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Thanks for the positive words about my comment. I have a lot of respect for economists who are deeply engaged with empirical research. My own problem is prima
by jedharris 11y ago
Thanks for the positive words about my comment.
I have a lot of respect for economists who are deeply engaged with empirical research.
My own problem is primarily with hard core "free market" theorists who lack humility and have an outsized role in promoting economic mythology. Keen paints with too broad a brush, but the people he describes do exist and do have way too much influence.
Realistic ways of addressing most of the items on your list (infrastructure, education, healthcare, quality of life) are quite explicitly condemned by these theorists.
This economic mythology depends heavily on ideas about optimality that don't survive the problems with Arrow Debreu, the limitations of representative agents, etc.
The economic profession should be explicit about this. Every respectable economist should agree that (say) "We know free markets can't be generally relied on to produce good results. Government intervention is often required to avoid serious problems." That would help undermine the mythology.
The American Economic Association (and others) should make some kind of official statement along these lines, and should reiterate it whenever the assumption that "the market is better" comes up in policy discussions.
But for whatever reason mainstream economists typically want to avoid making explicit comments about the problems of "free markets".