Can We Trust Economists?

Binyamin Appelbaum’s “The Economists’ Hour” and Janek Wasserman’s “The Marginal Revolutionaries” examine the impact of economic ideas on modern politics.

Comments: 58

  1. It always seems like modern economics is biased towards policies which increase inequality. The focus becomes on numerical measures of macro economic growth and these increase more quickly with policies that benefit corporations and wealthy investors, who in turn reap the most benefit from macro economic growth. It's too bad there's not a field like economics that instead is focused on improvement focused on something other than macro economic growth, like some kind of "macro social improvement" that put human well-being as the variable to improve, and not just a GDP figure.

  2. @Mobocracy Traditional economic theories do emphasize macro economic growth. in the process, these theories often overlook the negative impact at the ground level. How many individuals are adversely affected? How many will be forcibly displaced? How many will be left to fend for themselves in a downward spiral? Questions like these are better addressed by welfare economists. Look at some the work done by Nobel Prize winner Amartya Sen in regards income disparity, abuse of women, and role of government in the economic life of a society. maybe it is time to have a few welfare economists work in these jobs.

  3. @Mobocracy Economics utterly ignores the effects of inequality. Take the definition of "demand". If a millionaire is willing to pay $100 for something and a pauper can only afford $ 20, the millionaire is said to have more "demand" for the commodity, when actually $ 100 is a tiny fraction of his wealth. "Demand" thus means "what rich people want".

  4. There are such fields of economics that put human welfare first they’re called Heterodox Economics (see Steve Keen) and modern Marxist Economics (see John Bellamy Foster). You might also enjoy the erudite book by Canadian Law Professor Harry Glasbeek Capitalism A Crime Story.

  5. I've often thought that economists' theories and complicated equations are just vehicles to aggrandize themselves and their professions. So many theories reduce a complicated societal phenomenon to some component factors, make an equation out of it, and then perform calculations. Why? because the equation enables further tinkering. Professional renown follows. Then we get behavioral economics, which attempts to put the human factor back in, again earning the attention, further grants and maybe even tenure. What a racket! Would be relatively harmless if confined to academia. But letting it loose on the real world can have awful consequences. Anybody remember "shock therapy" prescribed by eminent economists following the dissolution of the former Soviet Union? So much hardship followed that foolishness. Not to mention a permanent aversion to democracy among the population.

  6. @Anne This review criticizes Schumpeter, Mises, Hayek, and Friedman, et al., for the tragic consequences of their deeply ideologically driven theories and contributes to the criticism of modern economic theory by Anne and @Mobocracy. At the same time, how could Keynes and modern Keynesians, like NYT's Paul Krugman, be left out of the book and this review? Their prescriptions have explicitly taken into account inequality as an important variable to be addressed. This review might answer some of their skepticisms and provide interesting food for thoguth about Keynes, et al.

  7. @Anne The IMF has often recommended "shock therapy" for developing countries when their economies and currencies were weakening. Often, these countries had loans demarcated in stable dollars or euros, and as these loans came due, their value in the native currency was exorbitant. To cover the loans, the local currency would be devalued, and the IMF would extend a small loan and recommend the government run a fiscal surplus; and, immediately reduce imports into the country. A tighter supply of the local currency would also be recommended by the IMF to cut inflation, unloosed by the cheaper currency. Now, contrast this with the actions of the US during the Great Recession. It increased its fiscal deficit and the money supply. Both actions acted as stimuli to a weakening economy. But, instead of a weakening dollar, since it was the most stable global currency, this strength continued to attract dollars into the US, as a safe haven, even though this recession was initiated by the US. The IMF recommended policies for developing countries and the US policies followed during the Great Recession are interesting; because, for the most part, they are opposites. Loose fiscal and monetary policies provide stimuli to an economy; consider Trump and the Fed's current feuding. Tight fiscal and monetary policies do the opposite. For people to endure a long bout of economic "shock therapy," some type of accurate cost/benefit analysis better justify it. [10/9 W 10:00a Greenville NC]

  8. @Anne Well said!

