Why Trump’s tariffs are nearly as unpopular with his voters as Obama’s trade policy was

July 29, 2018 11 comments

from Dean Baker

Donald Trump made his opposition to much of America’s international trade policy a central theme in his presidential campaign, and his position almost certainly played a major role in his victory in key industrial states like Michigan, Ohio, and Pennsylvania. But the public now seems largely opposed to his recent tariffs against our major trading partners.

It is possible to make sense of these seemingly contradictory facts.

First, most people are not policy wonks. They have day jobs and, when they get back from work, they often have family responsibilities, so getting the news means hearing a few tidbits on the television or radio, or possibly skimming an article in a newspaper or online.

This means that the vast majority of people only have the most general understanding of trade and trade policy. In the election of 2016, there was a widely held view that trade policy had hurt many people, which was why both Donald Trump and Hillary Clinton opposed the Trans-Pacific Partnership, the most important trade deal then on the table. (Trump pulled out of the dealshortly after his inauguration.)

People were not wrong to hold a negative view of trade policy: Over the prior four decades, it had put U.S. manufacturing workers in direct competition with their low-paid counterparts in the developing world by reducing tariffs and other barriers that had caused foreign-made products to cost more. The predicted and actual effect of this policy was the loss of millions of manufacturing jobs.  Read more…

Quotes critical of economics

July 28, 2018 Leave a comment

from Asad Zaman

This is an assorted collection of quotes I have found useful from time to time in different contexts. I am putting them all together for my own reference, as well as for the benefit of others who may find them similarly useful to make points.

JM Keynes Quotes (mostly from General Theory GT):

The composition of this book has been for the author a long struggle of escape, and so must the reading of it be for most readers if the author’s assault upon them is to be successful,— a struggle of escape from habitual modes of thought and expression. The ideas which are here expressed so laboriously are extremely simple and should be obvious. The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds. (GT)

It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam. (GT)

It is astonishing what foolish things one can temporarily believe if one thinks too long alone, particularly in economics (along with the other moral sciences), where it is often impossible to bring one’s ideas to a conclusive test either formal or experimental. (GT)

For if orthodox economics is at fault, the error is to be found not in the superstructure, which has been erected with great care for logical consistency, but in a lack of clearness and of generality in the premisses – (GT)

For professional economists, after Malthus, were apparently unmoved by the lack of correspondence between the results of their theory and the facts of observation;— a discrepancy which the ordinary man has not failed to observe, with the result of his growing unwillingness to accord to economists that measure of respect which he gives to other groups of scientists whose theoretical results are confirmed by observation when they are applied to the facts. (GT)  read more

Divine belief in Economics at the beginning of the 21st century

July 27, 2018 4 comments

from Emil Urhammer

Drinking the strength of life
from men doomed to die,
spitting the crimson blood
on all the lands of gods;
black becomes the sun
in summers to follow,
weather spells disaster –
Need you know more?

With this stanza, I begin my story of the divine belief in Economics at the beginning of the 21st century, when this faith was practised and reached the height of its glory. . . .

The disastrous climate changes that truly came into effect in the second half of the 21st century are mirrored here, and we are sarcastically reminded that extensive knowledge did not serve as sufficient motivation to take the actions necessary to avert subsequent disasters.

Thus many centuries later, it is not easy to give an in-depth explanation as to why countries and governments did so little to avert these self-inflicted disasters, whose nature was known with some certainty and whose arrival was doubted by few. However, there can be no doubt that the divine belief in Economics with its strong anchoring in central authorities and close alliance with society’s elite was of great importance to maintaining the status quo, thus preventing the necessary transitions. Based on this relationship, I find it relevant to direct my searchlight at the divine belief in Economics in the 21st century to highlight certain characteristics of this faith. Hopefully, such an investigation can improve our understanding of the tragic downfall of a civilisation.  read more

Pledging fealty to Trump: Europe pays the price for increasing inequality

July 26, 2018 6 comments

from Dean Baker

At the NATO summit earlier this month, Jens Stoltenberg, the secretary general of NATO, was forced to publicly praise Donald Trump’s leadership. Mr. Stoltenberg is almost certainly a very intelligent hardworking man. That is virtually a prerequisite for a person in his position. By contrast, Donald Trump is the most ignorant ill-prepared person ever to sit in the White House.

