Re: Debunking Economics

["John Gelles" <jjgelles@xxxxxxxx>]

            "So I hope [to see built] a more scientific economics."
                    -- Steve Keen, today on PKT

            And so we will have to debunk whatever is built.

            Imagine, if you will, economic models that could
            forecast from a short period of historical data, (in
            which everyone did the right thing, and poverty,
            pollution, and malignant disparity were gone), a
            future that continued so perfect an era.

            Such models would certainly not be grounded
            in "natural" behaviors that could be counted on
            to continue.  They would have to be based on
            cultrual norms, perhaps similar to those that
            prevail in Switzerland or Denmark.

            Such temporary legal impositions on the wild
            human animal do not lend themselves to science
            or social science. They ar matters of art, law and
            politics. To reduce them to science, we would have
            lobotomize all the voters.  Voting, itself, involves
            art, not science.

            Do students have to be convinced that neoclassical
            economics is mere rationalization?  What else can
            they believe when they see the great variety of
            money-making schemes that succeed all over the
            world and in every place -- all completely resistant
            to reliable prediction.

            What students need is alternative agendas offered
            by a variety of skilled political advocates whose
            advice is presented in concrete proposals. Such
            agendas might open their eyes to something
            different.

            As for instance:

            Plan A:  Invest some current income in a single
                            fund that mimics the performance of all
                            traded shares.

       Opponent:  If the fund performs below expectation you
                            will have to augment its rewards with
                            guaranteed performance adjustments.
                            If above expectation, leave it as is.

            Plan A:  Yes, we can do that.  After all, if it's below
                            expectation, prices must be low.  So
                            gov't can adjust rewards with fiat money
                            with no fear of hyper-inflation.


                Is the above economics?  Is it science, art or
                financial architecture?   I'd call it the last.

                    John Gelles