  9. No, we cannot. They have shown themselves to be untrustworthy.

  10. The long-term purpose of economics is to obfuscate short-term rent-seeking by those with financial or political power... How many times has Krugman told us one more just and equitable and moral initiative would cost us just $0.12 each per year, averaged out... And then - in the next paragraph or column - solemnly intoned that the US economy is destined to never grow by more than 2%/year, again...

  11. Economists are pseudo-scientists who are EPICALLY AWESOME at explaining why yesterday's events happened exactly like they knew they would. They create simplistic mathematical models with variables for "greed" and "fear", and then fail to predict anything accurately. Think about it - if they could, they'd be silent and rich, right? They are so desperate for validation that they invented a fake "Nobel" prize to bask in reflected glory. It's coming out any day now, and once again the press will treat it like a real Nobel Prize, failing at journalism for the umpteenth time since it was dreamed up in the 60's

  12. I've always thought that economics was just cover for political movements. Adam Smith's theory encouraged deregulation of business and glorification of greed. Karl Marx's theory encouraged revolutionaries ( I remember one revolutionary used the euphemism "organizing scientifically") Keynesian economics justified government activity and the welfare state. Supply-side economics turned out to be a hoax justifying cutting taxes on the rich. Sounds to me like these books should have covered more territory.

  13. As I said, when the book author’s article was published by THe New York Times, not all economists are the same. The book casts a big shadow while it should name all those economists who were fundamental in the design of our current system. Many economists, my self included have long preached the return to economic science because the data coming out of the model analysis doesn’t confirm the theory under which Mr. Friedman and Mr. Buchanan reformed modern economics. Mr. Friedman and Mr. Buchanan became gospel and whoever challenges their ideas, well spread by George Mason and Chicago Universities, is destine to a life of suffering even when data shows that for 50 years they have been wrong. Economists shouldn’t be preachers, our theories should evolve as does the world around us. Our economic models, forever wrong, should be under constant scrutiny. Models are not set in stone, they must be updated, reviewed, take in to consideration that assumptions are often wrong and carry biases. Models are like budgets both are only good if under unbiased constant audit. It is clear that the political pendulum swings left and right, but economists should work to reduce the amplitude of the swing by serving both sides equally at all times. The beauty is always at the center.

  14. Where would we be today as a country and a people if we had not been subjected to the inhumane and undemocratic ideas of Milton Friedman and the Chicago School of economics.

  15. It sounds like neither author has made any attempt to describe modern economics, especially the growth of behavioral economics, or the important works of Thomas Piketty, Daniel Kahneman, Angus Deacon, Paul Romer. Books have to stop somewhere, but Appelbaum’s seems to stop just in time to preserve his thesis.

  16. Robert Shiller should have first on the list of important behavioral economists. My bad.

  17. I have a PhD in economics and I agree quite a bit with Appelbaum. This is despite me not having read his book cover to cover. Milton Friedman was tiny, loud and annoying. Apart from his fierce defense of free markets, he jumped up and down screaming for school vouchers e.g. poor kids from the wrong side of the tracks getting school vouchers to go to fancy private schools. This is still an experiment that I'm not quite sure did what it was supposed to do and as always didn't necessarily address the non-economic aspects of it. Then there's Jim Heckman who insisted that if households could have access to credit, their kids would no longer be "credit constrained" getting to college and higher levels of education. Wait a minute, isn't there a whole generation of young people not credit constrained (sure borrow $100,000 now for college!) but now loaded with debt after graduation? This is also the same guy who believes that we the public should be investing in children's education and health until age 8. Because after that age, the marginal gains start to diminish. Catholic schools seem to believe in the cutoff age of 8 too. Both guys are Nobel Prize winners and from the University of Chicago. Last but not least and he didn't win a Nobel Prize fortunately, is Schumpeter and "creative destruction" and "small is beautiful". Austrian Economics and quite a bit of baloney. Just look at what's happening to start ups in Silicon Valley. Sigh.

  18. After having been put thru the 'grind' of the University of Chicago's Milton Friedman 'school' of economics back in the 70's, I cannot agree more with the book's premises.

  19. Economics is a discipline that studies a certain aspect of human behavior. It houses a variety of differing viewpoints. It hasn’t led to an improvement in human behavior. It hasn’t led to universal prosperity. No, I don’t place “trust” in economics (or most things). I do agree with H.L. Mencken, “Nobody ever lost money underestimating the American public”.