Nonetheless, when Stoltenberg noted the increases in military spending by NATO members, Trump asked him why the increases were happening. Stoltenberg meekly responded, “because of your leadership.” (Actually, the increases were part of a deal negotiated with President Obama in 2014.)

Trump obviously loves this game of forcing powerful people to sing his praises. Like Stoltenberg, most don’t seem to feel they have any choice.

But, there is an issue here that goes far beyond Donald Trump’s unpleasant personality. Tens of millions of people cast their votes for Trump in 2016 (although less than a majority and in fact fewer than his main opponent, Hillary Clinton).

This was in large part because they wanted someone in the White House who would insult people like Stoltenberg. They wanted someone who would be a thumb in the eye of the people they viewed as the elite, and Donald Trump certainly fits the bill.  Read more…

Where modern macroeconomics went wrong

July 25, 2018 8 comments

from Lars Syll

In issue 1-2 (2018) of Oxford Review of Economic Policy, the editors have invited some well-known contemporary mainstream macroeconomists (including e.g. Simon Wren-Lewis, Randall Wright, Olivier Blanchard, Ricardo Reis, Joseph Stiglitz) to give their views on how to rebuild macroeconomic theory for the future.

economist_cover_oh_fuck_september_2008Some of the contributions are interesting to read. Others — like Wren-Lewis and Blanchard — seem to think that we can basically just go on with our microfounded DSGE models and complement them with one or other structural econometric model (SEM). Two bads, however, do not add up to one good.

Joseph Stiglitz article on Where Modern Macroeconomics Went Wrong acknowledges that his approach “and that of DSGE models begins with the same starting point: the competitive equilibrium model of Arrow and Debreu.” That is, however, probably also the reason why Stiglitz’ suggestions for rebuilding macroeconomics don’t go far enough.

It’s strange that mainstream macroeconomists still stick to a general equilibrium paradigm more than forty years after the Sonnenschein-Mantel-Debreu theorem — SMD — devastatingly showed that it  is an absolute non-starter for building realist and relevant macroeconomics:  Read more…

Disappearing poverty

July 25, 2018 2 comments

from David Ruccio

In international human rights law, a “forced disappearance” occurs when a person is secretly abducted or imprisoned by a state or political organization (or by a third party with the authorization, support, or acquiescence of a state or political organization), followed by a refusal to acknowledge the person’s fate and whereabouts, with the intent of placing the victim outside the protection of the law.

The most infamous forced disappearances have occurred in Spain (during and after the Civil War), Chile (after the coup by General Pinochet in 1973), Argentina (during the so-called Dirty War from 1976 to 1983), and the United States (as part of the so-called War on Terror).

Now, Donald Trump’s Council of Economic Advisers (pdf) is attempting to carry out a forced disappearance of poverty.**

The aim of the Council’s report is to make the case for “expanding work requirements among non-disabled working-age adults in social welfare programs.”*** In order to do so, the authors of the report attempt to show that (1) there is a large pool of non-disabled  working-age adults who are currently beneficiaries of the three major non-cash welfare programs (Medicaid, food stamps or the Supplemental Nutrition Assistance Program, and housing assistance) who can and should be put to work, (2) independence or self-sufficiency is undermined by participation in government anti-poverty programs, and (3) government assistance to the poor has become outmoded because poverty itself has virtually disappeared in the United States.  Read more…

On global capitalism and the survival of democracy

from Maria Alejandra Madi

In the new millennium, the proliferation of financial assets, with  unstable economic growth, has given way to widespread precarious jobs, income gaps and weaker welfare programs. The same policies that have obliterated social services and kept labour cheap have supported the expansion of short-termism and new global business models in the context of deregulated capitalism.

Besides, the onset of the 21st century represents a new political age  overwhelmed by the violation of democratic ideals of political equality and social peace. Indeed,  democracy has been allowing for election to office but not to power (Madi, 2015). And, as a consequence, policy makers might give priority to their sponsors instead of the needs of citizens – decent work and income equality.

In truth, the current trends in  global capital accumulation and production have shaped a scenario where unemployment, job instability and fragile conditions of social protection increased (Stiglitz, 2011). First, labour-saving technologies have reduced the demand for many middle-class, blue-collar jobs. Second, globalization has created a global marketplace, confronting expensive unskilled workers with cheap unskilled workers overseas and favouring outsourcing practices. Third, social changes have also played a role in the labor market changes, such as the decline of unions. Four, political decisions are influenced by the top 1% who favor policies that increase income inequality.

