The march of progress in my lifetime has been astonishing. The fact that I and almost everyone else can walk around with an incredibly fast and compact computer that can access most of human knowledge in my pocket was beyond our imagination even as late as the 80s when I was born.
We have seen incredible advancements in all the hard sciences. I can appreciate this mostly in my own field, computer science, with which I am most familiar. But there is one field where we have not advanced. Worse still, we have regressed and have all but lost many important advancements of the 19th and 20th centuries and gone back into erroneous pseudo-science. This is the sorry state of economics today.
A bold statement from a non-economist to be sure. Although my field is computer science, I have more than a passing interest in economics. Having consumed dozens of books and other content on the subject over a decade, my confidence was buoyed when a Harvard economics professor admitted that my grasp of the subject went far beyond the layman's. But I am not here to commit the logical fallacy of arguing from (non) authority. Let my arguments stand on their own merits. I look forward to their refutation.
So I am not an economist, nor do I desire to become one. Yes, I could become a "proper" economist and apply to some revered institution. But it is those institutions that are the problem I am writing about here. Economics as a science has regressed, and the professors are to blame. What good would it do to get their recognition, when they are in error?
If this sounds crazy, then good. The suggestion that the established academic consensus on an entire subject is largely mistaken is a wild one that should be taken in with wild skepticism. But this would hardly be the first time that the academic consensus was wrong, and thinkers and commentators on the fringe were proven right in the end. There are today, two main schools of thought in the subject: the Keynesian school and the Austrian school. The former dominates academia, government and the mainstream profession. The latter is a small minority who have been able to further the subject.
Indeed, the Austrian school, through proper understanding of the business cycle, malinvestments caused by cheap credit and the damage done by forgetting to consider both the seen and the unseen effects of government intervention, was able to predict the 2008 crisis, and is predicting the next crisis which has started to unfold now. The Keynesian school, championed by professional morons like Paul Krugman and Ben Bernanke, was blindsided in 2008 and actually think that the problems were solved and no repeat crisis is on the horizon. But track record aside, the Keynesian school can be shown to be wrong by logical praxeological (human action) analysis.
Obsessed with complex mathematical models that prove results that are not reproducible in the real world, the academic mainstream have been unable to condemn, and worse, have often championed economic ignorance and nonsense that had been settled by the science in the 19th and 20th centuries. It is no wonder then that today economic ignorance is rife and worsening. People obsess about income distribution and imagine wealth a fixed pie. People think that inflation comes from employment. They think that the minimum wage raises living standards. They think that tariffs are paid by foreigners or that they help domestic industry. Mercantilist views are widespread and Malthus' thesis is alive and well. Krugman himself shows off his ignorance when he writes that a catastrophic alien invasion would be a boon to the economy as do the central bankers and politicians who think that consumption is key and demand somehow drives everything.
And this ignorance, trickling down from the professors and policymakers has a real impact. We are witnessing an increase in barriers to trade, protectionism, nationalisation of industry as well as never-normalised interest rates.
Economics has been derided as the dismal science, but it is only in a dismal state. When truly understood, economics is not heartless. It isn't about money. It is about humans and how they behave. Unfortunately, the coming crisis will not be one of conviction on behalf of the professors. Capitalism looks likely to get the blame again, and we look likely to double-down on the terrible ideas of these clueless socialists. Maybe when that fails even worse, we will finally be ready to listen to the Austrians.
Harrogate, December 23rd 2018
We have seen incredible advancements in all the hard sciences. I can appreciate this mostly in my own field, computer science, with which I am most familiar. But there is one field where we have not advanced. Worse still, we have regressed and have all but lost many important advancements of the 19th and 20th centuries and gone back into erroneous pseudo-science. This is the sorry state of economics today.
A bold statement from a non-economist to be sure. Although my field is computer science, I have more than a passing interest in economics. Having consumed dozens of books and other content on the subject over a decade, my confidence was buoyed when a Harvard economics professor admitted that my grasp of the subject went far beyond the layman's. But I am not here to commit the logical fallacy of arguing from (non) authority. Let my arguments stand on their own merits. I look forward to their refutation.
So I am not an economist, nor do I desire to become one. Yes, I could become a "proper" economist and apply to some revered institution. But it is those institutions that are the problem I am writing about here. Economics as a science has regressed, and the professors are to blame. What good would it do to get their recognition, when they are in error?
If this sounds crazy, then good. The suggestion that the established academic consensus on an entire subject is largely mistaken is a wild one that should be taken in with wild skepticism. But this would hardly be the first time that the academic consensus was wrong, and thinkers and commentators on the fringe were proven right in the end. There are today, two main schools of thought in the subject: the Keynesian school and the Austrian school. The former dominates academia, government and the mainstream profession. The latter is a small minority who have been able to further the subject.
Indeed, the Austrian school, through proper understanding of the business cycle, malinvestments caused by cheap credit and the damage done by forgetting to consider both the seen and the unseen effects of government intervention, was able to predict the 2008 crisis, and is predicting the next crisis which has started to unfold now. The Keynesian school, championed by professional morons like Paul Krugman and Ben Bernanke, was blindsided in 2008 and actually think that the problems were solved and no repeat crisis is on the horizon. But track record aside, the Keynesian school can be shown to be wrong by logical praxeological (human action) analysis.
Obsessed with complex mathematical models that prove results that are not reproducible in the real world, the academic mainstream have been unable to condemn, and worse, have often championed economic ignorance and nonsense that had been settled by the science in the 19th and 20th centuries. It is no wonder then that today economic ignorance is rife and worsening. People obsess about income distribution and imagine wealth a fixed pie. People think that inflation comes from employment. They think that the minimum wage raises living standards. They think that tariffs are paid by foreigners or that they help domestic industry. Mercantilist views are widespread and Malthus' thesis is alive and well. Krugman himself shows off his ignorance when he writes that a catastrophic alien invasion would be a boon to the economy as do the central bankers and politicians who think that consumption is key and demand somehow drives everything.
And this ignorance, trickling down from the professors and policymakers has a real impact. We are witnessing an increase in barriers to trade, protectionism, nationalisation of industry as well as never-normalised interest rates.
Economics has been derided as the dismal science, but it is only in a dismal state. When truly understood, economics is not heartless. It isn't about money. It is about humans and how they behave. Unfortunately, the coming crisis will not be one of conviction on behalf of the professors. Capitalism looks likely to get the blame again, and we look likely to double-down on the terrible ideas of these clueless socialists. Maybe when that fails even worse, we will finally be ready to listen to the Austrians.
Harrogate, December 23rd 2018
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| Swinsty resevoir |
TLDR: Economics professors give economics a bad name