  20. I realized economists were absolutely useless in 2008 when every single one of them failed to predict the greatest economic depression in the history of the world. It’s not even that I take their opinions with a grain of salt, I ignore them all together.

  21. @Frederick Azeituna Why would they predict it, given that about 99 percent of economists are not in the business of making such predictions to begin with? Equating economics with macroeconomic forecasting is like equating medicine with rheumatology.

  22. "The analytical tools employed by mainstream economists steered them toward prioritizing efficiency over equality, market mechanisms over nonmarket ones and consumers over producers. Their methodology was itself a sort of ideology." It seems that these economists started with the idea that, to paraphrase Regan, government is the problem. From there, they made tools to show just that. These ideas get ingrained and now we suffer for their reliance on this faulty methodology. Maybe we need more electrical engineers.

  23. I find economists' obsession with never ending economic growth to be ridiculous, out of touch, and harmful. Many are so "stuck" on growth that in their reports, they refuse to or are unable to use the word "decline" when it is needed, and will instead use "negative growth". Scary how myopic these supposed geniuses are. I say just report the facts and numbers, let them speak for themselves and stop economists from forecasting or offering their predictions. If their forecasts were any good, why have there been endless booms and busts over the past 50 years? I won't be surprised if someone can prove that monkeys can make better forecasts than these guys.

  24. @Bear Has any economist ever forecast the total absence of booms and busts over a 50-year period? If not, then how does the existence of booms and busts invalidate their predictions?

  25. The Nobel Economics Prize should be eliminated, or awarded to those who’s ideas, and recommendations, based on practical evidence have proven correct. Right now, awards are given based on theories. Worse, among an army of meritocratic, “intellectual” - their intellect is always cosmic- is Milton Friedman whose Neoliberal ideas fueled deregulation, transfer of the manufacturing infrastructure base to Asia, crashed the economy in 2008 and destroyed the American middle class. The only winners have been Friedman’s fellow meritocrats, who used and are using the Jeffery Epstein handbook to rape the economy and abuse the American middle class, while gaming the system,

  26. @Ted Other winners include everyone who is no longer in danger of being drafted into the military in peacetime. (It has also led to a more professional and effective military.) And let's not forget the beneficiaries of the Earned Income Tax Credit, a variation on Friedman's proposed negative income tax.

  27. "Creating wealth" and "growing the economy" have become unthinking mantras for politicians of all stripes. They are based on the experience of the past in which resources were relatively large and populations relatively small. That is no longer true and we need a fundamentally different relationship with the environment (note that "economy" and ecology" have the same root.) The fact is that humans don't truly create anything -- all we do is take what is available in the environment and use and alter it for our purposes. Add to that the fact that continual growth in a finite environment is not possible. Today we have a huge and growing global population and a rapidly declining stock of natural resources. Economic theory needs to recognize this and develop a steady-state economy in which quality of life is maintained by reducing consumption and waste and re-using and recycling materials. That is the only sustainable path forward.

  28. Economics, like many social sciences, is a spectrum, and economists are found in all parts of that spectrum. Some espouse theories that sound reasonable, but do not work at all in the real world, but, for some reason I fail to understand, are held in equal regard with economists who have better explanations of the link between certain theories and data. So, the title is meant to grab, not reflect much of the real world. Still, I am slightly disappointed in the failure to mention the desire for one handed economists ("on one hand...")

  29. All economists, and everyone else for that matter, need to pay attention to Modern Monetary Theory (MMT). We need to reexamine our thinking about federal deficits and the "national debt." Warren Mosler points out that the Treasury/Fed sells bonds NOT to "borrow" money but rather to remove excess reserves from the banking system that threaten to drive the overnight lending rate down to zero. As a sovereign nation, the U.S. has the power to issue as much fiat currency as it wishes. The only relevant constraint is inflation. The curious conviction that the U.S. Treasury would ever need to solicit U.S. dollars from any entity other than itself is rather like believing that the sun, in order to keep shining, must from time to time borrow photons from another star.

