Mankiw’s Ten Principles of Economics Part 11: Conclusions

The introduction to this series is here.
Part 1 is here.
Part 2 is here.
Part 3 is here.
Part 4 is here.
Part 5 is here.
Part 6 is here.
Part 7 is here.
Part 8 is here.
Part 9 is here.
Part 10 is here.

This series is an outgrowth of a series of short essays [links here] on Thomas Kuhn’s The Structure of Scientific Change. Economists desperately want people to think they are scientists, so much so that they will put on lab coats as in this delightful story.

Donning customized white lab coats, University of Delaware officials cut the ribbon on the new Center for Experimental and Applied Economics at UD’s College of Agriculture and Natural Resources last week.

“Our experiments pay people cash to analyze their decisions,” said Kent Messer, a professor … .

Chapter 2 of Mankiw’s introductory textbook has a section titled “The Economist as Scientist”. He claims that just like physical scientists, economists “… devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.” P. 22. Based on this section, I thought he was saying that the 10 principles I’ve discussed in this series were in the nature of scientific principles. I suggested that with the addition of methodological ideas and some basic assumptions about the goals of a society, they could be treated as a paradigm in the sense Kuhn describes.

The goals of this series were: 1. to examine that possibility; 2. to see if these principles served as a structure for neoliberal economic theory, and 3. to see if there were other ways of looking at these principles that would be enlightening.

The first goal seemed perfectly reasonable. According to Kuhn, you don’t write a physical science textbook unless the community of scientists who study that area agree on a paradigm of the discipline. But my brief looks at these principles makes me think that they are either vacuously true, reductive to the point of absurdity, or hotly contested by other economists. I think I have shown that these principles do not operate as a statement of agreed-upon ideas about the way the economy works. They barely describe individual activity in any useful way.

Consider Principle 4, People Respond to Incentives. Of course they do sometimes, and sometimes not. And sometimes they respond in wildly disparate but perfectly reasonable ways. You see a car advertisement offering a price break for buying right now. Does Principle 4 help you understand how I might respond? Here’s a harder example. Interest rates go up. That creates an incentive to do what? Buy a house before rates go up further? Wait to see if higher interest rates cool off the housing market so houses are cheaper, so maybe even with higher interest rates your mortgage payment will be lower? Consume less and save more money? Wait for the stock market to go down and buy stocks? What conclusions can be drawn from this principle? How is it useful? Any time you might want to apply it, you have to look at the specifics of the situation, including the people who are supposedly going to respond to the incentives. Also, lacking data, there is a strong tendency to assume other people think like you do.

The function of the paradigm for Kuhn is to provide a platform for further research in what he calls normal science. There is an economics example in Part 10, the effort to figure out the relation between inflation and employment. People like Laurence Ball and Sandeep Mazumder of the International Fund, whose work I quote, can make a living working on ways to find an historical relationship, regardless of whether it says anything about the future. But surely if the relationship cannot actually be specified usefully after years of effort, it isn’t a real principle, and it doesn’t form the basis for a sensible research program. Morgenerally, Mankiw admits that in this blog post that there is much about macroeconomics that people don’t know.

Kuhn says that there is a difference between physics and chemistry textbooks and social sciences textbooks.

In history, philosophy, and the social sciences … the elementary college course employs parallel readings in original sources, some of them the “classics” of the field, others the contemporary research reports that practitioners write for each other. As a result, the student in any one of these disciplines is constantly made aware of the immense variety of problems that the members of his future group have, in the course of time, attempted to solve. Even more important, he has constantly before him a number of competing and incommensurable solutions to these problems, solutions that he must ultimately evaluate for himself. P 164

That does not describe Mankiw’s textbook which reads just like the physics and chemistry textbooks Kuhn describes. There are summary remarks about historical figures in the field, and the discipline is presented as a cumulative result of a steady progress of understanding. There is no question about the truth content of a single statement in Mankiw’s text, no hint that respectable economists reject his conclusions. Any student who only takes intro to economics using Mankiw’s textbook will never learn about the massive differences among schools of economics, will never learn that there are alternatives to the monetarist/neoliberal views implicit in the book, and will never have a way to examine economic policy problems from any perspective other than Mankiw’s.

That is what makes this textbook approach so dangerous. Mankiw presents a finished survey of the field, with the imprimatur of authority, when there is no consensus. It’s a fair reading of this book to call Introduction to Neoliberal Economics. It’s not fair to call it a balanced presentation of a discipline shot through with contested assertions.