All these trends do reveal issues of current power, politics and economics in a social context where democratic institutions are being threatened.    read more

Mainstream economics and neoliberalism — what is the difference?

July 23, 2018 12 comments

from Lars Syll

Oxford professor Simon Wren-Lewis had a post up some time ago commenting on traction gaining ‘attacks on mainstream economics’:

neoOne frequent accusation … often repeated by heterodox economists, is that mainstream economics and neoliberal ideas are inextricably linked. Of course economics is used to support neoliberalism. Yet I find mainstream economics full of ideas and analysis that permits a wide ranging and deep critique of these same positions. The idea that the two live and die together is just silly.

The same Wren-Lewis has also felt it necessary to defend mainstream economics against critique waged against it from Phil Mirowski:

Mirowski overestimates the extent to which neoliberal ideas have become ’embedded in economic theory’, and underestimates the power that economic theory and evidence can have over even those academic economists who might have a neoliberal disposition. If the tide of neoliberal thought is going to be turned back, economics is going to be important in making that happen.

Wren-Lewis admits that “Philip Mirowski is a historian who has written a great deal about both the history of economics as a discipline and about neoliberalism’ and that Mirowski ‘knows much more about the history of both subjects than I do.” Fair enough, but there are simple remedies for the lack of knowledge.  Read more…

The Invisible Hand

July 22, 2018 20 comments

from Asad Zaman

This post is a continuation of ET1%: Blindfolds Created by Economic Theory, We show how the Invisible Hand theory appears to be neutral but actually favors the top 1%.

As quoted and refuted in my earlier post on “Failures of the Invisible Hand“, Mankiw writes that: “The reason for excellent functioning of decentralized market economies is that all participants are motivated by self-interest. This self-interest works better than love and kindness in terms of promoting social welfare.”  

What a monstrous statement! How can any human being think such thoughts? This is what comes from cutting off human experience as a source of knowledge, removing hearts from bodies, and leaving only brains floating in vats as a the sole source of knowledge.

Our hearts — in their pure states –would revolt at the oxymoron of a society based on selfishness. However, contamination by the poisons of economic theory and positivism leads to the blindness to sources of human welfare displayed in the Mankiw quote. In earlier times, A Christmas Carol of Dickens was sufficient as a reminder the wealth is not a measure of welfare. However, modern times reflect modern mindsets, which convert greed and wealth to desirable virtues, as reflected in the Disney version of Uncle Scrooge. So it becomes necessary to argue on logical grounds, appealing to brains in vats, instead of appealing to the heart.   read more

Discussing the GDP production boundary in a serious way

July 21, 2018 14 comments

A well-known criticism of national income is thr\e ‘Ïf you marry your maid you will diminish national income‘ mrmr. Sigh. We should forget about this silly male fantasy and give women their due by replacing it by what really happened. Domestic workers did not marry their single masters. They left them, as they had better paying things to do. Or the income of their family rose, which enabled them to get an education or to care for their own kids. Unprotected labor by Vanessa May is a good book about the work and life of domestic servants in new York, 1870-1940. The influence of this on how we have to understand GDP is important. So, what happened?

Once upon a time, every middle class family and many other families had a maid living in. Read more…

What’s the use of economics?

July 21, 2018 10 comments

from Lars Syll

The simple question that was raised during a recent conference … was to what extent has – or should – the teaching of economics be modified in the light of the current economic crisis? The simple answer is that the economics profession is unlikely to change. Why would economists be willing to give up much of their human capital, painstakingly nurtured for over two centuries? For macroeconomists in particular, the reaction has been to suggest that modifications of existing models to take account of ‘frictions’ or ‘imperfections’ will be enough to account for the current evolution of the world economy. The idea is that once students have understood the basics, they can be introduced to these modifications.