  30. As a teaching economist v. one who designs macroeconomic policies for governments, I'm of the opinion that an economist's job is to illustrate what the issues are and the choices that policymakers have in addressing the problems. Ours is a job of presenting situations and attempting to explain them in a world where time and circumstance evolve so that what worked (or didn't) in the past isn't or won't be the same choice in the future. In my opinion, any economist that professes to direct policy is a politician, with an economic's degree. Economics is all about choices -- a continual balance between efficiency and equity -- and as an economist, ours is not to choose one over the other, but rather point out the different choices we have as a society, the (opportunity) costs of those choices, and to identify and (perhaps) quantify the externalities that result. Those that stray from these foundations are not true economists, but rather politicians (makers of the policy) and should be judged on that hat which they choose to wear. Economists, like judges, who become partisan do so at the risk of losing credibility and trust, not just for themselves, but the profession as a whole, and frankly, we need economists to help us understand the outcomes of our decisions in an ever-changing and complex world.

  31. It seems so fashionable to bash economists, but it would be very easy to throw the proverbial baby out with the proverbial bathwater. Economists have a problem, the problem is that they believe they know the answer, and usually that answer is the furthering of an ideology. If electrical engineers performed better at economic policy it is probably because they approached each situation without that ideological baggage. That shouldn't cause us to disregard the information economists have collected and the analysis they have performed. The economy is a changing thing, it is very hard to predict because because we haven't experienced all possible situations, and so we don't know all possible outcomes. Humans and societies are slippery things that almost thrive on being contrarian.

  32. " The economists will be back." It sounds like the book of Jaques Berger "Le Matin des Magiciens"... a little apocalyptical. We are like mechanics, economists fix an economy as mechanics fix a car. Neither the mechanic nor the economist made the car or the system: it was given to them; and they can only make marginal improvements. And yes, lawyers are like an English professor in this: they can not distinguish a ut from a screw in this business of economics.

  33. You need to mention that Friedman was helping a fascist dictator, Agusto Pinochet, in Chile. Not mentioning that is an irresponsible oversight, particularly if you want to talk about the ways in which economists have made bad decisions.

  34. "Can We Trust Economists?" No mention of the social disasters caused by Marxist economics.

  35. @Grace That's such an idealogue's argument, and a go-to answer that the right lunges for whenever there's criticism of free market religiosity. It isn't an either, or equation. This is book is about the rise of neoliberal economies, economists, and their failures- not a call to replace it with Marxism. If we can't understand where we are and how we got there, from a critical perspective we are truly lost. This isn't a football game.

  36. So where was/is Krugman?

  37. The problem isn’t economics, the problem is the fools with economic degrees that have no idea of what they speak. Kudlow is a prime example, that man has not made a correct statement in his life. Like the MBA a economics degree is a way for a fool to have a facade of credibility.

  38. It seems to me that one key economic concept that can be blamed for excessive wealth inequality and burgeoning national debt over the past 40 years is Supply Side Economics, known by the more familiar term "Trickle Down Economics", which became a staple of Republican orthodoxy with the Reagan administration and has remained a staple of Republican orthodoxy for the past 40 years. Over that time It has served as the rationale for lower tax rates on capital gains and higher incomes (to the point now where the richest enjoy the lowest income tax rates). It served most recently as the rationale underlying the massive cuts in corporate tax rates (which has failed to deliver the promised benefits of repatriating corporate capital and boosting investment as well as job creation.) This "theory" is still endorsed by the Republican party's pet economists, one of whom was recently awarded a Medal Of Freedom by President Trump. As far as I can tell the moniker that George H W Bush applied during the 1980 primary season, "Voodoo Economics" is a more appropriate term. The theory inverts the emprical data as it holds that the economy is driven by a relatively small number of wealthy investors rather than by masses of consumers with enough money to spend, a contention that has been disproven repeatedly, here and around the world. I can only assume that this was not raised due to a desire not to politicize the discussion - but how can it be ignored? It's the elephant in the room.

