in Greece and similar extremist movements elsewhere.  In the anglophone world a fundamentalist right-wing ideology is enforcing an increasingly narrow political correctness centred on “free” markets and the right of the rich to do and say whatever they like.  “Freedom”, but only for some and without responsibility.

Evidently Ormerod and Keen were too subtle.  It’s true their books also get a bit technical at times, especially Keen’s, but then they were addressing the profession, trying to bring it to its senses, to reform it from the inside.  That seems to have been their other mistake.  They produced example after example of how mainstream ideas fail, but still they had no effect.  I think the message was addressed to the wrong audience, and was just too subtle.  Economics is naked and dead, but never mind the stink, just prop up the corpse and carry on.

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