However, other economists such as myself feel that we have finally reached the turning point in economics where we have to radically change the way we conceive of and model the economy. The crisis is an opportune occasion to carefully investigate new approaches … Rather than making steady progress towards explaining economic phenomena professional economists have been locked into a narrow vision of the economy. We constantly make more and more sophisticated models within that vision until, as Bob Solow put it, “the uninitiated peasant is left wondering what planet he or she is on” …

Every student in economics is faced with the model of the isolated optimising individual who makes his choices within the constraints imposed by the market … The student then moves on to macroeconomics and is told that the aggregate economy or market behaves just like the average individual she has just studied. She is not told that these general models in fact poorly reflect reality. For the macroeconomist, this is a boon since he can now analyse the aggregate allocations in an economy as though they were the result of the rational choices made by one individual. The student may find this even more difficult to swallow when she is aware that peoples’ preferences, choices and forecasts are often influenced by those of the other participants in the economy. Students take a long time to accept the idea that the economy’s choices can be assimilated to those of one individual.

Alan Kirman What’s the use of economics?

Read more…

Regression analysis — a case of wishful thinking

July 19, 2018 2 comments

from Lars Syll

The impossibility of proper specification is true generally in regression analyses across the social sciences, whether we are looking at the factors affecting occupational status, voting behavior, etc. The problem is that as implied by the conditions for regression analyses to yield accurate, unbiased estimates, you need to investigate a phenomenon that has underlying mathematical regularities – and, moreover, you need to know what they are. Neither seems true. I have no reason to believe that the way in which multiple factors affect earnings, student achievement, and GNP have some underlying mathematical regularity across individuals or countries. More likely, each individual or country has a different function, and one that changes over time. Even if there was some constancy, the processes are so complex that we have no idea of what the function looks like.

regressionResearchers recognize that they do not know the true function and seem to treat, usually implicitly, their results as a good-enough approximation. But there is no basis for the belief that the results of what is run in practice is anything close to the underlying phenomenon, even if there is an underlying phenomenon. This just seems to be wishful thinking. Most regression analysis research doesn’t even pay lip service to theoretical regularities. But you can’t just regress anything you want and expect the results to approximate reality. And even when researchers take somewhat seriously the need to have an underlying theoretical framework – as they have, at least to some extent, in the examples of studies of earnings, educational achievement, and GNP that I have used to illustrate my argument – they are so far from the conditions necessary for proper specification that one can have no confidence in the validity of the results.

Steven J. Klees 

Read more…

Radical paradigm shifts

July 19, 2018 117 comments

from Asad Zaman

The methodology and ideology of modern economics are built into the frameworks of educational methods, and absorbed by students without any explicit discussion. In particular, the logical positivist philosophy is a deadly poison which I ingested during my Ph.D. training at the Economics Dept in Stanford in the late 1970s. It took me years and years to undo these effects. Positivism uses clever arguments to make you deny what you feel in your bones to be true, and make you believe what your heart says must be false — for example our supposed knowledge of subjective probabilities of unknown events. The roots of the problem go back to the famous Cartesian argument that “I think therefore I am”. Although it is clever piece of logic, it has a deadly effect. I know that I am alive because I can feel the blood flowing in my veins, the tingling of my skin, and a thousand other bodily sensations. “I feel therefore I am”. Denying this experience as a valid source of knowledge reduces me to a brain floating in a vat, which is exactly what logical positivism entails. In fact, despite Descartes, it is impossible to REASON our way to certainty. We can only create an illusion of certainty. Descartes’ argument is deeply flawed, and illustrates the weakness of human reason. When we formulate the concept of “I”, isn’t existence automatically part of this? Did I not exist when I was a baby, and was unable to formulate these thoughts? Do I blink out of existence when I go to sleep? This and many other difficulties make this argument incoherent. Modern economics is much like this. It starts by making assumptions which are dramatically in conflict with everything we know about human behavior (and firm behavior) and applies mathematical reasoning to situations where it cannot be applied, quantifying the unquantifiable and coming to completely absurd and ridiculous conclusions. NONETHELESS, speaking from personal experience, the brainwashing is powerful and effective. It is a slow and painful process to undo. read more

Did developing countries really recover from the Global Crisis?

July 18, 2018 3 comments

from C. P. Chandrasekhar and Jayati Ghosh

We are nearing the tenth anniversary of the collapse of Lehman Brothers in the United States that sparked a Global Financial Crisis,affecting every economy in significant ways. That crisis generated extraordinary monetary policy responses in the advanced economies, with low interest rates and unprecedented expansion of liquidity, in an effort largely driven by central banks to keep their economies afloat. By contrast, expansionary fiscal policy was barely used after the first initial stimulus. In the event, even with these incredibly loose monetary policies, the advanced economies have generally spluttered along, with periodic hopes of recovery dashed by repeated slowdowns – even as asset market bubbles have emerged once again.