  39. JK.Galbraith once commented that the only purpose of economic forecasting was to make astrology look good.

  40. "The analytical tools employed by mainstream economists steered them toward prioritizing efficiency over equality, market mechanisms over nonmarket ones and consumers over producers." These all seem to be false contrasts. Consider what goes into assessing the most efficient car. You will have to account for "costs" and for "benefits" and then assess which car achieves maximizes the cost to benefit ratio. If by "benefit" all you mean is the quickest 0-60 mph acceleration, and by "cost" you mean "effort" then a gas-guzzling, smoke spewing, obnoxiously loud car may be the most "efficient" car. What this brings out is that, often, a large range of costs and benefits simply get left out of the equation. Those of us angling for equality might, for example, object that the car equation just mentioned fails to give "equal due consideration" to the costs of spewing smoke and noise and extracting and refining oil into gasoline, as well as equal due consideration to other factors for which there are costs and benefits, like ability to find parking spaces, neighborhood peace and quite, preserving native species habitats, and more. What is at issue, then, is not well-described as "efficiency vs. equality" but instead, efficient allocation of goods in such a way that gives equal respect and concern for the valid interests of all. And the success rate of economists in modeling, predicting, and achieving that goal seems rather dismal.

  41. "Can We Trust Economists?" The answer is an unequivocal "No". They have demonstrated, repeatedly and consistently, that they are untrustworthy, incompetent, and a menace to society, and it's time to stop acting as if they add any value whatsoever. The empirical data is abundant, and represents a scathing indictment of economics. There are a few exceptions among its members, of course, but the field itself is largely intellectually and morally bankrupt, and has inflicted great harm on humanity when policymakers implemented "theories" that are simply assumed true in those silly economics textbooks. Their most egregious offense was the neo-liberal economic and shareholder capitalism version of globalization that has been implemented for the past 25 years, the negative consequences of which fill the newspapers day after day, all of which was ultimately based on some ridiculously simplistic Ricardian theory of "comparative advantage". The resulting "negative externalities" are vastly larger in number than the economists expected, and we are only beginning to reckon with the consequences. The collapse of the developed world, the stunning rise of China, and the society-destabilizing levels of inequality in developed and developing countries alike have put humanity on a trajectory towards a cataclysmic outcome. And it was largely the result of economists being "useful idiots" for the elites. As a result, the survival of capitalism and democracy are now both in doubt.

  42. Keynesian economics is the most respectable school of economics, which says that consumer demand creates supply. Randian, Univ-of-Chicago-trained, 'free-market' sycophant economics is largely a road to unregulated ruin, especially when supplemented with its Frankenstein twin-brother 'supply-side' economics which is a demonstrated destructive fraud. Arthur Laffer, arguably the most destructive economist in American history, single-handedly providing the tax-cut strychnine to the Grand One Percenters who successfully used it to kill the middle class with since 1980. In more recent days, Laffer advised Kansas ex-Governor Sam Brownback to collapse tax rates and trickle-down on the non-rich; the state almost immediately went bankrupt. We should make a clear distinction from real academic economists and Robber Baron economists who peddle tax-cut snake oil for their billionaire employers and misanthropes. "The specific set of foolish ideas that has laid claim to the name 'supply side economics' is a crank doctrine that would have had little influence if it did not appeal to the prejudices of editors and wealthy men. — Paul Krugman "David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older, less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows." — John Kenneth Galbraith Economic frauds deserve public floggings.

  43. No. They serve their political masters and ideologies at everyone else’s expense. Quoting from the article: “Their methodology was itself a sort of ideology.” to which I would add: not even sort of, but exactly.

  44. I seem to remember that one of the foundational principles of economics was that people made rational economic decisions. Given the existence of a certain city called Las Vegas, it would seem that that principle was self-evidently not based on reality. Economics is quite simply not a science. It is merely more or less educated guesswork, often fundamentally disconnected from reality. Given where neo-liberalist economic policies have gotten us, with a world headed to an unprecedented global environmental crisis, with the so-called beacon of American democracy visibly crumbling before our eyes, it would seem like a very good time to start ignoring the economists and listen to the engineers and scientists. Think of it- what economist has ever been right even half the time? Yet we would fire an electrical engineer whose batting average was that poor.