I think I’ve shown that the discipline of economics has not reached the stage at which it is possible to create universal principles. That is a waste of time, and I will not spend any more time thinking about it. But it isn’t just that there aren’t any universal principles. As Kuhn would point out, with so many schools of economics there is no platform from which to evaluate any principle. The various schools conflict with each other on every possible level, and there is no way to test any theory that will satisfy the proponents of the exact opposite theory.

The worst part is that the rich have a death grip on economic policy. They choose to support policies that benefit them at the expense of the rest of us, and they hide behind a veneer of economics professionals who say the things that they want to hear. Those people teach economics using textbooks like Mankiw’s and that of Samuelson and Nordhaus. They control policy, because they have taught the leaders of today.

This and the preceding series have been really depressing to me. There is a tiny ray of hope. Bernie Sanders is the ranking minority member of the Senate Budget Committee. He appointed Stephanie Kelton as Chief Economist. She is the brilliant economist who chaired the Economics Department at the University of Missouri-Kansas City, and she is a noted scholar in the field of modern money theory. That is a completely different way forward, and one that works for progressives and frightens conservatives. That’s got to be a good thing.

Notre Dame undergrad (math); JD, Indiana University at Bloomington; 1st Lieutenant, US Army.; private practice in corporate and securities law; Assistant AG in Tennessee for consumer protection and securities; Blue Sky Securities Commissioner, Tennessee; private practice, bankruptcy and corporate law.

I have had a lifelong interest in economics. For most of my career, that interest was practical, focused on the problems in front of me. Lately I have been more interested in economics as a theory, especially its impact on the lives of people like those I met in my bankruptcy practice, and on the politics of money in the US. I also enjoy reading philosophers, starting in college and steadily expanding my reading ever since. I wrote at FireDogLake for a number of years.

Generally, I think the problem facing the US is the dominance of neoliberal discourse. I think it clouds the vision, and limits the kinds of problems that can be identified and solved. For example, the existence and danger of climate change can easily be identified in a scientific discussion. However, the problem does not fit the neoliberal discourse because science insists that the pursuit of individual and corporate self-interest will lead to devastation. In neoliberal discourse, the pursuit of self-interest always leads to Eden.

The neoliberal project has two prongs. One is the police function of crushing dissent and alternative views. The police function is provided by government agencies and private and institutional actors. The counterpart is the economic system , which is operated by government and by private and institutional actors. Some of these actors operate in both spheres. I focus on the second prong.

26 replies
  1. Alan says:

    I enjoyed the series. Thank you.
    *
    My concluding 2 cents: Economists’ claims to be a natural science akin to physics are ludicrous but their preeminent position within a network of powerful relationships allows them to thumb their noses at the other social sciences, history, philosophy and their critics. Unlike the natural sciences, the social relationships that make the discipline of economics possible are internal to its object of study. The discipline’s lack of self-awareness of the grounds of its own knowledge claims and the basis of its influence, make it a true abnormal science. But while we can laugh at the antics of the court jester, he pleases the king and has the king’s favor so he cares not what we think.

  2. Jonf says:

    “Our experiments pay people cash to analyze their decisions,” said Kent Messer, a professor … .
    Did he really say that? What a guy!

  3. russ ward says:

    Please, please make no further references to kuhn –
    his work is not only far too dated but has been
    rejected as useless by the philosophy of science
    community for many years – see the book by imre lakatos
    to see why – even back in the 70s, kuhn was roundly
    criticized – there were even conferences about
    “why kuhn was wrong” – suggest you rewrite your
    article and leave off the kuhn parts as kuhn is
    negative side to your otherwise fine ideas

    • orionATL says:

      i’m not sure what your objection is specifically or how it might negate using kuhn’s work in “the structure…” heuristically. you need to provide specific examples.

      if you are referring to the long debate among philosophers which kuhn’s work inspired, the assertions and conclusions from that debate may be of value to philosophy. they may not necessarily be valuable re a critique of a particular ideologically oriented branch of economics. again, you need to provide specific examples if you want to validate your vague warning in #3.

