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There are a substantial minority of people, mainly on the political left in my personal experience, who characterise capitalists / economists as using theories
by frereubu 2y ago
There are a substantial minority of people, mainly on the political left in my personal experience, who characterise capitalists / economists as using theories where the market / consumers are perfectly efficient. To me it seems one of those phenomenons where people want to have an opinion on a complex subject, but to do that they need to simplify it to an extent that makes it a completely innacurate caricature, often based on information that's many decades out of date. It drives a friend of mine - who's an experienced economist that builds models of economies - absolutely mad when people blithely say "but of course you believe that people act rationally and markets are efficient".
- CuriouslyC 2y agoMacro-economic forecasting mostly works but the size of the error bars on the computations are directly proportional to the potential informativeness of the forecast. Micro-economics is a bunch of toy and niche models, where the accuracy of the model is generally inversely correlated with how broadly applicable it is. Economic theory is kind of bullshit, they're building predictive models of enormous complex systems and trying to ascribe meaning, the models can be "ok" but the meaning the economists give is personally biased hand waiving about 100% of the time.
- frereubu 2y agoI kind of feel like your second paragraph is helping prove my point. And in my experience the people who build these models are very aware of their limitations (even if some of them do then go on to make overly broad conclusions for publication).
- CuriouslyC 2y agoThe problem is that economists love to ascribe meaning and make confident statements about causality in order to promote personal ideology rather than let the models speak for themselves. These models predict behavior within a narrow range of conditions, but that doesn't tell you anything about the underlying systems. You can model any function over a restricted domain using polynomials, but that doesn't mean that polynomial function is the ground truth of the universe.
- FrustratedMonky 2y agoI've never once seen anybody on the left use this argument. On the contrary. It is a religious chant on the Right, that Free Markets are efficient, and The Free-er, the More Efficient, and will solve all of our problems. --> "All hail our god the free market, efficient in its repose, elegant in its demonstrations, arbiter of logic through the efficient drive of profits, holy in its dispensation of moral judgement, let those that are poor be scorned for the market has judged them unworthy of its riches".
- frereubu 2y agoI think you misread my comment. I'm saying that's how the left unfairly characterise capitalists / economists, which is particularly unfair in the case of economists.
- FrustratedMonky 2y agoYeah, I re-read it. Still missing it, are you saying the left un-fairly over-simplifies it. OR the Left portrays the right/economist as un-fairly over-simplifying?
- frereubu 2y agoI'm saying the left (not everyone by any means) unfairly oversimplifies the views of economists. Absolutely no-one who is taken even vaguely seriously in economics thinks that consumers are rational or that markets are 100% efficient.
- FrustratedMonky 2y agoGuess, I'm retorting, that is not a 'left' point of view. The 'right' also oversimplifies views of economics. I would argue, the 'right' is even more guilty of it, like promoting false economic concepts is their bread and butter, part of their platform. Though, I can agree, maybe it is, most people all around, only have a simplified view.