  45. The article is conflating economists with political views. For instance, whether the proper goal for our economy is growth or stability are two different view points, each espoused by different economic camps. Republicans tend to emphasize growth and accept the volatility that deregulation can bring, while Democrats tend to emphasize safety and stability with the attending damper on growth than regulation entails. I think it is fine to hand over decision making to domain experts such as economists, but it is important that their views are aligned with what is best for the country. And therein lies the rub - what is best for the country is decided by which party holds the reins in Washington.

  46. Great review, I’ll read these books. However, it seems appropriate to say that it’s really human behavior that guides our future. Let’s hope we can learn that lesson.

  47. I trust Keynes, but not Kudlow (who is actually an ill trained performer from CNBC, NOT an economist. Might make a pretty good used car salesman, though.)

  48. If 'economics' and 'economist' were never spoken or read again, there would still be ongoing discussions by people concerned with appropriate uses and distribution of scarce resources locally, nationally, globally. Call it what you want. A rose by any other name. All ideas mentioned -- production, efficiency, inequality, aggregate and micro analyses, politics of economics, technical efficiencies, prediction vs analysis, interactions of 'economic' issues with psychological and sociological determinants and outcomes, relationships of the monetary sector with household, business, and public sectors -- all topics have been part of philosophical inquiry for hundreds of years under various umbrellas of epistemology, ethics, logic, business, statistics and science. Many such important discussions proceeded without ever using the word 'economics.' Most of Adam Smith's work was within the area he called 'moral philosophy.' Other writers used 'political economy' to describe their work, with no apologies for using a theoretical argument for a specific program of social reform. For those confused about the use of theory in 'economic' discussions, read Leo Rogin's "The Meaning and Validity of Economic Theory, an Historical Approach". Theory is not truth; it's simply a useful tool for simultaneously making two clear points: about the nature and causes of current problems and about logically related possible solutions. People have always disagreed about these things.

  49. No, they can't be trusted. Here are some reasons for this. (1) Many economists are simply using economic principles and research to create arguments to support political or policy objectives which they or their sponsors/employers favor rather than seeking truth and understanding. (20 It is often not easy to identify who are the seekers of truth and understanding and who are the policy advocates. (3) Predicting economic outcomes is infinitely complex, even the seekers of truth and understanding often get it wrong. Paul Krugman is a good example. Very bright guy, very accomplished technically, very articulate, but it often seems he is using his skills as an economist to justify his policy preferences rather than using them to determine what policy should be.

  50. We should blame economists ( at least partially ) for the presidency of Donald Trump. It's the economists who sang the Free Trade song for so long, while ignoring the devastation that was done to working class Americans due to the decline of American manufacturing. Economists ignored China's trade abuses for years. Meanwhile, manufacturing declined from 28% of GDP to 11% over the past 45 years. Those who pointed out the damage done by our bad trade deals were labeled as being hostile to free trade. Manufacturing made America an international power, which now belongs to the Chinese. Blame the economists.

  51. @Ralph The free trade mantra of economists was too narrowly focused, similar to most of their other mantras. NAFTA and CAFTA outlined opening of markets and lowering of duties and tariffs, but completely ignored one major economic sector (labor) and one major externality (the environment). I read an op-ed by Robert Reich (coincidentally, the secretary of Labor when NAFTA was being negotiated) a few years ago, and he asked a rhetorical question about free trade agreements. Knowing all the historical precedents of discord, decline and revolution that come about when there is extreme economic inequality and hardship and/or exploitation of workers, why wouldn't you build in stipulations to free trade agreements related to the labor sector? Surely any nation signing onto the agreement has some communal interest about the social stability of their own nation and their neighboring nations? Why not build in a stipulation that any signee must maintain a minimum wage that is at least, say, 25% of that nations median income. So to be fair, it wouldn't hold all nations to a high minimum wage of the wealthiest signee, but something that is equitable in their own economy. Similar stipulations could be built in about the environment. After all, we all breathe the same air and drink the same water.