But the developing world was supposed to be different;its economies were supposedly more able to continue expanding because of the “catching up” propensities assumed by mainstream theorists. There was much talk of the “decoupling” of developing and advanced economies, with China and some other countries emerging as alternative growth poles – but this proved to be wrong.

It is certainly true that China, generally following more heterodox policies with substantial state direction of the economy, continued to show rapid (but decelerated) growth; and India also continued to grow reasonably fast, although much of that growth reflected increases in finance and public administration. However, overall the developing world turned out to be much more dependent upon growth in the advanced economies, and over the past decade, their economic expansion also slowed.

Figure 1: Major developing countries had lower growth in the decade after the crisis  Read more…

The main reason why almost all econometric models are wrong

July 17, 2018 23 comments

from Lars Syll

How come that econometrics and statistical regression analyses still have not taken us very far in discovering, understanding, or explaining causation in socio-economic contexts? That is the question yours truly has tried to answer in an article published in the latest issue of World Economic Association Commentaries:

The processes that generate socio-economic data in the real world cannot just be assumed to always be adequately captured by a probability measure. And, so, it cannot be maintained that it even should be mandatory to treat observations and data — whether cross-section, time series or panel data — as events generated by some probability model. The important activities of most economic agents do not usually include throwing dice or spinning roulette-wheels. Data generating processes — at least outside of nomological machines like dice and roulette-wheels — are not self-evidently best modelled with probability measures.

EGOBILD2017When economists and econometricians — often uncritically and without arguments — simply assume that one can apply probability distributions from statistical theory on their own area of research, they are really skating on thin ice. If you cannot show that data satisfies all the conditions of the probabilistic nomological machine, then the statistical inferences made in mainstream economics lack sound foundations.

Statistical — and econometric — patterns should never be seen as anything other than possible clues to follow. Behind observable data, there are real structures and mechanisms operating, things that are — if we really want to understand, explain and (possibly) predict things in the real world — more important to get hold of than to simply correlate and regress observable variables.

Statistics cannot establish the truth value of a fact. Never has. Never will.

Corporations and mainstream media trumpet the “horrors” of higher wages

July 17, 2018 18 comments

from Dean Baker

The media have treated us to an array of stories warning us of the terrible labor shortage facing the country. Some of the pieces have been general, such as this CNBC piece on the labor shortage “reaching a critical point,” or this Wall Street Journal article on wage gains “threatening profits.”

Others have been more industry-specific, such as The Washington Post’s highlighting of the trucker shortage that threatens the “prosperous economy.” Then there is this New York Times piece noting that nursing homes have trouble attracting nursing assistants at the $13.23 an hour average pay for the occupation.

It’s clear that many in the media are terrified by the prospect that as the labor market gets tighter, workers might get a larger share of the pie. Perhaps this should not be surprising when billionaires control major news outlets, but it does mean that economic reporting might be getting pretty far out of line with economic reality.

At the most basic level, if workers did see pay increases at the expense of profits, they would just be getting back some of what they have lost in this century. The after-tax profit share of national income rose by almost three full percentage points between 2000 and 2016. That would correspond to an average loss of almost $3,000 per worker per year.

But even this calculation understates the shift from wages from profits. According to new research by Gabriel Zucman, more than a third of the foreign profits of US corporations are actually profits made in US but shifted overseas to evade taxes.

Factor this profit shift into the calculation and the loss to workers is close to $4,000 per worker per year. And this is before factoring in the corporate tax cut passed last year.  Read more…

Hard and soft science — a flawed dichotomy

July 16, 2018 15 comments

from Lars Syll

The distinctions between hard and soft sciences are part of our culture … But the important distinction is really not between the hard and the soft sciences. Rather, it is between the hard and the easy sciences. Easy-to-do science is what those in physics, chemistry, geology, and some other fields do. Hard-to-do science is what the social scientists do and, in particular, it is what we educational researchers do. In my estimation, we have the hardest-to-do science of them all! We do our science under conditions that physical scientists find intolerable. We face particular problems and must deal with local conditions that limit generalizations and theory building-problems that are different from those faced by the easier-to-do sciences …

