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> At it's heart, economics just models what naturally happens as a result of how reality is constructed. You know, I used to think something along these lines
by inerte 2y ago
> At it's heart, economics just models what naturally happens as a result of how reality is constructed.
You know, I used to think something along these lines but reading `Debt: The First 5000 Years` really changed my mind. We're not min-maxer's homo economicus. And I know the last 30 years of economics are trying to inject more psychology into the field (thanks Daniel Kahneman) but when it applies to human interactions at its core economics is a math solution to imaginary problems. The macroeconomics field is cool tough.
- s1artibartfast 2y agoThere is an understanding that there is a difference between the model and reality, and the models have realms of applicability, and underlying assumptions. That doesnt mean the problems are imaginary, they are real, with real consequences. The economic question of how many people will starve if we impose a new tax on food is a real one. The attempts to model the situation and derive an answer are imperfect. That doesnt mean they cant be useful, or even provide accurate answers. There are domains where spherical cows are entirely appropriate.