Friday, 21 July 2017

Quote of the Day: On the Ponzi scheme of contemporary economic theory


"Both the neoclassical synthesis and the neoliberal consensus ... condition economists to argue, without irony, in their roles as professors, private consultants, and high-ranking public employees, that they have special expertise in setting economic policy, but also that the most reasonable economic policy is no economic policy. Mainstream economists acknowledge their inability to predict the effects of economic policy in order to emphasise that when the economic policies they endorse have adverse economic consequences, nobody is to blame. But they still contend that in moments of economic crisis, only economists possess the special expertise to fix a failing economy. This is the Ponzi scheme of contemporary economics….

"One is tempted ... to wonder whether the 'Queen of the Social Sciences is a dry cellar, a cactus land, a paralysed force, a headpiece filled with straw. What part of the record of economics should persuade us economists aren’t altogether expendable? 'What are the roots that clutch, what branches grow, out of this stony rubbish?'"

~ Matt Seybold, from ‘The End of Economics’ in the LA Review of Books

[Hat tip Per Bylund, who adds his own very pertinent comment … ]
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