    • Ed Walker says:

      You raise an issue I discuss very briefly in my linked series on Kuhn. For those not familiar with these issues, here’s a link the first of several accessible posts disussing Kuhn, Lakatos, and several other several theorists in the field of science and technology studies. The first and second describe some of the problems raised by this comment. https://coraifeartaigh.wordpress.com/2011/02/01/was-kuhn-more-wrong-than-right/
      .
      Kuhn was in the background of my undergrad math and science classes; we read a summary and commentary. I saw possible issues when I reread it for this series, and checked out some of the current commentary. That means I didn’t take Kuhn at face value, but focused on the parts that seem stable to me. For example, his description of my college science books is spot on. Most of my history and philosophy class books and the psych class I took while in law school met his description as well. It is only economics among the social sciences that tries to present itself as the present cumulation of knowledge in the face of wide disagreements.
      .
      I don’t plan on turning this into a long discussion of the philosophy of science. Most readers here are generally familiar with Kuhn, and have a rough idea of the nature of progress in the natural sciences. As I note, Mankiw claims that mantel, and this is part of a general effort to undermine that claim.

  4. Alan says:

    I disagree. It may have been rejected by the “philosophy of science community”, although I think that’s a bit of a stretch, maybe a branch within the philosophy of science. There were conferences about “why Kuhn was wrong” because certain philosophers felt threatened. That aside, I would argue that there is certainly plenty that is muddled and wrong in Structure but there are kernels that were enormously fruitful and opened up new and interesting lines of enquiry. Kuhn had, for example, an enormous influence on the sociology of scientific knowledge — although he rejected much of what the sociologists subsequently did with his work. The Wittgensteinian aspect to Structure that drew out the the importance of communities of practice, tacit knowledge, etc. was enormously important.  And one can’t ignore the parallels to Foucault’s writings about epistemes (The Order of Things) and the abnormal sciences during the 1960s.

  5. Jonf says:

    I give you John M Keynes and the body of thought in MMT. I can only pray that Bernie listens to Professor Kelton. I fear, however, that his chances of winning or even impacting the practice of economics is slim.

    That said, thanks for your work on this series.

  6. Alan says:

    I think it’s worth closing the loop between philosophy of science and economics. Karl Popper was at LSE with Hayek. They had other obvious things in common. Popper was an early member of the Mont Pelerin Society and was also an influence on Milton Friedman. You can read about the relationships and the differences between them in Masters of the Universe and other recent histories of neoliberalism. My impression is that Popper was not entirely taken with Hayek’s project, sensing Hayek’s authoritarianism and that it was at odds with his own philosophy.

      • Alan says:

        In Burgin’s The Great Persuasion there’s also discussion of exchanges between Hayek and Popper in which Popper appears at odds with Hayek over MPS membership. Popper appeared to be in favor of a more open membership and broader debate.
        *
        I think some of the reaction to Kuhn has to be seen in historical context. People like Popper, Lakatos, Hayek were in fear of totalitarianism and were coming up with assorted bulwarks against its spread. Then you have Kuhn, coming from a quite different background, talking about scientific communities, normal science, etc. The horror of it all. Of course, I think the real irony here is that Hayek attacks socialism by drawing on arguments taken from Carl Schmitt, who was vehemently anti-liberal, and then ends up being best pals with Pinochet. Neoliberalism isn’t a form of liberalism. It has much more in common with authoritarianism.

        • orionATL says:

          thanks again.

          we sometimes forget the influence our historical context has on us, even our scientists :).
          this states the crux of the matter:

          “…People like Popper, Lakatos, Hayek were in fear of totalitarianism and were coming up with assorted bulwarks against its spread. …”.

          ironically, what originated as a reaction to marx’s thinking and its grotesque operationalization in stalin’s russia has come in a later time, at least in the case of von hayek, to be very persuasive ideology for the wealthy and their courtiers to employ in political wars over the role of government in markets (thus helping to keep the peasantry (or the bourgoisie) at bay).

          • Alan says:

            Which is completely at odds with the argument in Smith’s Wealth of Nations. Neoliberalism has many of the characteristics of the mercantilist thinking Smith was attacking in Wealth.

