Home > Uncategorized > ET1%: blindfolds created by economics

ET1%: blindfolds created by economics

from Asad Zaman

In my paper on “The Empirical Evidence Against Neoclassical Utility Theory: A Survey of the Literature”, I have argued that economic theories act as a blindfold, preventing economists from seeing basic facts about human behavior, obvious to all others. For instance, economists consider cooperation, generosity, integrity (commitments), and socially responsible behavior, as anomalies requiring explanation, while all others consider these as natural aspects of human behavior.

Far deeper insight into the blindfolds created by economic theory is obtained when we realize that these are not random mistakes, made due to defective reasoning or neglect of empirical evidence. If the shopkeeper systematically makes mistakes which always increase the total bill, we can conclude that the mistakes are purposeful. Similarly, strong and repeated commitment of exactly the same mistakes, flying in face of all empirical evidence, reveals the deep ideological commitments which create these systematic errors.  In particular, the goal of this note is to show that modern economics is not what it claims and pretends to be: an objective, factual and scientific description of the laws governing capitalist economies. Instead, it is actually a branch of moral philosophy, and provides a justification for the inequality and injustice built into the system, by “showing” that these are necessary for the functioning of the system, and the system itself is fair for all participants, and leads to the best possible outcomes.  read more

  1. originalsandwichman
    April 12, 2018 at 10:58 pm

    Yep. Should be called “plutonomics”

  2. originalsandwichman
    April 12, 2018 at 11:12 pm

    In your list of deceptions, you omit one that I would argue should be at the top: the leisure choice model of labor supply. There are three reasons it should be #1.

    First, wage labor is the essential interface between life and commodity exchange.

    Second, there already was a perfectly good theory of the hours of labor incumbent when the leisure choice model was adopted instead.

    Third, the leisure choice model mandated a regression to plutocratic assumptions that had been discredited 85 years earlier. The years 1872 – 1957 in economic thought about the hours of work VANISHED WITHOUT TRACE and no one seemed to notice or care.

  3. April 13, 2018 at 3:46 am

    I was not aware of this — please provide me with references to this model of labor which was displaced by the leisure choice model. But I have indicated that my list is incomplete. Scarcity is regarded as the foundation of modern economics so exposing this illusion does seem like a first priority. I have mentioned the Production function, where some aspects of labor will be discussed. But I would be happy to expand the list to include this labor-leisure choice, which is definitely wrong — this was already picked up by Keynes, and I have discussed some aspects of this at length in my lecture on: Seventy Years of Economists’ Failure to Understand the Labor Market: https://www.youtube.com/watch?v=1qk4S08bdJE

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