Context-MAtters_Blog_Chip_180321_093400Huge context effects cause scientists great trouble in trying to understand school life … A science that must always be sure the myriad particulars are well understood is harder to build than a science that can focus on the regularities of nature across contexts …

Doing science and implementing scientific findings are so difficult in education because humans in schools are embedded in complex and changing networks of social interaction. The participants in those networks have variable power to affect each other from day to day, and the ordinary events of life (a sick child, a messy divorce, a passionate love affair, migraine headaches, hot flashes, a birthday party, alcohol abuse, a new principal, a new child in the classroom, rain that keeps the children from a recess outside the school building) all affect doing science in school settings by limiting the generalizability of educational research findings. Compared to designing bridges and circuits or splitting either atoms or genes, the science to help change schools and classrooms is harder to do because context cannot be controlled.

David Berliner

Read more…

Shifting attention: two ideas for a genuine micro founded macro-economic master thesis

July 16, 2018 9 comments

from Merijn Knibbe

I’m trying to write a book about the relation (not) of neoclassical macro-economic concepts to the concepts of macro-economic statistics. Which leads one to interesting places one can’t explore. If there is anybody out there in search for an interesting idea for a master thesis or something light that, these might do:

  1. A qualitative and quantitative exploration of ‘hoboism’ in the 1930’s looking at it using the lens of ‘involuntary part time unemployment’
  2. An international and historical extension of existing estimates of domestic servants and how this relates to our estimates of GDP.

Read more…

The Secrets of Happiness

July 15, 2018 Leave a comment

from Asad Zaman

Introduction — I wrote this essay a while ago, and I am adding this preface here to explain more about WHY I wrote it:

Preface:

A central problem of our age is the turning of “means” into “ends”.  It is obvious that money, by itself, is not a source of pleasure –  it is a means to this end. Similarly, freedom is useful only if it is freedom to allow us to do something we want to do. Nobody would want the freedom to sell himself into slavery — which is effectively the only free choice offered to the poor in capitalism. Yet, today, due to a long, strange, and complex, historical process, freedom and wealth have become the goals of life, and the religion of most people on the planet. By religion, I mean that morality is based on these two goals — anything which creates wealth is desirable and hence moral, while anything which allows us greater freedom to act on our desires is also moral (this is the foundational principle of utilitarianism). In order to clear our minds of traps created by false paradigms, it is very useful to contemplate the opposites, as a mental exercise. As the dialectical method suggests, let us focus on the possibility that wealth and freedom are harmful to us. Wealth tempts us into the misconception that we can buy happiness with it, and this cheap path to short-term happiness — “The Coca Cola Theory of Happiness” — prevents us from learning and understanding the sources of long-term happiness, destroying the possibility of genuine happiness. Similarly, freedom tempts us into following paths of behavior which lead to short term pleasures at the cost of our long term happiness — we pursue strategies of instant gratification, failing to understand the need for sacrifice, struggle, and voluntary acceptance of suffering, in order to achieve higher goals. Not having wealth would be useful to enable us to learn to search for happiness in more productive directions. Instead of freedom, discipleship and slavery to an established tradition which teaches devotees to act in ways that lead to self developments and enlightenment, may create long run capabilities which are beyond the reach of our current imagination and vision.  read more

What are axiomatizations good for?

July 14, 2018 126 comments

from Lars Syll

Axiomatic decision theory was pioneered in the early 20th century by Ramsey (1926) and de Finetti (1931,1937), and achieved remarkable success in shaping economic theory … A remarkable amount of economic research is now centered around axiomatic models of decision …

UnknownWhat have these axiomatizations done for us lately? What have we gained from them? Are they leading to advances in economic analysis, or are they perhaps attracting some of the best minds in the field to deal with difficult problems that are of little import? Why is it the case that in other sciences, such as psychology, biology, and chemistry, such axiomatic work is so rarely found? Are we devoting too much time for axiomatic derivations at the expense of developing theories that fit the data?

This paper addresses these questions … Section 4 provides our response, namely that axiomatic derivations are powerful rhetorical devices …

I. Gilboa​, A. Postlewaite​, L. Samuelson, ​& D. Schmeidler

‘Powerful rhetorical devices’? What an impressive achievement indeed …

Some of us have for years been urging economists to pay attention to the ontological foundations of their assumptions and models. Sad to say, economists have not paid much attention — and so modern economics has become increasingly irrelevant to the understanding of the real world.  Read more…