  7. orionATL says:

    i’m not sure whether or not the conclusion in this series is that economics is not a science. if that is the concusion i think it is wrong. if the concusion is rather that it is that branch of economics called neo-liberal economics that is not scientific i think that may be only partially right.

    with respect to neo-liberal economics, both hayek and friedman were exceptionally well-trained and intellectually capable. both did economic work that i think it is fare to call at least quite competent. i suspect the problem with their work, for those who believe there is a problem, lies in the use and exploitation of their work, not necessarily in the scientific rigor of that work. both men strike me as ideologues, not just individuals with a belief system, but individuals with a pernicious belief system focusing abnormally on one issue, for them “freedom”.

    with respect to the larger issue of whether economics is a science in the same way as, e.g, psychology, i think it certainly is. (though in time microeconomics may become a branch of psychology). sociology, archaeology, anthropology, political science, economics, and psychology are generally accepted as the “social sciences” – feel free to add your favorite other. i doubt any of these reach the standard of the physical sciences in terms of theories or laws. they do reach that standard in their intent and effort at similar rigor in collecting and analyzing data.

    the distinctive characteristic of these sciences is that they study human behavior – a rather tricky field because humans can change their behavior on new information.

    a bit more leniency with respect to what is and isn’t “science” would be appropriate here. in my view science is as well or better defined by the openness to outside examination of its data collection and analysis and to new approaches to thery construction and analysis than by its discovery of laws alone.

    in this way science births the opposite of ideologically bound data collection and analysis and theory construction:
    http://www.theguardian.com/commentisfree/2013/apr/18/rogoff-reinhart-deficit-research-false

    • P J Evans says:

      I’d argue for not a science because it isn’t good for even halfway-accurate predictions of future events, and no good way to do experiments that are useful and repeatable. (I’d argue that psychology fails on the same grounds.)

      • orionATL says:

        you’d be right under your definition emphasizing laws.

        i take a different view – that science is human social organization whose avowed purpose is 1) to collect, analyze, and report data with extreme care for its accuracy, and 2) to speculate, e.g., theorize, construct laws, etc., with extreme concern for the speculation’s correspondence with reality and for the intellectual integrity of the speculation process.

        put differently, science is a human invention to beat our innate animal tendencies to lie, cheat, and seek personal advantage :)) **

        most scientists don’t get the opportunity to make up rules or laws. they collect, analyze, and report data in the context of some theory or another they believe holds true – or which their funding agency believes holds true :)

        see: cancer resesrch, u.s. 1973 to 2015. :)

        the problems the sciences of psychology and economics encounter are these:

        http://www.nature.com/news/replication-studies-bad-copy-1.10634

        -http://www.theguardian.com/commentisfree/2013/apr/18/rogoff-reinhart-deficit-research-false

        ** the endevor we call science can be said to be the diametric opposite of the endevor we term classification of american national security data.

        • orionATL says:

          continuing on the harm ideology in science and economics can do:

          http://krugman.blogs.nytimes.com/2013/05/26/reinhart-and-rogoff-are-not-happy/?_r=0

          http://delong.typepad.com/sdj/2013/05/accurate-and-inaccurate-ways-of-portraying-the-debt-and-growth-association.html

          [ … Johnny Isakson, a Republican from Georgia and always a gentleman, stood up to ask his question: “Do we need to act this year? Is it better to act quickly?”

          “Absolutely,” Rogoff said. “Not acting moves the risk closer,” he explained, because every year of not acting adds another year of debt accumulation. “You have very few levers at this point,” he warned us.

          Reinhart echoed Conrad’s point and explained that countries rarely pass the 90 percent debt-to-GDP tipping point precisely because it is dangerous to let that much debt accumulate. She said, “If it is not risky to hit the 90 percent threshold, we would expect a higher incidence.”
          Tim Fernholz’s Reinhart-Rogoff quotes:

          How influential was the Rogoff-Reinhart study warning that high debt kills growth?:

          “[I]t is widely acknowledged, based on serious research, that when public debt levels rise about 90% they tend to have a negative economic dynamism, which translates into low growth for many years.” — European Commissioner Olli Rehn.

          “Economists who have studied sovereign debt tell us that letting total debt rise above 90 percent of GDP creates a drag on economic growth and intensifies the risk of a debt-fueled economic crisis.” — House Budget Committee Chairman and former Republican vice-presidential candidate Paul Ryan.

          “It’s an excellent study, although in some ways what you’ve summarized understates the risks.”— Former US Treasury Secretary Tim Geithner.

          “[W]e would soon get to a situation in which a debt-to-GDP ratio would be 100%. As economists such as Reinhart and Rogoff have argued, that is the level at which the overall stock of debt becomes dangerous for the long-term growth of an economy. They would argue that that is why Japan has had such a bad time for such a long period. If deficits really solved long-term economic growth, Japan would not have been stranded in the situation in which it has been for such a long time.” Lord Lamont of Lerwick, former UK chancellor and sometime adviser to current chancellor George Osborne.