  52. We can not trust economists. And the reason why is although they devise theories and produce studies, they err when it comes to the very foundation of what capitalism is and is not. To say that Adam Smith is the father of capitalism is a gross mistake, a monumental fallacy. Why? On just those words "the invisible hand", dropped twice in the Wealth Of Nations ( as a figure of speech), much has been speculated. In all truth, in his magnum opus The Theory Of Moral Sentiments Smith advocated for a society in which each and every individual is being helped to develop his/her natural talents and aptitudes in order for the individual to become productive, to contribute to society, to be happy. Against this Smith is adamant that the business people and wealth should forgo of their "little interests" and serve the wellbeing of the community. Now, if that does not sound like socialism I don't know what does. Moreover, take the Nordic Model; the means of production are in private hands, labor is well organized and the state works to balance the interest of all players so that the entire society benefits. That is what Smith indicated, didn't he? But the economists are not following this reasoning, which is also found in Keynesian economics and instead venture in Friedman's abnormal thoughts, all predicated on Ayn Ran's madness who captured the attention of unstable minds, and we saw what the "masters of the universe" did to our economy. Pathetic!

  53. @Nicholas Good succinct analysis. Everyone's analysis would probably be enhanced by returning to the pre-modern non-academic understanding that we have political economists (as opposed to rigidly stratified academic designations of economic scientists and political scientists). So, Adam Smith, a moral philosopher informed by his study of political economy begat Ricardo begat Keynes. To date, I'm not sure that any of the other dishonest miscreants have added anything other than confirmation that an ideologue can almost certainly find confirmation of their faith in anything they happen to see. Unfortunately these types are also most certain to dismiss us rubes as just too stupid to see the truth and wisdom of their divinity. Pathetic indeed. Here's looking at you Milton Friedman and Allen Greenspan and to a lesser degree, Laffer, David Stockman and countless others.

  54. "The concept [of marginal utility] was worked out independently in Austria, England and Switzerland in the early 1870s." actually earlier, in the 18th century. and st. petersburg should be added to the list of locations. ... "Can We Trust Economists?" it's all relative, as economists are fond of saying. can we trust politicians and generals? can we trust citizens and voters?

  55. As an economics graduate student in the late 60's, I was told that issues of inequality were moral and philosophical, not the appropriate subject of economic analysis, most of which was mathematical. In the real world of policy, it's clear that many of the issues we confront have to do with distribution of the benefits of economic growth, as well as how to sustain growth. As it turns out, inequality is central to the performance of the economy, missed by most economists but reflected in Appelbaum's writings. I look forward to the book!

  56. All I will say is "ceteris paribus".

  57. Economists are trained to see the market as the preferred decision maker, not democracy. So in the continued tension between capitalism (favoured by Republicans) and democracy (favoured by democrats), economists have brought us to extreme inequality which naturally leads to plutocracy. We have that. Capitalism doesn’t have regard for social welfare or the environment,which is why we have weak social supports and are fast headed for environmental collapse. Democratic constraints are imperative. Unlimited growth is like cancer. It will devour the planet. It takes good government to maintain a balance between democracy and capitalism. The more inequality, the worse the government. Scandinavian Countries have been better at keeping inequality lower. Graduated income and wealth taxes, strong social services, universal healthcare, free education, public support for media, powerful unions, robust infrastructure, are features we could learn from. Our current regime: constitutionally corrosive, anti-democratic, authoritarian, corrupt, favours unchained capitalism is an example which should make my point.

  58. I think what both these authors seem to be saying that economists tend to focus too much on narrowly focused theories and that perhaps they need more of a holistic approach. Of course there are some economists who are more than willing to let their theories be misrepresented by politicians as a fig leaf to disguise their true intentions in exchange for fame and accolades. A perfect example of this is Art Laffer's 'Laffer curve' theory of taxation. Defined precisely and as shown by a curve with a tax rate axis and revenue on the other axis, what it says is that at any point in time there is a tax rate that will maximize revenue. 1% higher and revenue drops. 1% lower and revenue also drops. Before this it had always been assumed that the higher the rate, the higher the revenue. Laffer allowed the GOP to interpret the theory as saying that tax revenue would *always* increase regardless of rate decrease no matter what the original rate was. In other words, the optimal rate is always lower than the current rate, whatever it is. This was bull, and likes of David Stockman and a whole host of other economists knew it. As for Laffer, he attained some fame, and recently a major accolade: Trump gave him the Presidential medal of freedom. Of course Trump also gave one to Ed Meese. It would seem that corruption and/or prostituting yourself are what freedom is all about these days.