          “The debt hurts the economy already. The canonical work of Carmen Reinhart and Kenneth Rogoff and its successors carry a clear message: countries that have gross government debt in excess of 90% of Gross Domestic Product (GDP) are in the debt danger zone. Entering the zone means slower economic growth.”— Doug Holtz-Eakin, Chairman of the American Action Forum.
          J. Bradford DeLong on May 26, 2013 at 08:14 AM | Permalink. … ]

          http://www.theguardian.com/commentisfree/2013/apr/16/unemployment-reinhart-rogoff-arithmetic-cause

          http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html

          unhappy with the criticism from others, the two scientists took to calling paul krugman “uncivil”. in my observation, this is the academic equivalent of a shooting :). had he been on their faculty, they likely would have had krugman up on charges of being “uncollegial”. here is carmen rogoff’s prissy response to her old, has-been colleague (who lucked into a nobel award):

          http://www.carmenreinhart.com/letter-to-pk/

          in summary –

          http://www.huffingtonpost.com/2013/05/26/carmen-reinhart-kenneth-rogoff-krugman_n_3339604.html

          • Ed Walker says:

            For some reason this comment wound up in moderation, sorry about that.
            .
            To answer your earlier question, the point I want to make is that economics is a science in the same way psychology and sociology are sciences. They study human behavior, and until the computers take over, there isn’t going to be a universal set of principles. That means we can’t have textbooks in economics that look like chemistry textbooks. We need textbooks that contain a wide variety of readings, not just those which support one school or another. There is a wide movement in Europe and to a lesser extent here among students demanding that teaching change to this form rather than the didactic, we know this, school of Mankiw, and Samuelson and Nordhaus. One of the leaders in this form of teaching is Piketty.

            • orionATL says:

              that is a reasonable viewpoint.

              i want to emphasize the great value and the critical importance to our species of “scientific method” re data collection, analysis, and theory construction. science is a large-scale, very long term social process whose great strength is its openess to all to examine, reexamine, reproduce or fail to reproduce, quarrel over, talk over, get insights, publish critiques, make corrections, then more insights. there really is no aspect of the natural world or of human behavior that will not yield valuable insights using this approach to understanding and solving problems. that certainly includes the phenomea we label “economics” .

              most scientists will never publish a major theory in their entire life. they spend their days collecting data, analyzing it, writing it up, explaining, debating, improving or trashing their conclusions, and moving on to new areas of exploration (and looking for funding :) ). they are still scientists, and what they do is still called science.

              a major challenge is to recognize ideologically-based science for what it is and hold it seperate from legitimate science in its field, whether it’s the science that seriousy threatened galileo and kiled g. bruno, that which rewarded t. lysenko, or that which has enriched a number of the neo-liberal marketeers.

  8. Jonf says:

    I am having some trouble thinking of macroeconomics as a science, especially in view of many of the so called axiomatic principles. For example, all the nonsense about the federal governemt about to go bankrupt. Since the government is the monopoly issuer of the currency, it can always pay any debt at any time (subject, of course, to our congress agreeing).
    .
    This does not mean government can spend whatever it wants. At full capacity or full employment more spending could lead to inflation. I doubt we have any danger of that or have had any for some long time. ( specific industries aside, like bomb making capacity)
    .
    What our fiat currency does do is ensure that we need never face unemployment. Keynes noted and MMT supports the idea that the government can spend its way to full employment. And we can ensure stability of the currency.
    .
    The constraint we face is always real resources. When there is not enough oil in the ground or hospitals to treat people or no bridges to get us there, we have a problem. But for some of this, we can literally buy it. Science or simply logic?

  9. orionATL says:

    a very nice discussion, set in a specific context, of the difficulty of being a rational actor in the free markets fantasy:

    http://horacemannleague.blogspot.com/2013/01/asymmetric-information-parental-choice.html .

    cited by a commenter (klondike jack @9:31 am) at the weblog mathbabe:

    http://mathbabe.org/2015/09/07/big-data-disparate-impact-and-the-neoliberal-mindset/ .

    picked up initially by me from:

    http://delong.typepad.com/ .

    the mathbabe post is nicely provocative too, but a bit short.

    • orionATL says:

      from the mathbabe post cited @ 20:

      […Here’s my theory as to why it’s so hard for people to understand. They have been taken over in these matters by a neoliberal thought process, whereby every person is told to behave rationally, as an individual, and to seek maximum profit. It’s like an invisible hand on a miniature scale, acting everywhere and at all times.

      Since this ideology has us acting as individuals, and ignoring group dynamics, the disparate impact argument is difficult if not impossible to understand. Why would anyone want to loan money to a poor person? That wouldn’t make economic sense. Or, more relevantly, why would anyone not distinguish between a poor person and a rich person before making a loan? That’s the absolute heart of how the big data movement operates. Changing that would be like throwing away money.

      Since every interaction boils down to game theory and strategies for winning, “fairness” doesn’t come into the equation (note, the more equations the better!) of an individual’s striving for more opportunity and more money. Fairness isn’t even definable unless you give context, and context is exactly what this mindset ignores. …]

      • orionATL says:

        ironically, the question of who would want to loan money to a poor person figures very, very prominent in the bank collapses of 2006-08, but not in the way mathbabe discusses. the issue of fraudulent banker behavior with respect to subprime loans and collateralized debt obligations involving poor people was perfectly rational if getting rich on fraud with a quod me vexit attitude was your banking game.

    • orionATL says:

      milton and rosa friedman left money to support the charter school movement. rosa was a very competent statistician and definitely her husband’s helpmate.

    • Alan says:

      I found the Kern Alexander’s bit amusing (horacemann link) . Funny how they are turning to ‘behavioral economics’ to try and re-introduce context, culture, social relations etc. back into economics, that is to say, all the stuff excluded by the reduction of humans to rational economic calculating machines. One could just go read some anthropology for a true fix–they do it so much better.
      *
      And apparently Adam Smith shared “prevailing economic assumptions” (presumably he means “efficient markets”) with Friedman, Hayek, Samuelson, etc. But one can hardly blame Alexander as he gets this from Stiglitz. Here’s an example but they are easy to find:

      Adam Smith, 200 years ago, put forward the idea of the invisible hand, that the market automatically takes care of things, [that] the market is self-regulating. In the last 30 years we’ve recognized that the assumptions required for that conclusion to be true are just not satisfied in more-developed countries let alone less-developed countries. The work that I did, for which I got the Nobel Prize, focused on the problems associated with imperfections of information and particularly asymmetries of information. We recognize that these imperfections of information, asymmetries of information, are pervasive in every economy, but especially in developing economies, where the market for information doesn’t work as well. And the essential result of this research of the last 30 years is to show that Adam Smith’s invisible hand is not true, [that] whenever there are these imperfections of information and these other market failures, that markets very frequently fail, and fail massively.

      Ah, Joe, so you won a Nobel Prize discovering something Adam Smith knew in 1776 but you think he didn’t know it because no one in your ahistorical disciple seems to bother much with what he actually wrote.  What do you think Smith is talking about in, for example,  I.11.264 and IV.1.10 if not asymmetries of information and how one one group uses these asymmetries to their own private advantage against the public interest? So is it the case that you never bothered to read Wealth or are you just being disingenuous to inflate the significance of your own work?

      • orionATL says:

        yeah, the behavioral econ stuff seemed so strange in this context. i would have thought that approach was antithetical.

        • Alan says:

          Philip Mirowski: The Seekers, or How Mainstream Economists Have Defended Their Discipline Since 2008

          Embedded in this critique is a smaller but no less substantial critique of behavioural economics. In this regard Mirowski points to popular exponents of the behavioural tradition like Robert Schiller. As Mirowksi clearly shows, behavioural economics is but another shallow, but superficially appealing defence of orthodoxy. It fundamentally alters nothing because its concepts of ‘rationality’ and ‘irrationality’ are largely ad hoc. This is important because anyone who has ever critiqued economists’ conception of ‘rationality’ is often met with apologists saying that the mainstream has now moved into the behavioural sphere and are thus becoming more scientific. This is nonsense of the highest order. Again, Mirowski puts it eloquently: “Two decades of behavioral research certainly has not resulted in any consensus systematic revisions of microeconomics, much less macroeconomics. Beyond wishful thinking, why should one even think that the appropriate way to approach a macroeconomic crisis was through some arbitrary set of folk psychological mental categories?”

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